divideand conquer 1. To gain or maintain power by generating tension among others, especially those less powerful,
so that they cannot unite in opposition.
Notable quotes:
"... In its most general form, identity politics involves (i) a claim that a particular group is not being treated fairly and (ii) a claim that members of that group should place political priority on the demand for fairer treatment. But "fairer" can mean lots of different things. I'm trying to think about this using contrasts between the set of terms in the post title. A lot of this is unoriginal, but I'm hoping I can say something new. ..."
"... The second problem is that neoliberals on right and left sometimes use identity as a shield to protect neoliberal policies. As one commentator has argued, "Without the bedrock of class politics, identity politics has become an agenda of inclusionary neoliberalism in which individuals can be accommodated but addressing structural inequalities cannot." What this means is that some neoliberals hold high the banner of inclusiveness on gender and race and thus claim to be progressive reformers, but they then turn a blind eye to systemic changes in politics and the economy. ..."
"... Critics argue that this is "neoliberal identity politics," and it gives its proponents the space to perpetuate the policies of deregulation, privatization, liberalization, and austerity. ..."
"... If we assume that identity politics is, first and foremost, a dirty and shrewd political strategy developed by the Clinton wing of the Democratic Party ("soft neoliberals") many things became much more clear. Along with Neo-McCarthyism it represents a mechanism to compensate for the loss of their primary voting block: trade union members, who in 2016 "en mass" defected to Trump. ..."
I've been thinking about the various versions of and critiques of identity politics that are around at the moment.
In its most
general form, identity politics involves (i) a claim that a particular group is not being treated fairly and (ii) a claim that
members of that group should place political priority on the demand for fairer treatment. But "fairer" can mean lots of different
things. I'm trying to think about this using contrasts between the set of terms in the post title. A lot of this is unoriginal,
but I'm hoping I can say something new.
You missed one important line of critique -- identity politics as a dirty political strategy of soft neoliberals.
To be sure, race, gender, culture, and other aspects of social life have always been important to politics. But neoliberalism's
radical individualism has increasingly raised two interlocking problems. First, when taken to an extreme, social fracturing into
identity groups can be used to divide people and prevent the creation of a shared civic identity. Self-government requires uniting
through our commonalities and aspiring to achieve a shared future.
When individuals fall back onto clans, tribes, and us-versus-them identities, the political community gets fragmented. It becomes
harder for people to see each other as part of that same shared future.
Demagogues [more correctly neoliberals -- likbez] rely on this fracturing to inflame racial, nationalist, and religious antagonism,
which only further fuels the divisions within society. Neoliberalism's war on "society," by pushing toward the privatization and
marketization of everything, thus indirectly facilitates a retreat into tribalism that further undermines the preconditions for
a free and democratic society.
The second problem is that neoliberals on right and left sometimes use identity as a shield to protect neoliberal policies.
As one commentator has argued, "Without the bedrock of class politics, identity politics has become an agenda of inclusionary
neoliberalism in which individuals can be accommodated but addressing structural inequalities cannot." What this means is that
some neoliberals hold high the banner of inclusiveness on gender and race and thus claim to be progressive reformers, but they
then turn a blind eye to systemic changes in politics and the economy.
Critics argue that this is "neoliberal identity politics," and it gives its proponents the space to perpetuate the policies
of deregulation, privatization, liberalization, and austerity.
Of course, the result is to leave in place political and economic structures that harm the very groups that inclusionary neoliberals
claim to support. The foreign policy adventures of the neoconservatives and liberal internationalists haven't fared much better
than economic policy or cultural politics. The U.S. and its coalition partners have been bogged down in the war in Afghanistan
for 18 years and counting. Neither Afghanistan nor Iraq is a liberal democracy, nor did the attempt to establish democracy in
Iraq lead to a domino effect that swept the Middle East and reformed its governments for the better. Instead, power in Iraq has
shifted from American occupiers to sectarian militias, to the Iraqi government, to Islamic State terrorists, and back to the Iraqi
government -- and more than 100,000 Iraqis are dead.
Or take the liberal internationalist 2011 intervention in Libya. The result was not a peaceful transition to stable democracy
but instead civil war and instability, with thousands dead as the country splintered and portions were overrun by terrorist groups.
On the grounds of democracy promotion, it is hard to say these interventions were a success. And for those motivated to expand
human rights around the world, it is hard to justify these wars as humanitarian victories -- on the civilian death count alone.
Indeed, the central anchoring assumptions of the American foreign policy establishment have been proven wrong. Foreign policymakers
largely assumed that all good things would go together -- democracy, markets, and human rights -- and so they thought opening
China to trade would inexorably lead to it becoming a liberal democracy. They were wrong. They thought Russia would become liberal
through swift democratization and privatization. They were wrong.
They thought globalization was inevitable and that ever-expanding trade liberalization was desirable even if the political
system never corrected for trade's winners and losers. They were wrong. These aren't minor mistakes. And to be clear, Donald Trump
had nothing to do with them. All of these failures were evident prior to the 2016 election.
If we assume that identity politics is, first and foremost, a dirty and shrewd political strategy developed by the Clinton wing
of the Democratic Party ("soft neoliberals") many things became much more clear. Along with Neo-McCarthyism it represents a mechanism to compensate for the loss of their primary voting block: trade union members,
who in 2016 "en mass" defected to Trump.
Initially Clinton calculation was that trade union voters has nowhere to go anyways, and it was correct for first decade or so
of his betrayal. But gradually trade union members and lower middle class started to leave Dems in droves (Demexit, compare with
Brexit) and that where identity politics was invented to compensate for this loss.
So in addition to issues that you mention we also need to view the role of identity politics as the political strategy of the
"soft neoliberals " directed at discrediting and the suppression of nationalism.
The resurgence of nationalism is the inevitable byproduct of the dominance of neoliberalism, resurgence which I think is capable
to bury neoliberalism as it lost popular support (which now is limited to financial oligarchy and high income professional groups,
such as we can find in corporate and military brass, (shrinking) IT sector, upper strata of academy, upper strata of medical professionals,
etc)
That means that the structure of the current system isn't just flawed which imply that most problems are relatively minor and
can be fixed by making some tweaks. It is unfixable, because the "Identity wars" reflect a deep moral contradictions within neoliberal
ideology. And they can't be solved within this framework.
From comments: "
neoliberalism to be a techno-economic order of control, requiring a state apparatus to enforce
wholly artificial directives. Also, the work of recent critics of data markets such as Shoshana
Zuboff has shown capitalism to be evolving into a totalitarian system of control through
cybernetic data aggregation."
"... By rolling back the state, neoliberalism was supposed to have allowed autonomy and
creativity to flourish. Instead, it has delivered a semi-privatised authoritarianism more
oppressive than the system it replaced. ..."
"... Workers find themselves enmeshed in a Kafkaesque bureaucracy , centrally controlled and
micromanaged. Organisations that depend on a cooperative ethic – such as schools and
hospitals – are stripped down, hectored and forced to conform to suffocating diktats. The
introduction of private capital into public services – that would herald a glorious new age
of choice and openness – is brutally enforced. The doctrine promises diversity and freedom
but demands conformity and silence. ..."
"... Their problem is that neoliberal theology, as well as seeking to roll back the state,
insists that collective bargaining and other forms of worker power be eliminated (in the name of
freedom, of course). So the marketisation and semi-privatisation of public services became not so
much a means of pursuing efficiency as an instrument of control. ..."
"... Public-service workers are now subjected to a panoptical regime of monitoring and
assessment, using the benchmarks von Mises rightly warned were inapplicable and absurd. The
bureaucratic quantification of public administration goes far beyond an attempt at discerning
efficacy. It has become an end in itself. ..."
Notable quotes:
"... By rolling back the state, neoliberalism was supposed to have allowed autonomy and creativity to flourish. Instead, it has delivered a semi-privatised authoritarianism more oppressive than the system it replaced. ..."
"... Workers find themselves enmeshed in a Kafkaesque bureaucracy , centrally controlled and micromanaged. Organisations that depend on a cooperative ethic – such as schools and hospitals – are stripped down, hectored and forced to conform to suffocating diktats. The introduction of private capital into public services – that would herald a glorious new age of choice and openness – is brutally enforced. The doctrine promises diversity and freedom but demands conformity and silence. ..."
"... Their problem is that neoliberal theology, as well as seeking to roll back the state, insists that collective bargaining and other forms of worker power be eliminated (in the name of freedom, of course). So the marketisation and semi-privatisation of public services became not so much a means of pursuing efficiency as an instrument of control. ..."
"... Public-service workers are now subjected to a panoptical regime of monitoring and assessment, using the benchmarks von Mises rightly warned were inapplicable and absurd. The bureaucratic quantification of public administration goes far beyond an attempt at discerning efficacy. It has become an end in itself. ..."
"... The other point to be made is that the return of fundamentalist nationalism is arguably a radicalized form of neoliberalism. ..."
"... Therefore, neoliberal hegemony can only be perpetuated with authoritarian, nationalist ideologies and an order of market feudalism. In other words, neoliberalism's authoritarian orientations, previously effaced beneath discourses of egalitarian free-enterprise, become overt. ..."
"... The market is no longer an enabler of private enterprise, but something more like a medieval religion, conferring ultimate authority on a demagogue. Individual entrepreneurs collectivise into a 'people' serving a market which has become synonymous with nationhood. ..."
Thousands of people march through London to protest against underfunding and privatisation
of the NHS. Photograph: Wiktor Szymanowicz/Barcroft Images M y life was saved last year by the
Churchill Hospital in Oxford, through a skilful procedure
to remove a cancer from my body . Now I will need another operation, to remove my jaw from
the floor. I've just learned what was happening at the hospital while I was being treated. On
the surface, it ran smoothly. Underneath, unknown to me, was fury and tumult. Many of the staff
had objected to a decision by the National Health Service
to privatise the hospital's cancer scanning . They complained that the scanners the private
company was offering were less sensitive than the hospital's own machines. Privatisation, they
said, would put patients at risk. In response,
as the Guardian revealed last week , NHS England threatened to sue the hospital for libel
if its staff continued to criticise the decision.
The dominant system of political thought in this country, which produced both the creeping
privatisation of public health services and this astonishing attempt to stifle free speech,
promised to save us from dehumanising bureaucracy. By rolling back the state, neoliberalism
was supposed to have allowed autonomy and creativity to flourish. Instead, it has delivered a
semi-privatised authoritarianism more oppressive than the system it replaced.
Workers find themselves enmeshed in a
Kafkaesque bureaucracy , centrally controlled and micromanaged. Organisations that depend
on a cooperative ethic – such as schools and hospitals – are stripped down,
hectored and forced to conform to suffocating diktats. The introduction of private capital into
public services – that would herald a glorious new age of choice and openness – is
brutally enforced. The doctrine promises diversity and freedom but demands conformity and
silence.
Much of the theory behind these transformations arises from the work of Ludwig von Mises. In
his book Bureaucracy , published in 1944, he
argued that there could be no accommodation between capitalism and socialism. The creation of
the National Health Service in the UK, the New Deal in the US and other experiments in social
democracy would lead inexorably to the bureaucratic totalitarianism of the Soviet Union and
Nazi Germany.
He recognised that some state bureaucracy was inevitable; there were certain functions that
could not be discharged without it. But unless the role of the state is minimised –
confined to defence, security, taxation, customs and not much else – workers would be
reduced to cogs "in a vast bureaucratic machine", deprived of initiative and free will.
By contrast, those who labour within an "unhampered capitalist system" are "free men", whose
liberty is guaranteed by "an economic democracy in which every penny gives a right to vote". He
forgot to add that some people, in his capitalist utopia, have more votes than others. And
those votes become a source of power.
His ideas, alongside the writings of
Friedrich Hayek , Milton Friedman and other neoliberal thinkers, have been applied in this
country by Margaret Thatcher, David Cameron, Theresa May and, to an alarming extent, Tony
Blair. All of those have attempted to privatise or marketise public services in the name of
freedom and efficiency, but they keep hitting the same snag: democracy. People want essential
services to remain public, and they are right to do so.
If you hand public services to private companies, either you create a private monopoly,
which can use its dominance to extract wealth and shape the system to serve its own needs
– or you introduce competition, creating an incoherent, fragmented service characterised
by the institutional failure you can see every day on our railways. We're not idiots, even if
we are treated as such. We know what the profit motive does to public services.
So successive governments decided that if they could not privatise our core services
outright, they would subject them to "market discipline". Von Mises repeatedly warned against
this approach. "No reform could transform a public office into a sort of private enterprise,"
he cautioned. The value of public administration "cannot be expressed in terms of money".
"Government efficiency and industrial efficiency are entirely different things."
"Intellectual work cannot be measured and valued by mechanical devices." "You cannot
'measure' a doctor according to the time he employs in examining one case." They ignored his
warnings.
Their problem is that neoliberal theology, as well as seeking to roll back the state,
insists that collective bargaining and other forms of worker power be eliminated (in the name
of freedom, of course). So the marketisation and semi-privatisation of public services became
not so much a means of pursuing efficiency as an instrument of control.
Public-service workers are now subjected to a panoptical regime of monitoring and
assessment, using the benchmarks von Mises rightly warned were inapplicable and absurd. The
bureaucratic quantification of public administration goes far beyond an attempt at discerning
efficacy. It has become an end in itself.
Its perversities afflict all public services. Schools teach to the test , depriving
children of a rounded and useful education. Hospitals manipulate waiting times, shuffling
patients from one list to another. Police forces ignore some crimes, reclassify others, and
persuade suspects to admit to extra offences to improve their statistics . Universities urge their
researchers to
write quick and superficial papers , instead of deep monographs, to maximise their scores
under the research excellence framework.
As a result, public services become highly inefficient for an obvious reason: the
destruction of staff morale. Skilled people, including surgeons whose training costs hundreds
of thousands of pounds, resign or retire early because of the stress and misery the system
causes. The leakage of talent is a far greater waste than any inefficiencies this quantomania
claims to address.
New extremes in the surveillance and control of workers are not, of course, confined to the
public sector. Amazon has patented
a wristband that can track workers' movements and detect the slightest deviation from
protocol. Technologies are used to monitor peoples' keystrokes, language, moods and tone of
voice. Some companies have begun to experiment with the
micro-chipping of their staff . As the philosopher Byung-Chul
Han points out , neoliberal work practices, epitomised by the gig economy, that
reclassifies workers as independent contractors, internalise exploitation. "Everyone is a
self-exploiting worker in their own enterprise."
The freedom we were promised turns out to be
freedom for capital , gained at the expense of human liberty. The system neoliberalism has
created is a bureaucracy that tends towards absolutism, produced in the public services by
managers mimicking corporate executives, imposing inappropriate and self-defeating efficiency
measures, and in the private sector by subjection to faceless technologies that can brook no
argument or complaint.
Attempts to resist are met by ever more extreme methods, such as the threatened lawsuit at
the Churchill Hospital. Such instruments of control crush autonomy and creativity. It is true
that the Soviet bureaucracy von Mises rightly denounced reduced its workers to subjugated
drones. But the system his disciples have created is heading the same way.
The other point to be made is that the return of fundamentalist nationalism is arguably a
radicalized form of neoliberalism. If 'free markets' of enterprising individuals have
been tested to destruction, then capitalism is unable to articulate an ideology with which to
legitimise itself.
Therefore, neoliberal hegemony can only be perpetuated with authoritarian, nationalist
ideologies and an order of market feudalism. In other words, neoliberalism's authoritarian
orientations, previously effaced beneath discourses of egalitarian free-enterprise, become
overt.
The market is no longer an enabler of private enterprise, but something more like a
medieval religion, conferring ultimate authority on a demagogue. Individual entrepreneurs
collectivise into a 'people' serving a market which has become synonymous with
nationhood.
A corporate state emerges, free of the regulatory fetters of democracy. The final
restriction on the market - democracy itself - is removed. There then is no separate market
and state, just a totalitarian market state.
This is the best piece of writing on neoliberalism I have ever seen. Look, 'what is in
general good and probably most importantly what is in the future good'. Why are we
collectively not viewing everything that way? Surely those thoughts should drive us all?
Pinkie123: So good to read your understandings of neoliberalism. The political project is the
imposition of the all seeing all knowing 'market' on all aspects of human life. This version
of the market is an 'information processor'. Speaking of the different idea of the
laissez-faire version of market/non market areas and the function of the night watchman state
are you aware there are different neoliberalisms? The EU for example runs on the version
called 'ordoliberalism'. I understand that this still sees some areas of society as separate
from 'the market'?
ADamnSmith: Philip Mirowski has discussed this 'under the radar' aspect of neoliberalism. How
to impose 'the market' on human affairs - best not to be to explicit about what you are
doing. Only recently has some knowledge about the actual neoliberal project been appearing.
Most people think of neoliberalism as 'making the rich richer' - just a ramped up version of
capitalism. That's how the left has thought of it and they have been ineffective in stopping
its implementation.
Finally. A writer who can talk about neoliberalism as NOT being a retro version of classical
laissez faire liberalism. It is about imposing "The Market" as the sole arbiter of Truth on
us all.
Only the 'Market' knows what is true in life - no need for 'democracy' or 'education'.
Neoliberals believe - unlike classical liberals with their view of people as rational
individuals acting in their own self-interest - people are inherently 'unreliable', stupid.
Only entrepreneurs - those close to the market - can know 'the truth' about anything. To
succeed we all need to take our cues in life from what the market tells us. Neoliberalism is
not about a 'small state'. The state is repurposed to impose the 'all knowing' market on
everyone and everything. That is neoliberalism's political project. It is ultimately not
about 'economics'.
The left have been entirely wrong to believe that neoliberalism is a mobilisation of
anarchic, 'free' markets. It never was so. Only a few more acute thinkers on the left
(Jacques Ranciere, Foucault, Deleuze and, more recently, Mark Fisher, Wendy Brown, Will
Davies and David Graeber) have understood neoliberalism to be a techno-economic order of
control, requiring a state apparatus to enforce wholly artificial directives. Also, the work
of recent critics of data markets such as Shoshana Zuboff has shown capitalism to be evolving
into a totalitarian system of control through cybernetic data aggregation.
Only in theory is neoliberalism a form of laissez-faire. Neoliberalism is not a case of the
state saying, as it were: 'OK everyone, we'll impose some very broad legal parameters, so
we'll make sure the police will turn up if someone breaks into your house; but otherwise
we'll hang back and let you do what you want'. Hayek is perfectly clear that a strong state
is required to force people to act according to market logic. If left to their own devices,
they might collectivise, think up dangerous utopian ideologies, and the next thing you know
there would be socialism. This the paradox of neoliberalism as an intellectual critique of
government: a socialist state can only be prohibited with an equally strong state. That is,
neoliberals are not opposed to a state as such, but to a specifically centrally-planned state
based on principles of social justice - a state which, to Hayek's mind, could only end in t
totalitarianism. Because concepts of social justice are expressed in language, neoliberals
are suspicious of linguistic concepts, regarding them as politically dangerous. Their
preference has always been for numbers. Hence, market bureaucracy aims for the quantification
of all values - translating the entirety of social reality into metrics, data, objectively
measurable price signals. Numbers are safe. The laws of numbers never change. Numbers do not
lead to revolutions. Hence, all the audit, performance review and tick-boxing that has been
enforced into public institutions serves to render them forever subservient to numerical
(market) logic. However, because social institutions are not measurable, attempts to make
them so become increasingly mystical and absurd. Administrators manage data that has no
relation to reality. Quantitatively unmeasurable things - like happiness or success - are
measured, with absurd results.
It should be understood (and I speak above all as a critic of neoliberalism) that
neoliberal ideology is not merely a system of class power, but an entire metaphysic, a way of
understanding the world that has an emotional hold over people. For any ideology to
universalize itself, it must be based on some very powerful ideas. Hayek and Von Mises were
Jewish fugitives of Nazism, living through the worst horrors of twentieth-century
totalitarianism. There are passages of Hayek's that describe a world operating according to
the rules of a benign abstract system that make it sound rather lovely. To understand
neoliberalism, we must see that it has an appeal.
However, there is no perfect order of price signals. People do not simply act according to
economic self-interest. Therefore, neoliberalism is a utopian political project like any
other, requiring the brute power of the state to enforce ideological tenets. With tragic
irony, the neoliberal order eventually becomes not dissimilar to the totalitarian regimes
that Hayek railed against.
Nationalised rail in the UK was under-funded and 'set up to fail' in its latter phase to make
privatisation seem like an attractive prospect. I have travelled by train under both
nationalisation and privatisation and the latter has been an unmitigated disaster in my
experience. Under privatisation, public services are run for the benefit of shareholders and
CEO's, rather than customers and citizens and under the opaque shroud of undemocratic
'commercial confidentiality'.
What has been very noticeable about the development of bureaucracy in the public and private
spheres over the last 40 years (since Thatcher govt of 79) has been the way systems are
designed now to place responsibility and culpability on the workers delivering the services -
Teachers, Nurses, social workers, etc. While those making the policies, passing the laws,
overseeing the regulations- viz. the people 'at the top', now no longer take the rap when
something goes wrong- they may be the Captain of their particular ship, but the
responsibility now rests with the man sweeping the decks. Instead they are covered by tying
up in knots those teachers etc. having to fill in endless check lists and reports, which have
as much use as clicking 'yes' one has understood those long legal terms provided by software
companies.... yet are legally binding. So how the hell do we get out of this mess? By us as
individuals uniting through unions or whatever and saying NO. No to your dumb educational
directives, No to your cruel welfare policies, No to your stupid NHS mismanagement.... there
would be a lot of No's but eventually we could say collectively 'Yes I did the right thing'.
'The left wing dialogue about neoliberalism used to be that it was the Wild West and that
anything goes. Now apparently it's a machine of mass control.'
It is the Wild West and anything goes for the corporate entities, and a machine of control
of the masses. Hence the wish of neoliberals to remove legislation that protects workers and
consumers.
It can be argued that the state of US infrastructure - declining for literally decades -
is a sign of that.
The United States hasn't seen a major infrastructure package since the Eisenhower
administration. As a result, much of US infrastructure, from highways to waste treatment
facilities and energy grids, has approached the end of its useful life and is in desperate
need of upgrading.
Maintenance already accounts for over 60% of national infrastructure spending, and
total public spending on infrastructure maintenance and operations rose by $23.2 billion
between 2007 and 2017.
This
site regularly discusses the rise of neoliberalism and its consequences, such as rising
inequality and lower labor bargaining rights. But it's also important to understand that these
changes were not organic but were the result of a well-financed campaign to change the values
of judges and society at large to be more business-friendly. But the sacrifice of fair dealing
as a bedrock business and social principle has had large costs.
We've pointed out how lower trust has increased contracting costs: things that use to be
done on a handshake or a simple letter agreement are now elaborately papered up. The fact that
job candidates will now engage in ghosting, simply stopping to communicate with a recruiter
rather than giving a ritually minimalistic sign off, is a testament to how impersonal hiring is
now perceived to be, as well as often-abused workers engaging in some power tit for tat when
they can.
But on a higher level, the idea of fair play was about self-regulation of conduct. Most
people want to see themselves as morally upright, even if some have to go through awfully
complicated rationalizations to believe that. But when most individuals lived in fairly stable
social and business communities, they had reason to be concerned that bad conduct might catch
up with them. It even happens to a small degree now.
Greg Lippmann, patient zero of toxic CDOs at Deutsche Bank, was unable to get his kids into
fancy Manhattan private schools because his reputation preceded him. But the case examples for
decades have gone overwhelmingly the other way. My belief is that a watershed event was the
ability of Wall Street renegade, and later convicted felon Mike Milken, to rehabilitate himself
spoke volumes as to the new normal of money trumping propriety.
Another aspect of the decline in the importance of fair dealing is the notion of the
obligations of power, that individuals in a position of authority have a duty to
The abandonment of lofty-sounding principles like being fair has other costs. We've
written about the concept of obliquity, how in complex systems, it's not possible to chart a
simple path though them because it's impossible to understand it well enough to begin to do so.
John Kay, who
has made a study of the issue and eventually wrote a book about it , pointed out as an
illustration that studies of similarly-sized companies in the same industry showed that ones
that adopted nobler objectives did better in financial terms than ones that focused on
maximizing shareholder value.
Our Brexit regulars wound up talking about these issues as part of a UK election post
mortem. Hoisted from e-mail. First from David:
Around the time of the cold dawn of Friday 13 December, I began to ask myself why the
whole grisly Brexit business had turned out so differently to what I, and many others, had
expected. Now it's true that politics is unpredictable, but in 2015, any satirist worthy of
their name would surely not have dared to imagine a sequence of events so bizarre as that
which actually happened. And of course we can all be wrong, but I was basing my judgements
not only on a lifetime of watching politicians at play, but also on the well-understood
general principles of how politics, and especially international politics, operates.
The conclusion I came to involves conceding that, yes, politics is unpredictable, yes we
all make wrong calls from time to time, but there's something more profound than that. Simply
put, the traditional rules and procedures of British politics have stopped applying. It's not
now possible to count on the British system for planning, forethought, rationality, strategy,
tactical sense, political sense, common sense or any other kind of sense.
Consider. Cameron's referendum promise was an error of judgement, but it could have been
handled very differently even so. I'd assumed that there would be some kind of threshold (55%
perhaps), and some provision for a later stage of reflection and time-wasting.
I assumed that the government would be wary of the possible result, and try to
de-dramatise the referendum campaign.
I assumed that Remain would do a reasonably competent job, underlining the positive
benefits of EU membership.
I assumed that the result, if it was "leave" would be the beginning of a long process of
reflection and discussion. A Royal Commission, or something, would be set up, with several
years to work out what kind of future relationship there should be with the EU. Bits of the
UK most affected (agriculture for example) would be consulted in depth. Discreet soundings
would be made throughout Europe to see what our partners might accept. Only after all this
was done would it be time to press the Art 50 button.
At that point, I assumed, the UK would be well prepared and, in the traditional manner,
have working papers and draft treaty language to propose as soon as the negotiations started.
All aspects (including NI) would have been at least thought of.
I assumed that the Cabinet would have agreed a fairly detailed set of objectives and
negotiating guidelines to give to the UK delegation, fine-tuned in the light of first
reactions from partners.
I assumed that the Cabinet would have agreed fallback positions and some idea of what the
Tories, and Parliament, would accept.
Literally none of this was true.
Now we're not talking rocket-science here. Yes, the UK system was once pretty Rolls-Royce,
but the kind of list I've given above would have seemed obvious to any middle-level
functionary of any medium-sized country. Actually achieving all of it is not necessarily
easy, but at least you can make a serious attempt: there are important stakes involved.
So what does this imply for the future?
Well, things are getting worse, not better. The Cabinet hasn't even begun to think yet
about the future relationship. Some of them probably think Brexit is all over. I don't think
there's any agreement even about the vaguest outlines of this future relationship, which
means that it could be months before any political objectives emerge, if they ever do.
Which is to say that we are in for another year of Keystone Cops diplomacy, with the
stakes if anything even greater.
From Clive:
Your thought-process sounds like my trains of thought. And when I think those sorts of
thoughts, I think that I'm a remnant or a bygone era. Which I am.
What disappeared from that world was playing fair. Everyone played fair, or, at least,
playing fair was a bedrock than you could drift away from, but, sooner or later, you fell
back on it.
There will be a lot of casualties until our societies get to the stage where they can
rediscover fairness. I bought a book from a second hand bookstore about the founding of the
EEC, from 1978 I think the copyright said it was. When I read it, it's like it was written by
some long-since vanished ancient civilisation. There were honourable intentions, strategies
to deliver them, honest evaluations of emerging problems and, above all, a shared shouldering
of responsibility to resolve them equitably. There was a sense of pride which leaps off the
pages not at what had been achieved, but at what the prevailing culture intended to achieve.
The book went on about the European ideal -- and didn't think it was in any danger of
naivety.
That world has vanished -- and it's not coming back any time soon.
Brexit was a reaction to that. We can't fix it, think a majority of the U.K. population,
and we're not even going to try. This is why Leave has progressed the way it has. The last
thing the Leave majority (or maybe the smidge over 50% who think Leave is the best option)
want to do is try to return to the failed common-cause based solutions. Johnson has no
intention whatsoever of anything other than the lightest of lightweight FTAs -- or even no
FTA. Anything more would be an anathema to the Thatcher-esque approach the Conservatives have
on remaking UK society by severing all EU ties. This isn't really Thatcherism -- a common
misconception. It's the sort of response which Thatcher would have devised, had she been
placed in the same position, so is easily confused.
So this isn't some unplanned, accidental stumbling along to an unexpected surprise
conclusion. It is, rather, a laser like focus on an intended destination.
Anyone expecting some great effort or thought-process to be applied by the U.K. to
salvaging a relationship with the EU will be disappointed. In effect, they'd be asking for
the U.K. to spend time and resources saving something that isn't, in the U.K.'s prevailing
worldview, worth saving. The EU has been nothing but a bother, so the thinking goes, what's
the point in trying to flog the dead horse that is the European ideal? What did it ever do
for us, anyway..?
Brexit is just a here's-one-we-made-earlier example of a long-term global trend. If
humanism -- or fairness as I reduced it to earlier -- makes a comeback, it might all be
fixable. In the meantime, prepare for an increasingly atomised, separatist world.
Vlade's response:
I'd like to agree with you. Except I believe you're idealising it. The world was never
playing fair – but it did cooperate more, because the US needed the Europe more in the
cold war than it does now (when it's more of a rival, definitely in Trumps' eyes). Hell, the
Soviet Block cooperated – except it didn't really, it did what the SU told it to. But
it definitely didn't play fair. It did follow the rules, because the cost of breaking them
was seen as too high (US was terrified I believe of France and Italy doing a deal with the
SU). At least to me, following the rules and playing fair are distinct.
It's possible that the western society was more fair before 90s, I can't know. But again,
I suspect that a lot of it was almost a self-protection against the SU and "communism", which
disappeared in the 80s., but possibly started disappearing even in 70s (when you live with
some danger for a while, you get oblivious to it).
I do think that the Brexit was a reaction to the word that was. But I disagree that it was
really the EU specific reaction, as in "the EU is the source of all this". It played the
part, but the underlying reasons were IMO much more varied than the EU – where I have
doubts many of the people there really understood in any way, except as an externality you
can rail against.
You get the crawing for the world-that-was in the US, and it doesn't have any EU. You get
it in Russia, and it has the EU and the US, or, if you want, "the West" which puts
conveniently both of them together.
The world as most people knew it is coming apart, and chances are it will get worse (and
who knows it it ever gets better). In times like those, people want the world-that-was.
Sometimes it can actually be a force for good, like after WW2 in "the west". Except even
there it wasn't the world-that-was, but more of the world-we-want (on both sides of the iron
curtain, there was a reason why the communist regimes were, at least initially, strongly
supported by the populace). But wanting the world-that-was was also what brought Nazis and
Fascist into the power.
And PlutoniumKun's:
A key casualty of neoliberalism was corporatism in its more benign form. It used to be
that policy was made in the early hours in those proverbial smoke filled rooms where
different groups at least made some type of attempt at compromise. This is still a feature of
many countries and sectors, but I think its significant that the rot is most advanced in the
neolib early adopters. It's not just the formal art of making compromises, it's the simple
force of human contact when people in the same room together. It's unfortunate I think that
the UK joined the EU just as it lost interest in being run by civil servants having endless
meetings with sectoral interest groups. This is a core reason I think why the UK never really
engaged with the EU, even if in the short term its engagement was quite effective
(essentially bullying other countries into getting its way on issues like agriculture and
competition policy).
But as we've discussed before, the long term destruction of the British civil service has
in many ways been just as stupid, and just as damaging, as the long term destruction of
Britain's manufacturing base. In both cases, the reasons have been ideological, not
pragmatic.
Outsiders I think see it more clearly. I was travelling in Asia for a while and I was
really surprised at how casually people would discuss what they see as the once admired
anglosphere fall apart. Most Asians in my experience viewed Britain with a mixture of
distrust and some awe and admiration. Now the commonest response seems to be a shrug of the
shoulder or just plain schadenfreude.
This bodes particularly badly for the UK's trade negotiators when they start face to face
meetings. They will be a little like late 19th Century Russia or Turkey -seen as a country
who's only right to be at the top table is due to history, not present circumstances. The
gradual retreat of the US from the eastern Pacific is pretty much seen as a done deal,
everyone is frantically scrambling to ensure they are not caught on the hop. I'm a great
believer that the true indicator of what a country sees as its future can be seen in what it
spends its military budget on. Every major Asian country is spending serious cash on
domestically sourced air superiority, long distance strike capability, in addition to A2AD
for its brown water coasts.
There are many parts of the world where the 'old ways' are still pretty much intact
– much of Europe still likes the EU and the way it works and vaguely corporatist/social
democratic ways of doing things. Its easy to get carried away with stories of austerity and
decay, but when I travel in Europe much of it (including countries like Spain and Portugal)
look pretty good and no more or less full of discontent than they ever were. Much of northern
Europe and individual countries like Portugal are doing very well indeed, and France has been
defying the naysayers for as long as I've been reading English language economics papers and
magazines. Its not clear to me that the foment in those countries – even in France
– is much worse than its been in any given post war decade. There are cycles within
cycles for these things. Ireland is, all things considered, booming economically and
culturally content, austerity a long forgotten problem for most people.
What we are seeing is the postponed breakdown of the traditional centre left and rights.
The wipeout of traditional left wing parties has been much commented upon, but less obvious
is the breakdown of the old Christian Democrat/centre right tradition in much of Europe and
other parts of the world in favour of a more libertarian/populist/nationalist form. It's just
that the change has tended to be more within parties, while the left is always more
fissiparous.
I think the left is slowly, very slowly, reformulating along lines closer to the older
anarchy tradition, as seen by the rise of Green Parties – but it will take time before
a more grassroots, collaborationist form of left wing politics really starts to make a
difference. I think the libertarian/neolib wing of the right is being well and truly wiped
out by the more ruthless nationalistic (I hate to use the F word) tradition. The
transformation of the Tory party into an English nationalist party with a focus on serving
its new working class/lower middle class base has been carried out with quite remarkable
speed. The Tory business class will come to deeply regret its silence over the internal
revolution that took place post the Brexit vote.
All this of course is within the context of slowing growth and a rapid climate
deterioration. All bets are off in significant parts of the world as the fires rage. The only
certainty about climate change is that there will be completely unforeseen negative
impacts.
Sorry, I forgot to say that this was one of these think-provoking posts that I like so
much.
In a loosing fairness world, what is the proper personal conduct one must follow? Go with the
trend, or try to keep the old-style way as much as you can?
I would expect the whole spectrum of answers to this question. Fortunately, there will
always be some people that put fairness forefront.
" Fortunately, there will always be some people that put fairness forefront "
Yes Ignacio but I do hope youngsters don't become embittered by a world that is certainly
a lot harsher for them than it was for me 40 odd years ago.
After a year of fighting to get money from those who have plenty of it, am now working on
a transatlantic commission for a wealthy guy from Colorado, who has actually shocked me with
his fairness – particularly as I was worried about the possible downsides of getting
into such a far flung relationship.
He has actually kept my head above water while am waiting for a large long overdue payment
from a public institution that I almost wish privatisation on for their lack of effort in
addressing the situation.
I had a great Christmas trying to play Santa without the suit, with the best bit being the
giant full facial smile received from one of those likely old beyond her years Roma women
selling " The Big Issue " as she sat as if clinging to the wall in the pouring rain.
I hope everyone at NC is having a fine Holiday can anyone post the link to some of the
videos explaining neoliberalism posted at NC a short while ago? Can't seem to find them.
Thanks
I've just tried, for the second time, to watch that video. For me, it is too quickly paced
to be effective, or even informative -- and mind you, like other NC regulars, I KNOW this
stuff. IMO, Nancy MacLean's "Democracy in Chains" does a much better job. Yes, it takes more
than 26 minutes to read -- but I think understanding what has happened to the world over the
last 75 to 80 years SHOULD take more than 26 minutes.
Yes, it is quick paced. I had to do the pause-rewind-replay this or that bit,
pause-rewind-replay steps several times to get what was being said. Too much condensed info
for me to take in all at once.
Thank you, Yves. This post is about exactly the sort of thing that keeps me up at night.
Frankly I spend a lot of time mourning for what our society used to be, and the notion that
nobody has the backbone to do the right thing regardless.
I spend my share of time in conversation with many people in the upper/middle class,
business leaders and Conservatives in particular. The entire thinking is, "Losers cry about
being fair, winners go home and bang the Prom Queen". [paraphrased]
I always ask them if this is the kind of society they want to live in, and raise their
kids in. It is lizard brain, writ large.
Anyway, I just want to say "thank you" for all your efforts as a beacon in the darkness.
It is comforting to know that someone else also can see.
They dont have the backbone as we are deep into the "time of the end" where the love of
the greater number will cool off, they will be lovers of money and themselves, and the list
goes on. This system of things is all Satans and its on the verge of being extinguished
forever.
What disappeared from that world was playing fair. Everyone played fair, or, at least,
playing fair was a bedrock than you could drift away from, but, sooner or later, you fell
back on it.
Was it "fair" or was it Because the Soviet Block offered an alternative, purportedly
Communism but what appears to me as totalitarianism. The alternative to the Communist block
had to appear more appealing for the players to gain advantage in the great game.
With the Communist block gone, do we now just see the reality, and whatever accommodation
was made to have the Western/US based system more appealing has now changed. How is the US'
system viewed in Latin America? As "fair?"
When the British Empire controlled much of the world, was it "fair"? I was a part of that,
and I could not describe it as "fair".
In the British Empire's demolition the US played a good part of being "fair," but it was
"fair" only if it advanced the US' interests. An example of this is the forgiveness of War
Loans. Germany, on the Soviet systems' door step had war debts forgiven. The UK, which paid a
huge penalty for fighting the wars received no such favor for its "special relationship" with
the US, coupled with a not-so-polite demand to dismantle the British Empire (aka Self
Determination).
I perceive the world's governing system not in terms of left and right, but as the surface
of a sphere, with the the horizontal axis being changing from "free" to "totalitarian" which
can be approached from the political left or the right, and the vertical axis varying from
market based (neoliberal) to centrally controlled, and any country is always being affected
by words or threats to slide from one point on the sphere along some rhumbh line to another
point.
The idea of "fairness" is one of those things that used to be a lot more clear in the past
than it seems to be today. In general, the rules were the rules, and anyone who decided to
play accepted them. A level and "fair" playing field, with the same rules for everyone, was
what determined the "winner," and made "winning" legitimate.
But lately society has apparently decided to determine the "winners" first, and change the
rules to match the desired outcome. That approach has wreaked havoc with the concept of
"fairness."
Everybody gets a trophy for "participation." Eliminate the electoral college
because hillary didn't win it. Pretend that biological males are actually women because
that's how they "self-identify," and let them "compete" against biological women instead of
those with the same chromosomes.
You can't have "fairness" without rules, and playing fast and loose with the rules means
you can never tell who the cheaters are.
Thanks for this post. It seems like many of the economic and democratic govt and even
social rules once reliably enforced by laws and custom have become mere suggestions. The idea
of rules or fair play that existed from, say, the 1930's – 1980's, in the US now seem
entirely overtaken by a sort of modern, re-invigorated, social Darwinism, a once rightly
discredited moral theory. imo.
Everything old is new again, unfortunately. Neoliberalism is like the old social Darwinism
dressed up in newer, erudite, clothes. Substitute today's words 'the market' for yesterday's
words 'the strongest and fittest' and you have a pretty close 1:1 match. Misapplying Darwin's
studies in biology to sociology.
The following text was written for school kids' history class. It's a quick read.
And way before Darwinianism, at the dawn of capitalism, we had the Puritans.
According to their doctrine, if you were wealthy it was because you were favoured by God.
If you weren't wealthy, God didn't intend you to be. In every era, the selfish and the greedy
have a justification.
Nothing to do with the fact that you stitched up your fellow countrymen by enclosing
common land and kicking those that had used it for generations off their means of self
subsistence.
Your comment about the courts role in eroding a sense of fairness and, by extension, trust
in the system called to mind the courts' role in maintaining the vast US prison system. The
Supreme Court was recently considering a case filed from a pro se prisoner and Justice
Sotomayor referenced a secret policy within the Fifth Circuit Court of Appeals of denying all
petitions filed by pro se prisoners for thirteen years without even so much as glancing at
the briefs. The policy only came to light when an employee of the court referenced it in
their note before committing suicide, apparently out of guilt.
The Fifth Circuit happens to include Louisiana, which has the highest incarceration rate
of any state. Eventually the policy was reversed, but in practice I'm sure most filings from
pro se petitioners in prison are met with a similar lack of interest and consideration.
Perhaps there are good reasons to dismiss some filings quickly given the large backlogs and
legal rumors and nonsense that makes it way through prisons.
However, the courts remain the last best hope for prisoners in trying to overturn wrongful
convictions or address abuse at the hands of prison officials, at least for now. If the
courts are happy to deny these people fair consideration for efficiency's sake unless they
can secure outside counsel you can bet this abuse and neglect will continue. Maybe that
sounds like a fine trade-off to those in power now, but the long-term effect is the erosion
of trust and confidence in the system beyond just those directly affected.
Another consequence of the loss of fair play is a termination of the phenomenon that many
workers, especially white collar workers, wanted to believe that their employer was
trustworthy and, as a consequence, they trusted their employer at a higher level that is or
was warranted. This trust was mis-placed to some extent but served as a bulwark when
relationships between employee and employer became strained.
I wonder now, whether this is still the case. It seems not to be. Granted employers have
earned their employees distrust or, at a bare minimum, lack of trust that formerly was
granted (due to wishful thinking).
I know exactly what you're talking about. Before I was laid off, I watched as many
colleagues were shown the door. Oddly from a trust perspective, most of these people were
vastly more talented and experienced than the employees who continued to keep their jobs.
(Though, of course, from a strictly shareholder perspective, their high pay levels justified
their dismissal.)
So from the canned employees' point of view, after years of awards, high praise and
affirmation from management, the fact that they were being hustled out the door (sometimes
literally) amounted to a profound betrayal of trust. And you could see it in the look of
shock on many of their faces.
When my time came, I had absorbed the lesson and had completely detached my ego from my
work, no longer taking any pride in what I did for a living. And I never will again as long
as I'm working for someone else, even an employer who in the moment is kind and appreciative.
They can turn on you in a heartbeat, and for the flimsiest of reasons.
Just to add in impeachment (prexit?), it once was considered a big deal that Nixon lied
("the coverup is worse than the crime"). And lying was at the center of the Clinton
impeachment. But that's less true with the current dispute and perhaps that's because the
impeachers themselves are shamelessly lying. The truth no longer seems to matter to anyone as
long as a fairy tale "narrative" can be found to substitute. Perhaps it's not so much that
the world has become more evil or selfish but that modern society has a serious reality
problem. People still understand fairness but simply pretend they are being fair as long as
nobody is challenging their narrative (see Amazon post today). And that may be because we are
saturated with media that are all too willing to tell us what we want to hear.
Thank goodness for NC where some of us come–and for a long time–to find out
the truth. Perhaps it's not just a coincidence that many of those who hang out here seem to
be older–old enough to remember a time when truth mattered.
A little more patience, but not too much, is needed in awaiting the inevitable and
continuing sunlight disinfectant applied to so many top level employees of the FBI, DOJ,
their institutions and other malefactors in other branches. When, not if, that day arrives,
when perp walks, trials, sentencing, mea culpas and much feckless deflection and gnashing of
teeth occur, then will there be some perception of a symbolic return to the fairness that was
once felt by much of the country. The preponderance of evidence, not punditry or spin, points
to likely criminal convictions, ruined careers and discredited institutions. Repairing those
institutions, and regaining public trust will be difficult given the inertia and FUD residues
that have built up, but we do have a country at stake for all of us.
There are many other aspects of the justice system that need review and reform, as noted
by other commenters. Without some highly publicized changes to those institutions to restore
some initial and fundamental element of trust, then people both in the US and abroad will
have doubts about the Rule of Law. Most people do not want to have a country where that
statue of a blindfolded justice has to peek to see who is trying to tip the scales.
The main word used here is fairness but what we are really talking about is justice. It
does not matter what country or culture that we are talking about, we all know when we are
being treated fairly, or justly, and when we are suffering an injustice. An example? Two
people have a meal together when one reaches over and helps themselves to the food on the
other person's plate. That sort of unfairness can get you killed in some places. But likely
that feeling of unfairness or injustice is universal.
And here is the crux of neoliberalism. It picks sinners and losers – deliberately
– and abandons those they deem to be losers. But it does not do so on the basis of
worth but on what it perceives to be worth which is why a college sports coach or
administrator can earn millions while a professor earns peanuts. If anything, there is a
strong streak of Social Darwinism to this as a justification to who these "winners" are. But
most of us can think of people in business, sports, politics, etc. who in reality aren't
worth two bits based on their performance.
The result for the UK? Those designated the losers who were abandoned, policed and watched
by the winners saw their chance to strike back at them by picking Leave in the Brexit
campaign. Life was not good for them and it was not going to get any better and so they
decided to make a choice to deny the winners something that they valued – Remain. There
is not a doubt in my mind that if these people had not been abandoned but had been able to
share in the success of the country, then they too would have chosen Remain. You saw the same
with the Trump vote in 2016 in the US. And this is only the first installment.
I think the insight in your last paragraph, more than any other single factor, explains
Donald Trump's electoral success in 2016 and identifies who his "base" really are.
The court system is perhaps the best example of how Fair Play has been degraded in the
US.
For 20+ years we ran a small mom-and-pop consulting business for large companies, all
Fortune-500. We did highly technical work with such efficiency and economies of scale
providing industry standings and granular decision support, the companies themselves or
McKinsey-types could never come close to doing a similar product. At least until an industry
association, facilitated by a customer decided to steal misappropriate our
intellectual property and produce a knock-off product. This happened even though we offered
to collaborate with the industry association and had a "good" contract prohibiting
stealing misappropriation.
Let it suffice to say that a mom-and-pop consulting business is at serious disadvantage as
soon as you get a lawyer and file a lawsuit in federal court. The defense attorneys were
given a blank check by their members and spent high 7 figure sums trying to pulverize us. By
the time the thing was winding down, we were paying our attorneys our of our retirement
account. I understand that in the UK and EU things are even more stacked against
plaintiffs.
While 98% of federal civil cases and tossed out or settled, we ended up with a 3 week
trial. The defendants team had 3 partners, an IT person and paralegal from a national firm in
court at all times, plus 3 people working locally at rented office space. We had a mid-size
regional firm represent us -- it was not cheap.
What strikes us most is the defendants seemed to be on home turf from the get-go with the
court. There were YEARS of delays and all sorts of spurious filings and even a counterclaim
based on fiction. This is standard procedure. Further, it was a highly technical case and we
performed thousands of hours of work to refine the details for the lawyers and jury to
understand. The defendants had unlimited resources to obfuscate and confuse, which they did
masterfully. The majority of evidentiary ruling were in favor of the defendants. It was a
huge upward struggle.
What is even worse is there is zero incentive for defendants not to lie
mis-remember facts. Our lead attorney told us in 25 years of litigation practice he had never
seen or heard of a sanction, much less prosecution, for perjury. In fact some of these
liars were promoted and rewarded for their courtroom performance.
This whole process took 5 years. We "won"; the jury didn't buy the industry's arguments.
But our business was destroyed, we've been blacklisted and any residual value a business with
20+ years of stable income was destroyed. The industry group pays their staff handsomely (its
just added to your monthly bill) and while a few people were pushed aside, the main perps
remain and are well compensated. They plod along with a garbage imitation, but the
associations membership executives don't care -- there is no third party assessment of their
performance -- they grade their own performance now.
Needless to say, we are tired, disgusted and cynical. But glad we won and that it is over.
I would not do it again
It reminds me a bit of the Phone Hacking trial in the UK. Peter Jukes has a good book on
it – Beyond Contempt. The mismatch between the resources available to the News
International people and those available to the British Government was risible. As a result
News International was effectively in control of the proceedings almost from start to finish,
though the Crown was able to get Coulson as there was incriminating evidence against him in
writing.
Yes there may well have been perjury as well and the police seemed as I recall to have
been very slow to get to a farm where there were reports that major bundles of paper were
going on to a bonfire. Hugh Grant, when he taped a journalist, was told that 20% of
Metropolitan Police officers had been bribed by the press. Wonder if that had anything to do
with it?
And yet many Britons still think that the UK is a pretty straight place ..so much more
honest than those foreign countries.
Have recently watched series The Loudest Voice about Fox News. They make Murdoch look like
an avuncular figure in order to heighten the villainy of Ailes but of course you don't let
the organ grinder off the hook so as to blame the monkey. No Rupert no Fox News and perhaps
no current version of the NYT that acts like Fox News.
Thanks for the summary of the courts' action as a millstone around the neck of honest
commerce, and my sympathy for your loss.
It's worth remembering this kind of thing has consequences too. Fred Koch patented the
basic refining processes to turn crude oil into useful products, then the Rockefellers'
refineries essentially stole those processes (used them without paying patent royalties) in
their refineries. Koch sued .and *lost*! A few years later it came out that the Rockefellers
bribed the judge and Koch re-sued and won but at what cost? And ever after Koch and his
offspring came after the government whose courts were so corrupt.
The lament about declining standards is as old as the Pharaohs–read Howard Zinn's
People's History of the U.S. which exposes the New World's history of
venality–but recent events seem to be sounding the depths of the most profound
dishonesty. It's gotten bad enough that political economist Mark Blythe talks about the
positive impact a disaster like the Climate catastrophe would have in breaking up this cabal
of evil.
Your story reminds me of Florida inventor Steve Morton's case against copyright theft
being closed down and covered up by then-FBI Director Mueller and then-Attorney General Eric
Holder. Definitely a good example of unfairness at the top of the system.
For further information on Morton's case and story a good search engine for "Steve Morton"
, " Fincantieri ", " Mueller", " Holder" , "Comey" , ought bring up an outlet covering said
situation.
> The gradual retreat of the US from the eastern Pacific is pretty much seen as a done
deal,
> everyone is frantically scrambling to ensure they are not caught on the hop.
Not sure I understand this. Eastern Pacific? What retreat?
Wall*Street is often described as a casino, but in reality most every house of chance has
a security exchange commission of it's own, making sure that there is no cheating, and fair
play on both sides of the green felt jungle, and should a dealer in it's employ be caught in
an act of larceny, they'll be arrested toot suite.
When Wall*Street was paid off on losing wagers a dozen years ago, fair play lost it's
luster and has only become more meaningless in it's absence.
"I see in the near future a crisis approaching that unnerves me and causes me to tremble
for the safety of my country. . . . corporations have been enthroned and an era of corruption
in high places will follow, and the money power of the country will endeavor to prolong its
reign by working upon the prejudices of the people until all wealth is aggregated in a few
hands and the Republic is destroyed."
-- U.S. President Abraham Lincoln, Nov. 21, 1864
(letter to Col. William F. Elkins)
"These capitalists generally act harmoniously and in concert to fleece the people, and now
that they have got into a quarrel with themselves, we are called upon to appropriate the
people's money to settle the quarrel."
speech to Illinois legislature, Jan. 1837.
I find your Lincoln quotes curious. I thought Lincoln that after splitting wood for rail
supports Lincoln made his name and money as a lawyer arguing cases for the large rail road
corporations. If so, the quote you provided seems much like Eisenhower's speech on the
Military Industrial Complex.
"Lincoln made his name and money as a lawyer "
How better to learn about the 'real' machinations of the ruling elites? What Lincoln did with
that 'education' was what made him famous, not the education itself.
The word 'multiculturalism' has a range of meanings, both sociological and political. You
need clearly define your meaning of the word. As it is, your assertion is vague, imo.
I imagine that the operative word in his or her comment is "imposed." That implies an
'authority' that can dictate to everyone else. Such a state of affairs would be the opposite
of what I grew up imagining "progressivism" was.
What are the conditions imposed?
Because as much of a problem as people have with the idea of "cancel culture" there still is
the flip side that people aren't going to continue to let themselves be treated like
garbage.
The ultimate 'problem' in all this is the perennial one of who controls the resources, or,
as Marx and Engels put it, the means of production.
People will be "treated like garbage" for as long as 'garbage' is all that is available to
them. In an extremely unequal society, as the modern Wast has evolved into, once some
threshold of resource 'ownership' is crossed, the only feasible method of redressing the
balance seems to be outright revolt and warfare. Except for the example of Cincinnatus in the
Roman Republic period, (See: https://en.wikipedia.org/wiki/Lucius_Quinctius_Cincinnatus
) who knows of a time when concentrated power ever voluntarily gave up any significant
portion of their powers?
Inequality is inherently unfair.
With the site admin's forbearance.
We encountered the 'ground level' fruits of the loss of the ethos of fairness yesterday.
Phyl was told to see the "Pain Management Practice," an independent section of the local
medical apparat in order to 'manage' her use of the pain meds she was prescribed for her
amputation. So far, so good. The appointment is for two o'clock. Show up at one thirty
o'clock to fill out paperwork. Due to a tight schedule and other impediments, we show up at
the office at a quarter to two o'clock. The receptionist nurses, who sit at a desk behind an
armoured glass partition, tell us that we are late and must reschedule the appointment for
two weeks later. At which time, Phyllis begins to argue. This is normal behaviour with her
when confronted with 'unfair' conditions. One of the receptionists relents somewhat and goes
back into the back room and consults with someone.
She returns and declares; "No exceptions are allowed. You are late and that is that."
Phyl replies: "You can see my problem. Are you going to be rigid?"
Receptionist; "The best I can do for you is two weeks off."
Phyl; "Is there anything sooner?"
Receptionist; "Do you want the appointment or not? We have work to do here!"
Me, sotto voice to Phyl; "We will get nowhere with this bunch. Take the next appointment and
we'll see what we can do later."
Phyl; "All right."
As we left the waiting room, one of the two patients sitting there was visibly trying not to
laugh. The other patient got up and helped open the large glass door so I could maneuver the
wheelchair out into the hallway.
The point of all this, (besides an apologetically admitted venting on my part,) is that this
medical establishment has opted for a rigid and formalized rules based imposition of
authority in place of any sort of fairness or flexibility in dealing with their clients. (I
use the word client in it's original [?] Roman sense.) Speaking with several of our neighbors
yesterday I have discovered that this sort of rigidity in scheduling is becoming more common
around here.
One of the main features of fairness, at the least in medical situations is the belief that
the patients deserve some leeway in their treatment at the hands of 'officials.' This new
experience of ours highlights the emerging ethos that the system is paramount now. The
patients are now there for the convenience of the providers, and their stockholders. Fairness
has now officially been banned.
I was going to make a remark about this system change being an example of late stage
capitalism, but just realized that formalism and inflexibility are hallmarks of late stage
anything.
'Fairness,' however one defines it is a function of flexibility. 'Fairness' shows the desire
and ability to think out complex situations and move to balanced outcomes. All 'actors' in
the social situation are considered and dealt with in some semblance of a socially supportive
ethos. Communitarian at root, this has been, as is mentioned several times above, replaced by
an atomistic and minimalist pseudo philosophy. The foregoing because a strategy of adherence
to a rigid and simplistic set of rules in social situations is a rejection of thought and
reflection. "I was just following orders." Does that sound familiar?
Alas, I fear that "things" are going to get much worse in the times ahead, for everyone.
Thanks for your indulgence.
Ambrit, I am so sorry you and Phyl have to deal with humans utterly lacking in compassion
and human decency. If think if this happened to me, I would argued forcefully –
screamed- which would have probably had me removed from the office or banished from the
practice. This kind of treatment from people who are dealing with patients who need help just
makes my blood boil. Unfortunately, I think this kind of treatment towards others is a side
effect of living in an unfair/unjust society. Many people's hearts become bitter and hardened
( like I'm suffering and I don't care if you suffer too). The dark world we live in now is
cold hearted and full of tears. My heart goes out to you and Phyl and all others who are
suffering because of this.
Thanks Elizabeth. The Home Health nurse this morning didn't want to believe our tale. She
finally suggested that we complain directly to the top level of the Medical Organization that
this practice is a part of. I'm going to try that Monday. As a side note, the Physical
Therapist this afternoon mentioned that the nurses are stymied because absolutely no pain med
scrips are written on Fridays. (I found it hard to credit, but reflection seemed to prove her
correct.) This is evidently not just a function of the doctors wanting Fridays off, but a
conscious policy on the part of the local medical establishment. [Your only recourse would be
to admit yourself in to the Emergency Room I was told. Hmmm . what's the most expensive part
of a Hospital practice? You guessed it!]
My favourite aspect of the "visit" to the Pain Management Office was the presence of the
armoured glass partition between the Lobby and the receptionist's desk. This assumes that
someone in the physical office planning stage anticipated a high potential for violence in
that office. {I wonder why?}
I was tempted to let Phyl scream her head off, but remembered the presence of a uniformed
'Security Person' in the building lobby. The two behind the glass partition looked like, and
acted like the sort who would love to smack an unruly 'client' down. /Bored and smug would be
how I summed up how the two women appeared.\
Luckily, Phyl is already tapering off her drugs usage, so, there is a small cushion with
which to maneuver around this unholy edifice of Mammon.
I wonder if Phyllis's doctor could refer her to another clinic, one a little more
compassionate to people in pain? (Couldn't they let you finish the paperwork while you wait
in that little room for the always late doctor?)
This story has me enraged for Phyllis and also you. I am so sorry. Two weeks. The
audacity. Making her wait even a day! (I am almost crying in frustration. So very sorry)
While I definitely agree that ruling classes have deteriorated remarkably over the last
few decades, I don't think the old days were very fair either. Fairness is of interest -- in
fact, it's crucially important -- in a society composed of people who are more or less equal
and autonomous. It's a way to get along without a lot of conflict and risk. In an highly
unequal society, like those of the US and the UK, it's much less valuable than access to the
levers of power. You don't have to get along with those you can crush or brush aside. As the
scene here in the US continues to deteriorate, I expect concepts like fairness and justice to
seem more and more quaint to the movers and shakers and fixers, until finally the general
system breaks down completely. It's anybody's guess what will succeed that.
I think this loss of fair play is partly because many have realized that fortunes can be
made simply by gaining exceptions to established rules and laws. There have always been
exceptions, here and there, but our situation now is there are exceptions to established
rules everywhere. Companies can now simply lobby for some exclusive benefit or to ignore some
law that everyone else must follow, and then collect a risk free guaranteed profit for
essentially doing nothing.
Many large firms use these exceptions in the form of legal protections not available to
their competitors to both attain and maintain their competitive advantage. These protections
include ignoring existing laws, profiting from illegal businesses where profits exceed fines,
and profiting from exclusive U.S. government subsidies not available to competitors. The
banking and drug industry are notorious for routinely engaging in illegal practices that
generate profits which far exceed the fines that regulators impose when these firms are
caught. Preferential government subsidies that benefit a single company in an industry are
now also acceptable business strategy as companies like Amazon can obtain confidential
agreements with the U.S. Post office to ship packages for at least half of what UPS and FedEx
would charge for the same deliveries. A subsidy like this contributes to the many reasons
that its competitors are driven into bankruptcy, and probably explains why Amazon's retail
business
loses money everywhere except in the U.S.
Many small firms, especially tech unicorns in their early days, use these exceptions in
the same way. Amazon started as a small company that would sell mail-order books in a way
that allowed it to avoid sales tax. Early Uber investors were probably attracted by a belief
that government will look the other
way while it made cab rides cheaper by ignoring local taxi regulation, then transferring
all its business costs to its drivers, and then collecting a substantial fee for each of taxi
fare. AirBnB started as a small company whose rent would also ignore local hotel regulations,
zoning laws, health laws to prevent public health hazards, and fire safety codes. Small drug
companies like Turing Pharmaceuticals can simply acquire patents for drugs with no substitute
and then raise prices by 5,456%.
The problem is that too many of these risk free 'rent seeking' opportunities can overwhelm
an economy filled with corporations who are all chasing the highest risk adjusted rate of
return. When there are too many of these rent seeking opportunities in an economy then its
companies will select only these risk-less rent seeking strategies, while abandoning all
riskier but socially productive profit strategies like the pursuit of new breakthroughs,
product innovations, design quality, superior service, and product reliability. A related
negative outcome which you hint at with 'fair play' is most of these rents offer particular
exclusions from laws designed to protect society like those prohibiting consumer or investor
fraud, prohibiting worker exploitation, ensuring consumer safety, and maintaining financial
market stability.
So an economy with systemic rent seeking often incentivizes its corporations to abandon
their socially productive profit strategies, and then replace them with risk-less 'rent'
strategies where profit comes from ignoring laws that protect our society from fraud,
exploitation, and economic disruption.
Jeff Bezos was the first thing that popped into my mind. The Technocracy –with no
room for humanity, where the masses serve as hosts for 24/7 parasites – the second.
In this neck of the woods,Silicon Valley, the infestation of unfairness reflects itself
everywhere, particularly in the homelessness. Cars, the way they're driven, and how they are
judged, are also a perfect example. You can see it in very pricey new model cars with
dangerously blinding LED lights as the norm (which an insane National Highway Traffic Safety
Administration has yet to address after over a decade of complaints); so called demon
light headlight adaptations which make the car appear like a predatory night stalker in
one's rearview mirror; and disturbing personalized license plates, saw one the other day that
said MALWARE. And then there's the judgment by vehicle. After having lived where I am for
over a decade, was asked by a new neighbor, in a brand new vehicle, if I needed directions,
as if I was lost, when I stopped to speak with another neighbor in my not clunker looking,
almost 20 year old car. It cut me to the bone, as words can.
Small businesses are increasingly losing their shirts and being shut down due to amoral
commercial property owners; Amazon; Google, Facebook and Apple Campuses ™; and
corrupt mayors and city council members' neighborhood planning ™.
The Silicon Valley CalTrain commuter line just had its 16th pedestrian fatality of the
year in early December (a thirty two year old female youth therapist), and a hospitalized,
attempted 17th fatality, 9 days later; despite ever increasing rail vigilance. Meanwhile the
Local News™ keeps alluding to track improvements versus addressing the now tangible
despair. It's all gut rending and no surprise that Santa Clara County led California in
negative migration between 2018 – 2019. Unfortunately many were left with no means to
even leave, and/or couldn't leave their loved ones who needed them..
The age old term walking in another person's shoes – implying looking beyond
oneself, treating others fairly, and not taking ones luck in life as an indicator that
they're worthier people – seems utterly lost on many who are doing well and wish the
millions of 'losers' would disappear from their sight.
Who will be the new Wright Patman?
Who will be the new Sal Pecora?
Prior generations provided guidance on how to identify and call out unfairness, and get
meaningful results, for the benefit of the citizenry.
With absolutely 100% respect to the original posters and their points, I'd side w/Vlade
and argue that there are some serious rose-tinted glasses being worn.
Yes, (in my opinion) there was an era of "fair play" .but this was a flash-in-the-pan
consequence of WWII. As rightfully the bottom 95% earned their just desserts after years of
sacrifice for their country and rescuing the elites from the literal existential threat of
authoritarianism.
Now we're merely reverting to the time immemorial-style of 'every person for themselves'
social ruthlessness. sadly.
As I recall, the elites were in no danger from authoritarianism in the 1900s. Au
contraire, they profited at every turn from the acts of authoritarianism. Prescott Bush and
other business leaders (sic) did business with the Nazis and Fascists, and even with the
Japanese imperium. These days, platforms and algorithms setvup by the Elites of this time
loot and pollute and accelerate the many races to the bottom.
Good thing for that "life force" that when the last Elite human (possibly the last human
of any sort) dies, there will be other species already carving out niches of precedence and
preference It hurts, a little, to know we won't be missed
This post is a tad deceptive. It sounds like a review of neoliberalism and all that has
happened since c. 1980 when in fact it is now The Question. What is fair play/ What is/was
fair play and how do we create it going forward. Now that there can be no growth, very little
manufacturing and no labor unions as we once knew them. Automation and an elite class of
oligarchs and their functionaries are taking over. States/Nations still have their
constitutions but they are creating internal conflict as the old ways disappear back into
what Varoufakis calls a new feudalism. Like upstart above, however, I have only experienced
fair play in the courts, never in economic situations. But then I'm old, b. 1946, and female.
So I'm keeping an open mind as best I can, like the above clips from David, Clive, Vlade and
PK. One thing to add from the FR24 Debate on good regulation – it was pointed out by
one panelist that regulations are stricter in the EU for going into business, but on a
"horizontal" basis. Whereas it is easy to go into Bz in the US, all you need are vertical
connections. I took this to describe the fact that many corporations are monopolies. But
connections are few and far between. And lurking in the wings, as we all know, is climate
change. The new discussion about societal collapse has started. Now would be an excellent
time to interject the concept of fair play. I am optimistic because there is a basic, rock
solid strength in fair play that might serve to make it a survivor.
I've mentioned before that my father, an investment manager who retired around the time
Yves started, made a similar point prospectively. Background: he ran a smallish private firm
in Indiana, but it gave him rather wide exposure, including in a large industrial firm, plus
direct investments, besides the stock market.. Plus, my mother inherited a (then) good-sized
farm that was operated by a tenant.
His comment was that a culture of honesty saved a lot of money, otherwise spent on
guarding your interests, watching the watchers, hiring lawyers, etc. His firm shied away from
investing in anything with a hint of shadiness.
This is merely confirmatory of Yves' point, but from a different point of view and from
before the cultural changes (aka crapification) her post goes over.
And come to think, a younger relative who is a corporate lawyer told us, from her
contemporary experience, that handshake agreements are NOT a good idea. They tend to lead to
her getting involved, and she ain't cheap, nor are the consequences predictable.
I would add that I think human institutions, like human beings, have a life cycle, so to a
great extent the vagaries of, say, Brexit are a result of predictable senescence. Not that
you want to experience the down side, as we seem to be doing.
Your word is your bond.
Another old-fashioned saying that might yet make a comeback, starting with some undergrad
research paper on forgotten sayings of, say, the mid-20th century.
On the opening mention of recruiters and employees ghosting I'd like to add a few thoughts
of how different things are in that regard.
We're now all supposed to be part of some social network or another because we need to get
our names out there and grow our networks. Those services then turn around and pelt you with
emails and phone calls non-stop if you're whatever flavor of the moment they deem desirable.
They also don't give you the time of day if they decide you're not. And those services have
tried to evolve new tools to prevent you turning them away or ignoring them. Emails with
"decision required" and polls and notices that seem to imply if you don't respond they'll
kick you off. That's problem since any boss can fire you for any reason at any time. And they
definitely mention that you're not being polite or fair by not responding to an email
conversation you didn't initiate for a job position you didn't inquire about on a service you
didn't ask them to use.
I have a job I like so I was really annoyed that one recruiter on Indeed couldn't take no
for an answer and demanded I tell them why I wasn't going to permit them to sell my resume to
a potential job opening. I don't understand why we're supposed to be at everyone else's beck
and call and they don't have to respond to even polite overtures from us.
So it's more than just fair play seems to be missing in our society right now. It's that
whatever echoes of fairness exist are used to abuse the people who believe in them. They
steal your time, your attention, your professional connections, anything they can. Then they
complain about you not responding. That's another facet of this that I really don't like.
There is so much one can say on this topic. Unfortunately, I am increasingly pessimistic
and of the view that nothing will really change until we suffer a true calamity as was the
case in the past.
An oversimplifying example. My father was a combat veteran from the Korean War, having
been just a little young to serve in WWII. There was a clear sense of inter-relationship in
this generation. They experienced the depths of the depression and the massive loss of life
and destruction of WWII. My dad eventually became the COO of one of the most powerful
financial services firms in the US. His generation of leaders would never have considered the
(1) levels of compensation relative employees as appropriate, (2) becoming predators on their
customers, they prized their customer relationships, (3) using the firms balance sheet to
gamble at the casino in a heads they win, tails you lose game. It simply wasn't in their DNA.
They had suffered too much to jeopardize shared prosperity and general welfare.
When my father took early retirement he had a unique resume and was offered very serious
positions of prestige and power, with high levels of compensation. He turned them all down,
as did his piers, as they violated an inherent code of ethics and fairness that they didn't
need to articulate it was just their from their shared sacrifices earlier in life.
In my experiences on Wall Street, both as a banker and as a CFO of firms, this would be
anathema.
My only source of hope is that our daughter's generation, she is 27, sees this for what it
is. They fully understand that our society is failing and eschew the loss of fairness on
multiple levels. They consciously avoid politics and participation, not out of laziness, but
because they see our leaders (both political and business) as fundamentally corrupt. She and
her friends have no interest in voting for a neo-liberal (e.g., Biden, Buttagieg, etc.) who
is just better behaved than Trump. They are well educated, have gone to excellent schools,
and want something more from life than a high paying Wall Street job.
We see so much goodness in them, yet worry that it will take a global war or financial
collapse leading to depression to reset our society.
Reagan pocketed a huge, at the time, $2,000,000 speaking fee. That provided the imprimatur
that cashing in was okey-dokey. Later grifters looked on with amusement pondering the blood,
sweat, toil and tears of others that led to their own book and speaking shakedown deals with
multiples of that fee in laundered money.
Two assertions in this post caught my eye:
Firms "that adopted nobler objectives did better in financial terms than ones that focused on
maximizing shareholder value."
I believe firms that adopted nobler objectives -- may -- have done better over the
long-term than firms that focused on maximizing shareholder value but next I wonder about how
well the managers did in the short-term [perhaps even the long-term after correcting for the
differences in the qualities and abilities of the management] in each type of firm. I suppose
mediocre managers did very much better when "focused on maximizing shareholder value". Before
engaging the relatively long read of the linked post discussing details of the study which
the main post refers to -- I also wonder how the referenced study deals with immoral acts
which are not quite clearly immoral -- like outsourcing. Over the long-run outsourcing is bad
for a country, bad for the resilience of a firm, and bad for the firm over the long-run
before we are dead. However, I believe many of the firms that "adopted nobler objectives" --
and remained steadfast to them -- were driven out of business by price competition.
The second assertion:
"Another aspect of the decline in the importance of fair dealing is the notion of the
obligations of power, [w]hat individuals in a position of authority have a duty to."
In regard to this assertion, I immediately recalled Machiavelli's "the Prince". Many of
the ideas of noblesse oblige were anchored in the power and authority of the Catholic
[Universal] Church. Though in conflict with a God Chosen Monarch -- noblesse oblige operated
to attach similar moral authority to the Aristocratic Classes. In my Youth I thought of
Machiavelli as completely unmoral. Later when I learned more about his life and actions I
realized his "Prince" unveiled the unmoral reality behind the operations of monarchical and
aristocratic actions. Neoliberalism has succeeded in stripping all moral coverings from power
and through the efforts of an extremely well-funded Thought-Collective and propaganda machine
it has divorced thinking about morality from power -- except as a thin fig-leaf. Most
significantly it has exalted Power and its co-worker Wealth to positions of 'moral goodness'.
Fair dealing in the Neoliberal moral universe is a slogan without content to fool those
unaware and/or unwilling to 'see'.
I also feel much of the nostalgia for noblesse oblige and critique of the Neoliberal Age
may originate from the residual conflicts and cross-envies between 'Old'-money and
'New'-money. Old-money has already forgotten the immoral origins of its wealth.
Much of this post is related to Brexit -- something I avoided study of or comment upon and
still little understand. I excuse myself as someone squeamish about traffic accidents and
train wrecks though powerful feelings of sadness overwhelm me.
The heart of this post resides in the ancient question of the tie between morality and its
enforcement -- the question for how you would act given a "cloak of invisibility" which is a
prop for posing concrete questions about how you might act without the constraints of dealing
with any of the moral consequences or implications of your acts. I may be a fool -- but I
believe most all of Humankind believes in Justice [and acts Justly] -- the Justice which I
believe The Rev Kev equates to 'fairness' -- which is a much weaker word. But I also believe
there are a certain number of individuals who do not care about Justice and the Neoliberal
Thought Collective has somehow transformed this indifference ['disregard' -- 'disdain for']
Justice into a moral imperative and belittled Justice as a throw-back to benighted times
past.
We live in DarkTimes when the very worst among us claim the most and worse still brand
themselves as praise-worthy while using their colossally disproportionate Power and Wealth to
squelch criticism and amplify their accolades often self-accolades through their wholly owned
Media.
Imbecilization is a normal historical process where intellectual declines follows the
economic decline of a given empire. There's growing evidence the West is going through the
same process.
A with any composite, complex historical process, imbecilization doesn't happen in a
uniform and linear way. Economics was the first science that descended into pseudo-science in
the capitalist world (after Marx dismantled Classic Economics). Philosophy followed. Erudite
art degenerated after the fall of Modernism somewhere in the 1950s. Human sciences in general
became fragmented and little more than a constelation of esoterism and pseudo-sciences - a
condition they still enjoy today (e.g. the dismembering of History into Sociology, Behavioral
Economics and others).
Meanwhile, the so-called STEM or "Hard Sciences" continued to prosper for some decades,
until they also hit a ceiling in the 1990s. The fall of the profitability of the capitalist
world led it to resort to "financialization" to keep the system going, which resulted in the
most brilliant capitalist mathematicians to be hosed to Wall Street instead to the likes of
NASA. Those MIT mathematicians and rocket scientists created the algorithms Wall Street still
uses today, but they did not stop the 2008 meltdown.
Nowadays, those brilliant STEM minds are nothing more than fraudsters who keep their
careers going by creating meaningless experiments (because they need the funding) only to
publish articles and keep their production quotas or self-censuring bootlickers for Wall
Street and Big Pharma. When they get to work for a big corporation, they are mere architects
of planned obsolescence or patent renewing. There's a new book I strongly recommend all of
you to read:
A
beautiful public performance today by the Paris Opera's striking ballet dancers & orchestra. France's strike vs. austerity is
bringing art back into the streets.
"... we have sent the factories to distant lands and eliminated your jobs, and all the meaning and purpose in your lives -- and cheap stuff from Asia is your consolation prize. Enjoy ..."
"... Homelessness in America runs way deeper than just the winos and drug addicts living on the big city sidewalks. ..."
All the people of America, including the flyovers, are responsible for the sad situation
we're in: this failure to reestablish a common culture of values most people can subscribe to
and use it to rebuild our towns into places worth caring about. Main Street, as it has come to
be, is the physical manifestation of that failure. The businesses that used to occupy the
storefronts are gone, except for second-hand stores. Nobody in 1952 would have believed this
could happen. And yet, there it is: the desolation is stark and heartbreaking.
Even George Bailey's "nightmare" scene in It's a Wonderful Life depicts the
supposedly evil Pottersville as a very lively place, only programmed for old-fashioned
wickedness: gin mills and streetwalkers. Watch the movie and see for yourself.
Pottersville is way more appealing than 99 percent of America's small towns today,
dead as they are.
The dynamics that led to this are not hard to understand. The concentration of retail
commerce in a very few gigantic corporations was a swindle that the public fell for.
Enthralled like little children by the dazzle and gigantism of the big boxes, and the free
parking, we allowed ourselves to be played.
The excuse was "bargain shopping," which actually meant we have sent the factories to
distant lands and eliminated your jobs, and all the meaning and purpose in your lives -- and
cheap stuff from Asia is your consolation prize. Enjoy
The "bones" of the village are still standing but the programming for the organism of a
community is all gone: gainful employment, social roles in the life of the place, confidence in
the future. For a century starting in 1850, there were at least five factories in town. They
made textiles and later on, paper products and, in the end, toilet paper, ironically enough.
Yes, really.
They also made a lot of the sod-busting steel ploughs that opened up the Midwest, and cotton
shirts, and other stuff. The people worked hard for their money, but it was pretty good money
by world standards for most of those years.
It allowed them to eat well, sleep in a warm house, and raise children, which is a good
start for any society. The village was rich with economic and social niches, and yes, it was
hierarchical, but people tended to find the niche appropriate to their abilities and
aspirations -- and, believe it or not, it is better to have a place in society than to have no
place at all, which is the sad situation for so many today.
Homelessness in America runs way deeper than just the winos and drug addicts living on
the big city sidewalks.
It seems there's a major political party exactly working against a common American
culture. They jeer at the thought of it. It seems to be the main platform, above all
else.
It is a major party alright BRH, but it is no so much political as it is economic and
socially stratified. They are opulent, self consumed and greedy as hell (literally). There
can only be so many parasites sucking the lifeblood out of any herd of servant beasts, and
they can only suck so long on their hosts before the poor beasts fall over and die. And that
is the tipping point, where we lose enough life blood that we can no longer stand upright,
but drop to the deck and are consumed. It is the classic Goose that laid the Golden Egg fairy
tale being acted out in real life and coming to a neighborhood near you soon.
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Beautiful, thoughtful post Jim, yet to be honest it fills me with a sense of anxiety, and
this is simply because the catastrophic events you forecast, although for the better in the
long run (as they will compel a return to a world made by hand, or the recovery of human
scale) will nonetheless bring much suffering to a lot of people ( including my own family). I
would personally like to believe there is another way a more sustainable civilization could
be attained than on the heels of societal collapse. I do believe the world is full of
mystery, and that life itself is a series of unfolding miracles we lack the capacity to
comprehend due to our limited perspective. Yet perhaps you are right and some type of
collapse is inevitable before a new beginning can be made. If such be the case, as
individuals we will be compelled to tap into inner potentials that will needed to meet the
approaching apocalypse, potentials which currently lie dormant and undeveloped. Maybe in the
process of doing so we will recover our wholeness as well.
I think less then a century is more plausible forecast. The end of "plato oil" means the
crumbling of the USA centered neoliberal empire and nothing can prevent this.
Very interesting and candid testimony by an American that lived through the transition
period between the End of History era (1991-2008) and the Multipolar (?) Rise era
(2008-):
Contrary to my perception, he considers the Invasion of Iraq as the end of the End of History
era, and not the 2008 meltdown, as is my perception. Also interesting - which coincides with
my own perception - is that he saw the whole process as a disease that spread quickly among
the American people, i.e. it was a very quick process of descent. His metaphor of a virus,
pandemia or disease never crossed my mind: from my point of view - a person from the "rest of
the world" the metaphor that arose was that of a big house or big structure collapsing from
its base, but not completely: it still resembles the old structure, but it clearly isn't the
same as the old structure.
And, in fact, in the 1990s, me and the people I talked to in Latin America saw the USA as
definitely invincible. We could easily see it lasting forever, like if it really was the End
of History: the only debate left was if it was better to invest in a career in our native
countries or try to immigrate to the USA.
I remember talking to an American at the time (it was already the 21st Century, don't
remember the exact year), and, although he agreed that every empire ends, he said the USA
could take at least more 830 years to fall. Maybe his prophecy turns out to be true, maybe
the USA really pulls out another miracle like the one it pulled off in 1941-1945 - but it
certainly doesn't look like that right now, and there is solid evidence it won't ever recover
the status it enjoyed in 1992-2003.
No,vk @ 38, "America" didn't all turn bone mean on that horrible day. There were plenty of
people demonstrating against that illegal war; plenty writing letters, townships passing
resolutions against it. There was an ongoing protest movement worldwide as well. We all,
including young people, had a brief moment of sheer joy - I remember it vividly - when Obama
was elected. Because he was going to be the presider over change we could believe in, as was
his Democratic party - and they were elected overwhelmingly as the anti-Bush remedy.
He had the chance then and there, with the people behind him, to bring us all back to
peaceful times. He chose not to. And yes, that was a choice - only look at where he is now.
He chose money; he chose to be one of the rich guys. He was so shallow as to betray his own
chance to be one of the greats, and all so he could have millions and live like a king.
That's when the real rot, which had been festering under Clinton, though the Supreme Court
started the ball rolling in the election of 2000 -- oh yes -- that's when the real rot set
in.
You are interested in history. Get that straight. Those who were first time voters in 2008
weren't infected with any rabies. All they wanted was to stop that illegal rush to war, and
they campaigned their hearts out and they voted their hearts out and they cheered their
hearts out when he won.
Does productivity explain income? I asked this question in a
previous
post
. My answer was a bombastic
no
. In this post, I'll dig deeper into the reasons that
productivity doesn't explain income. I'll focus on wages.
The Evidence
Let's start with the evidence trumpeted as proof that productivity explains wages. Looking across firms, we
find that sales per worker correlates with average wages. Figure 1 shows this correlation for about 50,000 US
firms over the years 1950 to 2015.
Figure 1: The correlation between a firm's average wages and
its sales per worker.
Data comes from Compustat. To adjust for inflation, I've divided wages and sales
per worker by their respective averages (in the firm sample) in each year. I've shown stock tickers for select
firms.
Mainstream economists take this correlation as evidence that productivity explains wages. Sales, they say,
measure firms' output. So sales per worker indicates firms' labor productivity. Thus the evidence in Figure 1
indicates that productivity explains (much of) workers' income. Case closed.
The Problem
Yes, sales per worker correlates with average wages. No one disputes this fact. What I dispute is that this
correlation says anything about productivity. The problem is simple. Sales per worker
doesn't measure
productivity
.
To understand the problem, let's do some basic accounting. A firm's sales equal the unit price of the firm's
product times the quantity of this product:
Sales = Unit Price × Unit Quantity
Dividing both sides by the number of workers gives:
Sales per Worker = Unit Price × Unit Quantity per Worker
Let's unpack this equation. The 'unit quantity per worker' measures labor productivity. It tells us the
firm's output per worker. For instance, a farm might grow 10 tons of potatoes per worker. If another farm grows
15 tons of potatoes per worker, it unambiguously produces more potatoes per worker (assuming the potatoes are
the same).
The problem with using sales to measure productivity is that
prices
get in the way. Imagine that
two farms, Old McDonald's and Spuds-R-Us, both produce 10 tons of potatoes per worker. Next, imagine that Old
McDonald's sells their potatoes for $100 per ton. Spuds-R-Us, however, sells their potatoes for $200 per ton.
The result is that Spuds-R-Us has double the sales per worker as Old McDonald's. When we equate sales with
productivity, it appears that workers at Spuds-R-Us are twice as productive as workers at Old McDonald's. But
they're not. We've been fooled by prices.
The solution to this problem seems simple. Rather than use sales to measure output, we should measure a
firm's output
directly
. Count up what the firm produces, and that's its output. Problem solved.
So why don't economists measure output directly? Because the restrictions needed to do so are severe. In
fact, they're so severe that they're almost never met in the real world. Let's go through these restriction.
1: Firms must produce identical commodities
To objectively compare productivity, you have to find firms that produce the same commodity. You could, for
instance, compare the productivity of two farms that produce (the same) potatoes. But if the farms produce
different things, you're out of luck.
Here's why. When firms produce different commodities, we need a common dimension to compare their outputs.
The problem is that the choice of dimension affects our measure of output.
To see the problem, let's return to our two farms, Old McDonald's and Spuds-R-Us. Suppose that Spuds-R-Us
produces 10 tons of potatoes per worker. Tired of growing potatoes, Old McDonald's instead grows 5 tons of corn
per worker. Which workers are more productive?
The answer depends on our dimension of analysis.
Suppose we compare potatoes and corn using mass. We find that Spuds-R-Us workers (who produce 10 tons per
worker) are more productive than Old McDonald's workers (who produce 5 tons per worker).
Now suppose we compare potatoes and corn using energy. Furthermore, imagine that corn has twice the caloric
density of potatoes. Now we find that workers at Spuds-R-Us (who produce half the mass of food at twice the
caloric density) have the same labor productivity as Old McDonald's workers.
The lesson? Unless two firms produce the same commodity, productivity comparisons are subjective. They
depend on the choice of dimension.
Restriction 2: Firm output must be countable
When you read economic textbooks, it's clear that the discipline of economics is stuck in the 19th century.
Firms, the textbooks say, produce
stuff
.
But what about all those other firms that don't produce stuff? What is their output? What, for instance, is
the output of Goldman Sacks? What is the output of a high school? What is the output of a hospital? What is the
output of a legal firm?
Yes, these institutions do things. But it defies reason to give these activities a 'unit quantity'. In other
words, it defies reason to quantify the output of these institutions.
Restriction 3: Firms must produce a single commodity
Complicating things further, we can objectively measure output only when firms produce a single commodity.
If a firm produces two (or more) commodities, its output is affected by how we add the commodities together.
To see the problem, let's return to Old McDonald's and Spuds-R-Us. Suppose that both farms have diversified
their production. Spuds-R-Us produces 5 tons of potatoes and 1 ton of corn per worker. Old McDonald's produces
1 ton of potatoes and 5 tons of corn. Which workers are more productive?
The answer depends on our dimension of analysis. In terms of mass, both farms produce 6 tons of food per
worker. So labor productivity appears the same. But suppose we measure the output of energy. Again, we'll
assume that corn has double the caloric density of potatoes. Suppose corn contains 2 GJ (gigajoule) per ton,
while potatoes contain 1 GJ per ton. Now we find that Old McDonald's workers are about 60% more productive than
workers at Spuds-R-Us. Here's the calculation:
Spuds-R-Us:
5 tons potato × 1 GJ / ton + 1 ton corn × 2 GJ / ton = 7 GJ
Old McDonald's:
1 ton potato × 1 GJ / ton + 5 ton corn × 2 GJ / ton = 11 GJ
This 'aggregation problem' is why the neoclassical theory of income distribution assumes a single-commodity
world -- a world in which everyone produces and consumes the same thing. In this one-commodity world, we can
measure productivity unambiguously. In the real world (with many commodities) productivity depends on our
choice of dimension.
The Severity of the Problem
Let's take stock. If we want to measure productivity objectively, the restrictions are severe:
Firms must produce the same commodity
This commodity must be countable
Firms must produce only one commodity
These conditions are so stringent that they're rarely met in the real world. This is a bit of a problem for
neoclassical theory. It proposes that everyone's income is explained by their productivity. But only in the
rarest of circumstances can we measure productivity objectively.
It's hard not to laugh at this predicament. It's like Newton proclaiming that gravitational force is
proportional to mass. But in the next sentence he realizes that mass can be measured only in the rarest of
circumstances.
The Neoclassical Sleight of hand
Neoclassical economists don't think of themselves as Newtons who can't measure mass. Instead, economics
textbooks don't even mention the problems with measuring productivity. In these textbooks, all seems well in
neoclassical land.
But all is not well. Neoclassical economists perpetuate their fantasy by relying on a sleight of hand.
Here's what they do.
First, economists argue that the purpose of all economic activity is to give consumers
utility
. Buy
a potato and you get utility. Buy a cigarette and you get utility. Utility, economists say, is the universal
dimension of output. By measuring utility, we can compare the output of any and all firms (no matter what they
produce).
After proclaiming that utility is the universal dimension of output, economists pull their trick. Utility,
they say, is
revealed through prices
. So a painting worth $1000 gives the buyer 1000 times the utility
as a $1 potato.
With this thinking in hand, economists see that a firm's sales measure its output of utility:
Sales = Unit Price × Unit Quantity
Sales = Unit Utility × Unit Quantity = Gross Utility
So sales become a universal measure of utility, and utility is the universal measure of output. Now, when we
compare sales per worker to wages (as in Figure 1), economists proclaim that we're comparing productivity to
wages.
Except we're not.
The problem is that this whole operation is circular. The idea that prices reveal utility is a
hypothesis
.
And as every good scientist knows, you can't use your hypothesis to test your hypothesis. But that's what
neoclassical economists do. They assume that one aspect of their theory is true (the link between prices and
utility) to test another aspect of their theory (the link between productivity and income). This is a big no
no.
Why do economists use this circular reasoning? Probably because they don't know they're doing it. Economists
take as received wisdom the idea that prices reveal utility. But this is just a hypothesis. In fact, it's a bad
hypothesis. Why? Because we can never measure utility independently of prices.
Why are Sales Related to Wages
Whenever I go through the logic above, mainstream economists will retort: "But look at the correlation
between wages and sales! How can this not show that productivity explains wages?" Their reasoning seems to be
that, absent an alternative explanation, this correlation must support their hypothesis.
In
No,
Productivity Does Not Explain Income
, I gave an alternative explanation. The correlation between wages and
sales per worker, I argued, follows from accounting principles.
Sales isn't a measure of output. It's an
income
stream. Once earned, this income gets split by the
firm into different categories. Some of it goes to workers. Some of it goes to other firms (as non-labor
costs). And some of it goes to the firm's owners as profit.
Figure 2: Dividing a firm's income stream.
Accounting
principles dictate that a firm's sales get divided into profits and wages.
By
definition, the terms on the left must sum to the terms on the right. So it's not surprising that we find a
correlation between wages and sales. They're related by an accounting identity.
In comments on
No,
Productivity Does Not Explain Income
(and on other sites), some economists pounced on this argument, saying
it was fatally flawed. And in hindsight, I admit that I wasn't clear enough about my reasoning. I was thinking
about the real world. But the economists who critiqued my reasoning were thinking in terms of pure mathematics.
To frame the debate, let's think about something more concrete than income. Let's think about volume. In
rough terms, the volume of an object is the product of its length, width and height:
V = L × W × H
Now, let's pick a dimension -- say length. Will the length of an object correlate with its volume? In general
terms, no. I can make an object with any volume using any length. I just have to adjust the other dimensions
appropriately. By doing so, I can make a cube have the same volume as a box that is long and thin.
So in pure mathematical terms, the accounting definition of volume doesn't lead to a correlation between
length and volume.
But when we look at real-world objects -- like animals -- we
will
find a correlation. If we took all
the species on earth and plotted their length against their volume, we'd expect a tight correlation. A bacteria
has a small length and a small volume. A blue whale has a big length and a big volume. Fill in the gaps between
and we should get a nice tight line.
The reason for this correlation is that animals cannot take any shape. You'll never find an animal that is a
mile long and a few micrometers wide. Such a beast doesn't exist. Yes, the shapes of animals vary. But in the
grand scheme, this varation is small. As a first approximation, animals are roughly cubes. Or, if you're a
physicist,
they're
spheres
.
With this shape restriction, it follows from the definition of volume that animal length should correlate
with animal volume. We'd be astonished if it didn't.
So too with the correlation between sales per worker and wages. True, this correlation doesn't follow purely
from accounting principles. It follows jointly from accounting principles, and the fact that firms can't take
any form. We don't find firms that pay their workers nothing. That's slavery and its illegal. Similarly, we
don't find (many) firms that pay their workers the entirety of sales. That leaves no room for profit.
So in the real world, there are restrictions on how firms can divide their income stream. Here's what these
restrictions look like. In Figure 3, I've plotted the distribution of firms' payroll as a portion of sales.
This is the portion of sales that goes to workers. Across all firms, it's a pretty tight distribution,
clustered around 25%.
Figure 3: The distribution of firm payrolls as a fraction of
sales.
Data is for US firms in the Compustat database over the years 1950–2015.
Yes, it's theoretically possible for a firm to give any portion of its sales to workers. But this isn't what
happens in reality. In the real world, most firms give between 10% and 50% of their sales to workers. Just like
with the shape of animals, there are real-world restrictions on the 'shape' that firms can take.
Given these restrictions, it's not surprising that we find a correlation between sales per worker and wages.
When a firm's income stream grows, so does the amount going to workers.
None of this has anything to do with productivity. It's all about income. Sales are the firm's income. And
wages are the portion of this income given to workers.
Prices The Elephant in the Room
Let's conclude this foray into neoclassical thinking. The reason that sales don't measure firm output is
because they mix unit prices with unit quantities. Yes, sales per worker correlates with wages. But the
elephant in the room is prices. Greater sales may be due to greater output. But it can also be due to greater
unit prices.
In many cases, price differences are
everything
.
Imagine that a lawyer and a janitor both work 40 hours a week as self-employed contractors. The lawyer
charges $1000 per hour, while the janitor charges $20. At the end of the week, the lawyer has 50 times the
sales as the janitor. This difference comes down solely to price. The lawyer charges 50 times more for their
hourly services than the janitor.
The question is
why
?
Neoclassical economists proclaim they have the answer. The lawyer, they say, produces 50 times the utility
as the janitor. Ask economists how they know this, and they'll answer with a straight face: "Prices revealed
it."
It's time to recognize this sleight of hand for what it is: a farce. The reality is that we know virtually
nothing about what causes prices. And we will continue to know nothing as long as researchers believe the
neoclassical farce.
Further Reading
The Aggregation Problem: Implications for Ecological and Biophysical Economics.
BioPhysical Economics
and Resource Quality
. 4(1), 1-15.
SocArxiv
Preprint
.
Economists are always prepared for yesterday's problems.
Inflation was a big problem in the Keynesian era and every effort has been made to ensure that it doesn't
return.
Exceptionally intelligent Chinese economists have been looking at today's problems.
Davos 2018 – They know financial crises come from the private debt-to-GDP ratio and inflated asset prices
https://www.youtube.com/watch?v=1WOs6S0VrlA
The PBoC know how to spot a Minsky Moment coming, unlike the FED, BoE, ECB and BoJ.
The black swan flies in under our policymaker's radar.
Our policymakers are always looking in the wrong direction.
They fixate on public debt, and so don't see the problems emerging in private debt
The central banks look at consumer price inflation, while the problems are emerging in asset price inflation.
Your salesperson might negotiate higher prices on every deal, and that might correlate with their higher
productivity in a regulated and truly competitive market.
What does sales at higher prices in a (de facto) deregulated and increasingly monopolist market space
point to? Not to greater productivity, imo, but to deregulated monopoly. It too oftern points to unregulated
rentier-ism, or price gouging. Why has the cost of, say, insulin
tripled
over
the past decade? Not because of greater productivity. How can these price increases in this deregulated
market environment possibly point to real productivity? It points to price gouging. Since there is more
rentier-ism in the market, the old idea that prices/wages can be reliably equated with productivity becomes
meaningless, imo.
Do your other employees building widgets become "less productive" suddenly when your salesman catches a
cold? (You can come up with a bunch of these showing that productive can not be precisely equal to money
earned, because they exist on different time scales measuring different firm aggregates).
Is the salesman "more productive" if he kidnaps the children of a client and blackmails him into buying
more product? What would "productive" mean in any useful sense if there's no independent definition of
utility? Not every dollar earned is a measure of "productive" -- unless you redefine productive to mean
"every dollar earned by any measure".
When the US invaded Santo Domingo to extract debts, was that "productive" in any meaningful sense? That
would seem to be an abuse of language, rather than saying what you mean.
The problem here is that "productive" is a
moral
justification -- and so it must continue to mean
something more than simply money earned in order to morally justify the order. That's the goal of the use of
the word productive -- that thus the results are
just
.
"It's time to recognize this sleight of hand for what it is: a farce. The reality is that we know
virtually nothing about what causes prices. And we will continue to know nothing as long as researchers believe
the neoclassical farce."
This is what I don't understand, I think its obvious why there are prices. The whole idea of business, and
capitalism generally, is to charge as much as possible while spending as little as possible.
Beyond a certain point I do believe greed drives inflation -- companies will charge whatever they think they
can get away with long before there is wage pressure. Wage pressure in my experience is a reaction to
inflation, not a driver of it. For some reason many people of the conservative persuasion seem to get this
backwards.
Absolutely. The use of "we" here is problematic. What needs to be made clear is the fundamental
distinction between those who study capitalism, where the fundamental driver is the search for profit, and
those who study "the economy," for whom profit either doesn't exist or is the "marginal productivity of
capital," a concept which has been shown over and over to be nonsensical, and the fundamental drivers are
things we can't explain – individual wants and preferences and various completely unpredictable "shocks."
There is no collective "we." It's them against us.
It is obvious that prices are seriously out of kilter with actual value of products & services but is this a
result of all that extra money that was created to save the banks after 2008? And what about the vital function
of price discovery then. How does that work out? I do believe that there is something missing from this article
and that is a break-out of "wages". I suppose you could break it down to wages, salary & management which may
be more instructive. How does productivity relate to management then, both internally and externally? By
externally I mean when consultants are called into a company to do management's job. If you think that this
cannot be a serious concern, then reflect that the UK's NHS paid out between $350 million and $600 million
worth of taxpayer money on management consultancy in 2014 alone. What effect did that have on the NHS's
productivity then?
It sounds like the sure path to higher productivity is to encourage monopolies and oligopolies that can
raise prices pretty much at will while reducing the number of workers. The question becomes: why hasn't US
productivity surged as its markets became increasingly concentrated?
Blair Fix touches on an important issue behind the layers of terminology, concepts and policies that have so
impacted our everyday lives. So if labor productivity doesn't explain wages, income or prices, then what are
the true factors influencing prices and stagnant real wages?
Pricing power, labor cost, and profit margins of large transnational corporations have benefitted from their
increasingly monopolistic control of markets to suppress competition, use of global labor arbitrage, enjoyment
of very low and even negative real interest rates, tax policies and use of tax havens, hidden subsidies,
automation, neutering of organized labor, and purchased political influence. The productivity of labor in the
West has essentially been made irrelevant in many cases. Important stuff in so many ways.
Still appreciate the famous EPI chart that shows how the wealthy have captured the entire differential
between stagnant real wages and the rising productivity of labor since neoliberal capitalism made its
appearance on the world stage four decades ago. Trillions:
Hence 'private equity' is a euphemism for cannibalizing any source of equity for a quick profit. We have
an entire paradigm that is a farce. Based on value (equity) which in turn is based subjectively on whatever
you can snooker. It is one step forward and two steps backwards at this point. The Chinese have a beautiful
view of our debacle. No wonder they can tease out the contradictions. But it's not like we, places like NC,
haven't been screaming about all this loud and clear. (Steve Keen for starters.) The thing the aptly named
Mr. Fix is saying resides beneath the surface: If we are ever in so desperate a position to raise prices too
much nobody will buy and the system will collapse. And because of our horror-at-the-thought we have avoided
pricing oil where it belongs. Instead we have burned it with abandon, devastating the environment while we
were at it. A very expensive abandonment. It was an unrecognized consequence; an unavoidable one for the
sake of profit – whereas the other accounting anomalies are more "discretionary". When you are desperate
nothing is discretionary. If price ever comes to equal "utility" aka value, then there will be very little
commerce. It makes Richard Murphy's advocacy for Oil Bankruptcy a very rational suggestion. Mitigate the
devastation – that's about all we'll be able to do.
Even Adam Smith admitted that the economic value of something has no relation to its intrinsic utility, but
only to the relative balance of supply and demand for it.
If there are more workers than jobs, wages will be driven down and productivity gains will decouple from
wages – although with low wages, there will be little incentive to invest in making workers more productivity
so productivity may decline as a second-order effect.
If there are more jobs than workers, wages will be bid up, and productivity gains will be largely captured
by workers because it is the limiting factor in any economy that captures the profits. At the same time, high
wages will tend to spur higher productivity because there will be strong incentive to make efficient use of
relatively expensive labor.
At the base of Niagara Falls, water is cheap and it is not used efficiently. Using water efficiently in
Niagara Falls will not increase its price. In the Gobi desert, water is expensive and it is used efficiently.
Not using water efficiently in the Gobi desert will not make it cheaper.
The core of modern macroeconomics is to take what is fundamentally simple and confuse the heck out of it.
then what are the true factors influencing prices and stagnant real wages?
That would be the human factor. Greed, honesty, and desires and conscious acts. Economics cannot capture the
human factor.
Every human on Earth is capable of affecting markets dramatically by one act. Humans making multiple
decisions every day. All 7.5 billion. One person can change markets and history with one act. Gavrilo Princip,
for instance. Or by using an Internet post to affect markets.
To accurately model economics? All decisions made by each and every person on the planet would have to be an
input into any model. Each person's actions would have to have a solid, predictable outcome with no deviations.
A person becomes depressed, then A and B and C can ONLY happen.
Which would rule out occurrences such as Malaysia Flight 370 and quite a few other possibilities.
Economics and economists are in no way, shape, or form capable of accounting for the human factor. Which is
why there should be no laws of economics. More like, guesswork and observing trends in a general and gross
manner. Only to pray for accuracy.
LTCM was an example of economics and economists over-stepping their intellect. LTCM employed the
observations from John Nash (the subject of the move, A Beautiful Mind) and his Nobel prize winning work. Their
system worked until it didn't. Other humans made decisions that trashed.
People chose not to play the game. For LTCM? Such decisions by others outside of LTCM's control were fatal.
The issue with game theory, etc? For it to work, one has to have enforcers or project power to force people to
play by a set of rules. One could call this, the basis of American foreign policy – financial in nature.
The "Law of Supply and Demand"? Routinely violated. A person can decide arbitrarily to put items on sale.
The Human Factor.
Trends in economics are like trends on Twitter. You just never know. Economists are trend chasers. Having
more in common with Internet "influencers" trying to convince people that a $5 pair of shoes is actually worth
$400, than with actual science. THAT being an example of how prices are determined, in part.
Neoliberal economics is a case study of a select group (economists) influencing politicians and others, to
support their version of economics.
Economics and economists are in no way, shape, or form capable of accounting for the human factor.
Which is why there should be no laws of economics.
+1000
Great post DF! This whole discussion reminds me of the shortest job I ever had – selling crappy stereo
speakers out of the back of a white van for a day.
I'd answered an ad not knowing what I'd be getting into. The people who were "training" me would drive up
to an unsuspecting person in a mall parking lot and try to sell these speakers. They had a set dollar amount
per day there were supposed to sell to get a bonus, so if they could sell a speaker for $200 they would and
if at the end of the day they needed $25 to meet their sales quota, the last speaker would go for $25. The
whole thing depended on two very big human factors – greed and gullibility.
I'm sure an economist could come up with productivity figures for this operation, but what it really was
was a scam.
The job you describe reminds me of Eastern European bazaars back in the day where items being sold
"fell off" the back of a truck. Or Hoboken, NJ market on a certain block. :)
Thank you NC for yet another article exposing the sham of neoclassical economics. Here's a paragraph from a
book I happen to be reading yesterday
"..the neoclassical economic perspective is
the
ideology par excellence of capitalist political
economy. It is a theory that explains nothing more than how to assure that capitalism remains capitalism. That
is, neoclassical economics demonstrates how wealth and resources may continue to function to the advantage of
the minority that controls wealth and the immediate access to political power. It is an ideology because it
depicts as "rational" only economic behavior that seeks the "utility maximization" characteristic of market
exchange. That other motives and values might deserve priority in our action as economic agents is either
unthinkable (ruled out by definition) or, worse, held to be economically "irrational." Neoclassical economic
theory is itself a system of morality- and theology and ethics – masquerading as "science." Yet those who
dissent from this hidden morality have a difficult task before them. For this debate concerning the ethics of
economics is consistently suppressed in public discourse. Reigning economic theory makes calls for the
substantive realignment of existing economic power appear as madness. Dissenters are
by definition
"unrealistic," "utopian," or "irresponsible.""
And
this was written almost 30 years ago
in the book 'God and Capitalism – A Prophetic
Critique of Market Economy'. The excerpt is from chapter three – 'The "Fate" of the Middle Class in Late
Capitalism' by Beverly W. Harrison.
Can we please get an SEC or FASB ruling requiring the explicit breakout of salary payroll on the income
statement of EVERY public listed company?
Capitalism has ALL manner of enumeration of uses of capital, but nowhere is labor listed! I don't care for
labor hidden inside direct/indirect "costs of goods sold", "SG&A", "R&D" etc. Just put a payroll expense (minus
payroll taxes, minus the healthcare and whatnot, straight payroll) line item somewhere in the 10-k. Is it a
crime to ask?
Forgive me if this has been discussed previously. It's from a September Atlantic article on
economics I happened upon, a review of a book by Applebaum written by Sebastian Mallaby:
"...Applebaum opens his book with the observation that economics was not always the
imperial discipline. Roosevelt was delighted to consult lawyers such as Berle, but he
dismissed John Maynard Keynes as an impractical 'mathematician'. Regulatory agencies were
headed by lawyers, and courts dismissed economic evidence as irrelevant. In 1963, President
John F. Kennedy's Treasury secretary made a point of excluding academic economists from a
review of the international monetary order, deeming their advice useless. William McChesney
Martin, who presided over the Federal Reserve in the 1950s and '60s, confined economists to
the basement.
Starting in the l970s, however, economists began to wield extraordinary influence..."
I know all who are discussing financial matters here know this - it was just good for me
to see it spelled out. I see, however, the rest of the review is very economist oriented and
no mention of Michael Hudson whatsoever; it is, after all, the Atlantic. Yay for Roosevelt
and Kennedy though!
If you've ever wanted to understand what neoliberalism is, this is
the series for you.
Neoliberalism is an economic ideology that exists within the framework of capitalism. Over
four decades ago, neoliberalism become the dominant economic paradigm of global society.
In this video series, we'll trace the history of neoliberalism, starting with a survey of
neoliberal philosophy and research, a historical reconstruction of the movement pushing
for neoliberal policy solutions, witnessing the damage that neoliberalism did to its first
victims in the developing world, and then charting neoliberalism's infiltration of the
political systems of the United States and the United Kingdom. Learn how neoliberalism is
generating crises for humanity at an unprecedented rate.
Our "education" system has raised generations of useful idiots, unable to fight back
or even recognize the threat of the establishments breakaway civilization.
Good video. Reminded me of this bit I saved from Twitter some time ago:
"Probably
no man in history has had so little understanding of the workings of his own society
– and hence so little power to effect change – as liberal democratic man. We talk
about this with regard to capitalism – we're (supposedly) buffeted by impersonal and
unaccountable 'market forces' – but not with liberal democratic politics, although
it's fundamentally the same thing. Even if you could organize an angry mob, whose
residence would you march on? The serf knew, the slave knew. You do not. You have no
idea who your masters are or where they live. A 'liberal democracy' is a political
system where you have no idea who's in charge, no idea what they're planning, no
idea why they have the policies they have, and no idea of how to change any of it."
"free traders mistake money for wealth, wealth is derived from making things, money
is just a medium of exchange: any government that prints money with no regard to its
material basis in commodity production risks disaster."
"Whenever you hear the words "a country has to be competitive," it's not more
competition among businesses, it's that every country has to do whatever it can to
make available the closest thing to slave labor as possible. Period. No wishy-washy
jargon needed to cover the basic fact"
Excellent vid. Really puts it all together well. The Neoliberals are sucking as much
money and work out of us folks as they can get away with before they kill us all off
and use robots.
I love the content, just not the pacing. If you listen to most documentaries, you
will notice the is a pacing or cadence in the spoken narrative. Speak a little, then
give some time to absorb. This series would be a lot easier to listen to with some
added space... thanks. Look forward to this series.
"one of the main reasons why even sophisticated societies fall into this suicidal
spiral is the conflict between the short-term interests of decision-making elites
and the long-term interests of society as a whole, especially if the elites are able
to insulate themselves from the consequences of their actions. the reason why even
sophisticated societies fail is because the elites are never made to pay a price for
their follies"
What's not mentioned is this second phase of "liberalism" is the most dangerous
because we are more dependent on capitalist production than ever before. People
exist on a razors edge.
"All this is contrary to what classical economists urged. Their objective was for
governments elected by the population at large to receive and allocate the economic
surplus. Presumably this would have been to lower the cost of living and doing
business, provide a widening range of public services at subsidized prices or
freely, and sponsor a fair society in which nobody would receive special privileges
or hereditary rights. Financial sector advocates have sought to control democracies
by shifting tax policy and bank regulation out of the hands of elected
representatives to nominees from world's financial centers.
The aim of this planning
is not for the classical progressive objectives of mobilizing savings to increase
productivity and raise populations out of poverty.
The objective of finance
capitalism is not capital formation, but acquisition of rent-yielding privileges for
real estate, natural resources and monopolies. These are precisely the forms of
revenue that centuries of classical economists sought to tax away or minimize. By
allying itself with the rentier sectors and lobbying on their behalf – so as to
extract their rent as interest – banking and high finance have become part of the
economic overhead from which classical economists sought to free society.
The result
of moving into a symbiosis with real estate, mining, oil, other natural resources
and monopolies has been to financialize these sectors. As this has occurred, bank
lobbyists have urged that land be un-taxed so as to leave more rent (and other
natural resource rent) "free" to be paid as interest – while forcing governments to
tax labor and industry instead. To promote this tax shift and debt leveraging,
financial lobbyists have created a smokescreen of deception that depicts
financialization as helping economies grow. They accuse central bank monetizing of
budget deficits as being inherently inflationary – despite no evidence of this, and
despite the vast inflation of real estate prices and stock prices by predatory bank
credit.
Money creation is now monopolized by banks, which use this power to finance
the transfer of property – with the source of the quickest and largest fortunes
being infrastructure and natural resources pried out of the public domain of debtor
countries by a combination of political insider dealing and debt leverage – a merger
of kleptocracy with the world's financial centers. The financial strategy is capped
by creating international financial institutions (the International Monetary Fund,
European Central Bank) to bring pressure on debtor economies to take fiscal policy
out of the hands of elected parliaments and into those of institutions ruling on
behalf of bankers and bondholders. This global power has enabled finance to override
potentially debtor-friendly governments." Excerpt From Killing the Host Michael
Hudson
16:23
"Chile experienced a peaceful democratic rule for 41 years, that now has
violently come to an end. Pinochet and his followers described the coup as 'a war'.
It definitely looked that way. It was a Chilean example of 'instilling shock and
awe'. The days thereafter saw 13000 opposers arrested and locked up ." may be too
much of a literal translation but Dutch isn't my first language. (edited the time
stamp)
"... The problem with an unseen stimulus is that no one thinks it's helping them. Obama provided tax relief for nearly every working American, but instead of sending citizens a check, as George W. Bush had done, his economists decided to structure it as a payroll tax cut, subtly increasing the size of everyone's paycheck. The administration then intentionally did not advertise the fact that it had given nearly every working American a tax cut , in the hopes that people would be nudged into spending, rather than saving, that extra cash. Predictably, in 2010, one poll showed that only 12 percent of Americans believed they'd received a tax cut; 24 percent thought Obama had raised their taxes. ..."
"... A program that was supposed to help underwater homeowners turned down 70 percent of those applying for permanent loan modifications , even as over six million families lost their homes. The point of the program was never actually to help people stay in their homes, of course; it was to preserve the finance industry by spacing out foreclosures. In the end, it achieved its aim: The banks today are as profitable as ever, while more households are renting than in 50 years . ..."
"... The individual mandate, similarly designed to force the healthiest young invincibles to enter the market to bring down costs, is equally dead. And a decade into the ACA, it has become more apparent than ever that the best way to reduce America's absurd health care costs would simply be a single-payer program. ..."
"... The political scientist Suzanne Mettler coined the term "the submerged state" in 2010 to refer to the jungle of hidden government "programs" designed not to call attention to themselves, often perpetuated not because they are still helping the neediest, but because they are lucrative to the finance, insurance, and/or real estate industries. ..."
Welcome to The Decade From Hell , our look
back at an arbitrary 10-year period that began with a great outpouring of hope and ended in a cavalcade of despair.
As 2009 ended, the editors of this magazine at the time
took their measure of the first year of Barack Obama's
presidency and declared it, with some reservations, a modest success. "All of this might not exactly place him in the pantheon next
to Franklin Roosevelt," they said of his major domestic achievements (the stimulus package, primarily, as the Affordable Care Act
had not yet been signed). "But it's not a bad start, given all the constraints of the political system (and global order) in which
he works."
That was the broad consensus of American liberals at the time, ranging from nearly the most progressive to nearly the most neoliberal.
Over the ensuing years, that consensus would crack and eventually shatter under the weight of one disappointment after another. The
story of American politics over the past decade is that of a political party on the cusp of enduring power and world-historical social
reform, and how these once imaginable outcomes were methodically squandered.
The bulk of that unsigned New Republic editorial in 2009 was dedicated to Obama's foreign policy, specifically the question
of whether he was waging enough war. The conclusion: He was. The editors praised "the escalation of the war in Afghanistan" as "the
most consequential action of the first year of his presidency," even though it
offended the base of his party and possibly injured his future political prospects. On strategic grounds, we believe he made
the right choice. But the thoroughness and logic of the process by which he arrived at this decision double our confidence in
that choice. The is exactly the type of pragmatism and non-ideological policymaking that sentient humans have craved after the
Bush years.
(Sure, escalate the endless wars -- but for God's sake, please do it non-ideologically .)
In December of this year, The Washington Post
obtained thousands of pages of documents from a government oversight project called "Lessons Learned," which included interviews
with more than 600 people involved in the war in Afghanistan at some point over its 18-year history. An interview with a National
Security Council official described, according to the Post , "constant pressure from the Obama White House and Pentagon to
produce figures to show the troop surge of 2009 to 2011 was working, despite hard evidence to the contrary." Nearly every piece of
data used over the last decade to try to convince Americans that the war was going well, or even going according to any sort of coherent
logic or reason, was phony or meaningless.
"I don't want to be going to Walter Reed for another eight years," Obama
reportedly said in 2009 , as he struggled
with the decision to escalate the war. The president and his closest advisers were determined to avoid the mistakes of Vietnam. Since
then, overwhelmed by billions
in U.S. "aid," the country has sunk into kleptocracy. Last year, according to the United Nations, was the single deadliest year
of the war for Afghan civilians. Today, around 13,000 American service members remain in Afghanistan. The Trump administration is
attempting to negotiate a peace with the Taliban that would leave it in charge of the country, just as it was prior to America's
invasion. The war in Afghanistan may finally end, but not before the close of this decade that began with that oh-so-carefully considered
decision to escalate it.
"We Are All Socialists Now," Newsweek declared on its cover in early 2009, when
it was still part of the prestige press (it is currently run by
a different sort of cult ).
Editor Jon Meacham, evincing the usual historical and political amnesia of airport bookstore historians, justified the claim by writing
that "for the foreseeable future Americans will be more engaged with questions about how to manage a mixed economy than about whether
we should have one." A mixed economy run according to Keynesian principles was, you may recall from reading slightly more rigorous
historians, the primary alternative to socialism on offer in the West throughout the twentieth century. The stimulus had been
large (if not large
enough ), but with $288 billion of it dedicated to tax credits and incentives for individuals and businesses, it scarcely resembled
socialism. Indeed, rather than giving Americans a greater hand in managing the economy, much of it was designed to be almost invisible.
This was intentional. In the May 6, 2009, issue of The New Republic , Franklin Foer and Noam Scheiber
described Obama's "Nudge-ocracy," a belief, inspired
by behavioral economics, that the best way for the government to create good outcomes for the people was not through "heavy-handed
market interventions" but via technocratic attempts to change the behavior of individuals and the incentives of market actors.
The problem with an unseen stimulus is that no one thinks it's helping them. Obama provided tax relief for nearly every working
American, but instead of sending citizens a check, as George W. Bush had done, his economists decided to structure it as a payroll
tax cut, subtly increasing the size of everyone's paycheck. The administration then
intentionally did not advertise the fact that
it had given nearly every working American a tax cut , in the hopes that people would be nudged into spending, rather than saving,
that extra cash. Predictably, in 2010,
one poll showed
that only 12 percent of Americans believed they'd received a tax cut; 24 percent thought Obama had raised their taxes.
The flaw in this strategy was apparent to another author at this magazine. In late 2009, John B. Judis
foresaw a presidency in serious political trouble, because
Obama's fortunes were tied not just to the state of the economy, or even economic trends, but to people's perceptions of the
state of the economy. Noting how Roosevelt "dramatized the New Deal's contribution to the economy" by creating "colorful new agencies,"
thereby "ensuring that Roosevelt was given credit for the rise in employment," Judis called on Obama to "introduce programs that
provide jobs and capture the public's imagination." He also suggested the president
turn a deaf ear to those who are calling for fiscal responsibility. He should keep pouring money into jobs and into the pockets
of people who will spend until the unemployment rate begins going down and wages begin going up.... And, whatever he does to try
to mend the economy, Obama should never stop loudly trumpeting his efforts -- so that he is able to reap the credit when improvements
occur.
Roosevelt liked to wrestle his enemies in public, and Team Obama preferred to be above it all.
What Judis didn't consider, though, was that Obama didn't want to do any of those things. The president, along with economists
who worked for him such as Austan Goolsbee and Tim Geithner,
all pointedly rejected comparisons to
Roosevelt , based in part on a seemingly inaccurate understanding of the history of his first term but also seemingly based on
aesthetics: Roosevelt liked to wrestle his enemies in public, and Team Obama preferred to be above it all. It's hard to remember
now how wise everyone made it sound that the president and his team intentionally avoided doing things they worried would be too
popular, but there would not be another New Deal. Indeed, instead of ostentatious acts of helping people, the administration almost
preferred being seen standing athwart attempts to provide relief. A program that was supposed to help underwater homeowners
turned
down 70 percent of those applying for permanent loan modifications , even as over six million families lost their homes. The
point of the program was never actually to help people stay in their homes, of course; it was to
preserve the
finance industry by spacing out foreclosures. In the end, it achieved its aim: The banks today are as profitable as ever, while
more households are renting than in 50 years .
By far the most effective part of the Affordable Care Act, in terms of helping Americans get care, was simply expanding Medicaid.
But what many Democrats and liberals were most excited about was the bill's many experimental and technocratic attempts to "bend
the cost curve" -- reduce costs without price controls -- and "improve quality," mainly by encouraging insurers, with incentives,
to strive for outcomes that market forces alone weren't incentivizing them to aim for. The signature example of this may be the "Cadillac
tax," which was designed to nudge companies to force employees onto cheaper insurance plans with greater cost sharing -- a tax built
on the belief that one of the primary drivers of health care cost inflation was people taking advantage of their too-generous employers
and greedily consuming more health care than they needed. The tax never went into effect.
The individual mandate, similarly designed to force the healthiest
young invincibles to enter the market to bring down
costs, is equally dead. And a decade into the ACA, it has become more apparent than ever that the best way to reduce America's absurd
health care costs would simply be a single-payer program.
That is not to say that the ACA did not end up having the significant long-term political ramifications its drafters promised
it would. The primary non-Medicaid structure of the ACA, with its means-tested subsidies to purchase private insurance, had the predictable
effect of convincing some of its beneficiaries
that Obama and the Democratic Party had nothing to do with the government assistance they weren't sure they were getting. Then, as
costs rose and rose over the decade, that structure also
had the predictable effect of making people
who receive partially subsidized private care resentful of those poor enough to qualify for Medicaid.
Much of the decade we have just endured has shown how the Democratic addiction to dispensing benefits through the tax code in
complicated, indirect ways -- combined with the usual insufficiency of these benefits -- was nearly perfectly designed to foment
mass resentment of others, imagined or not, who might secretly be getting the Good Benefits.
The political scientist Suzanne Mettler coined the term "the submerged state" in 2010 to refer to the jungle of hidden government
"programs" designed not to call attention to themselves, often perpetuated not because they are still helping the neediest, but because
they are lucrative to the finance, insurance, and/or real estate industries.
One of her illustrations
of the effect of the submerged state is a graph showing how many people who used particular government programs admitted so only
after first telling researchers they'd received no assistance. That nearly 40 percent of people on Medicare claimed this is likely
attributable to ideology (and the fact that Medicare, like Social Security, was designed to make retirees feel like they had "paid
into it").
But when 60 percent of people who used tax-advantaged higher education savings accounts claim they received no government benefits,
as they did in Mettler's study, it's probably because tax-advantaged savings accounts are wholly inadequate to the problem of higher
education costs. Now combine this with a persistent belief (memorably
described by Ashley C. Ford a few years ago) that minorities -- black kids in particular -- get to go to college for free by
default, and stir in the rise of tuition costs and other expenses due to cutbacks in state investment in education. The result of
this cocktail of ignorant biases and inadequate solutions might look something like the year 2019.
The new US defense bill, agreed on by both parties, includes sanctions on executives of companies involved in the completion
of Nordstream 2. This is companies involved in laying the remaining pipe, and also companies involved in the infrastructure around
the arrival point.
This could include arrest of the executives of those companies, who might travel to the United States. One of the companies
is Royal Dutch Shell, who have 80,000 employees in the United States.
Some people believe 'the market' for crude oil is a fair and effective arbiter of the industry supply and demand.
But if we step back an inch or two, we all can see it has been a severely broken mechanism during this up phase in oil.
For example, there has been long lags between market signals of shortage or surplus.
Disruptive policies and mechanisms such as tariffs, embargo's, and sanctions, trade bloc quotas, military coups and popular revolutions,
socialist agendas, industry lobbying, multinational corporate McCarthyism, and massively obese debt financing, are all examples
of forces that have trumped an efficient and transparent oil market.
And yet, the problems with the oil market during this time of upslope will look placid in retrospect, as we enter the time beyond
peak.
I see no reason why it won't turn into a mad chaotic scramble.
We had a small hint of what this can look like in the last mid-century. The USA responded to military expansionism of Japan by
enacting an oil embargo against them. The response was Pearl Harbor. This is just one example of many.
How long before Iran lashes out in response to their restricted access to the market?
People generally don't respond very calmly to involuntary restriction on food, or energy, or access to the markets for these things.
The
Economics Debate, again and again The debate on the economics profession – its
alleged ills and failings -- abates at times, but never ends. A recent
piece in The Guardian taking the profession to task for its lack of reform has prompted a
response from a group of economists. I thought it was time to re-up my own views on this
debate, in the form of two sets of ten commandments. The first set is directed at economists,
and the second to non-economists.
Ten commandments for economists
1. Economics is a collection of models; cherish their diversity.
2. It's a model, not the model.
3. Make your model simple enough to isolate specific causes and how they
work, but not so simple that it leaves out key interactions among causes.
4. Unrealistic assumptions are OK; unrealistic critical assumptions
are not OK.
5. The world is (almost) always second-best.
6. To map a model to the real world you need explicit empirical
diagnostics, which is more craft than science.
7. Do not confuse agreement among economists for certainty about how the
world works.
8. It's OK to say "I don't know" when asked about the economy or
policy.
9. Efficiency is not everything.
10. Substituting your values for the public's is an abuse of your
expertise.
Ten commandments for non-economists
1. Economics is a collection of models with no predetermined conclusions;
reject any arguments otherwise.
2. Do not criticize an economist's model because of its assumptions; ask
how the results would change if certain problematic assumptions were more realistic.
3. Analysis requires simplicity; beware of incoherence that passes itself
off as complexity.
4. Do not let math scare you; economists use math not because they are
smart, but because they are not smart enough.
5. When an economist makes a recommendation, ask what makes him/her sure
the underlying model applies to the case at hand.
6. When an economist uses the term "economic welfare," ask what s/he means
by it.
7. Beware that an economist may speak differently in public than in the
seminar room.
8. Economists don't (all) worship markets, but they know better how they
work than you do.
9. If you think all economists think alike, attend one of their
seminars.
10. If you think economists are especially rude to non-economists, attend
one of their seminars.
I have spent enough time around non-economists to know that their criticism often misses the
mark. In particular, many non-economists tend not to understand the value of parsimonious
modeling (especially of the mathematical kind). Their typical riposte is: "but it is more
complicated than that." It is of course. But without abstraction from detail, there cannot be
any useful analysis.
Economists, on the other hand, are very good at modeling but not so good at navigating among
their models. In particular, they often confuse a model, for the model. A big
part of the problem is that the implicit scientific method to which they subscribe is one in
which they are constantly striving to achieve the "best" model.
Macroeconomists are particularly bad at this, which accounts in part for their dismal
performance. In macroeconomics, there is too much of "is the right model the classical or the
Keynesian one" (and their variants), and too little of "how do we know whether it is the
Keynesian or the classical model that is the most relevant and applicable at this point in time
in this particular context."
"... Since 2001, America has increasingly turned global economic and financial networks into weapons that can be used against adversaries. As we showed in earlier research, financial networks such as the "dollar clearing system" and the SWIFT messaging service, which provide foundations for the global financial system, have been used by the United States to gather intelligence and to isolate entire economies, such as Iran, from the global financial system. ..."
"... As we discuss in a new article in Foreign Affairs , other countries are beginning to think about how they can best respond: by threatening retaliation, by creating their own networks, or by insulating themselves from U.S. pressure. ..."
"America weaponized the global financial system. Now other states are fighting back." [
WaPo ].
" Since 2001, America has increasingly turned global economic and financial networks
into weapons that can be used against adversaries. As we showed in earlier research, financial
networks such as the "dollar clearing system" and the SWIFT messaging service, which provide
foundations for the global financial system, have been used by the United States to gather
intelligence and to isolate entire economies, such as Iran, from the global financial
system.
Control of these networks allows the United States to issue "secondary sanctions" against
countries, businesses or individuals that it wants to target, obliging non-U.S. actors to
adhere to the sanctions or risk substantial penalties.
Now, these tools are leading to backlash and reaction. As we discuss in a new
article in Foreign Affairs , other countries are beginning to think about how they can best
respond: by threatening retaliation, by creating their own networks, or by insulating
themselves from U.S. pressure.
"... By Bill Black, the author of The Best Way to Rob a Bank is to Own One, an associate professor of economics and law at the University of Missouri-Kansas City, and co-founder of Bank Whistleblowers United. Originally published at New Economic Perspectives ..."
Posted on
December 18, 2019 by Yves Smith Yves here. What Black calls
the New Democrats have more recently been called Blue Dogs and even (gah) frontliners, but
whatever you want to call them, they are corporate stooges loyal to bad economic ideas, most
notably deficit hawkery and austerity.
By Bill Black, the author of The Best Way to Rob a Bank is to Own One, an associate
professor of economics and law at the University of Missouri-Kansas City, and co-founder of
Bank Whistleblowers United. Originally published at
New Economic Perspectives
On December 5, 2019, Lawrence O'Donnell made an impassioned attack on Pete Buttigieg on his
" The
Last Word " program on MSNBC. Buttigieg's statements criticizing the Democratic Party as
historically soft on deficits enraged O'Donnell. The context was Buttigieg's effort to signal
to New Hampshire voters that he was the most conservative Democratic candidate for the
presidential nomination. Nothing signals 'responsible' so well to 'New Democrats' and the media
as a candidate screaming 'deficits' in a crowded meeting room in a small New Hampshire
town.
O'Donnell correctly pointed out that Buttigieg's claims about Democrats and deficits are
'Republican lies.' The truth is that New Democrats have been the only group in America
dedicated to inflicting austerity on our Nation. Republicans only pretend to care about
deficits when Democrats have power. Buttigieg knows this, but his political interests in
portraying himself as a stalwart emerging leader of the New Democrats caused him to position
himself (falsely) as unique among New Democrats in his dedication to inflict austerity.
O'Donnell (largely) correctly pointed out that New Democrats had been fighting federal
deficits for Buttigieg's entire life. O'Donnell stressed the New Democrats actions in 1993,
when Buttigieg was eleven. O'Donnell lauded the New Democrats for pushing austerity even when
they knew doing so was likely to cause Democrats to lose elections.
O'Donnell's dominant message, measured by both length and passion, was the crippling price
the Democrats paid for the New Democrats' pushing for austerity in 1993. He made clear it was
not a "one-off" – Democrats paid that price again when President Obama, a self-described
New Democrat, pushed to inflict austerity on the Nation in 2010.
O'Donnell describes the New Democrats (Bill Clinton and Al Gore) as knowingly taking a
"grave political risk" in 1993 in voting in favor of austerity. The risk was that Democrats,
not simply New Democrats, would lose scores of seats – and control of the House and
Senate. O'Donnell stressed that no Republicans voted for the New Democrat's 1993 austerity
program. O'Donnell explained the initial political results of austerity. "The Democrats lost
the House because of that vote for the first time in 40 years." He then explained they also
lost the Senate.
O'Donnell repeatedly explained that the New Democrats knew that their decision to inflict
austerity on Americans would likely produce this political disaster – and "bravely" did
so because of their belief that inflicting austerity on Americans was essential. He noted that
he "watched with pride" this exercise of political suicide.
O'Donnell then cited President Obama's austerity efforts – during the weak recovery
from the Great Financial Crisis (GFC). At a time when the need to provide stimulus, not inflict
austerity, was obvious, Obama embraced what again proved the politically suicidal option.
As fate would have it, the death of Paul Volcker days after O'Donnell's takedown of
Buttigieg extended O'Donnell's argument further back in time – to before Buttigieg's
birth. In 1979, President Carter (a Democrat) appointed Volcker to Chair the Federal Reserve.
Volcker soon unleashed powerful monetary austerity, raising interest rates to unprecedented
levels for the United States. Volcker's obituary stressed
the politically suicidal nature of inflicting austerity – and the Democrats' pride in
knowingly losing elections because of their embrace of it.
The harsh Fed policy no doubt contributed to Mr. Carter's re-election defeat at the hands
of Ronald Reagan; he had to campaign when interest rates were at their peak, and before the
inflation fever had begun to break. Mr. Carter, in his memoirs, would offer a typically
understated assessment: "Our trepidation about Volcker's appointment was later
justified."
***
"Paul was as stubborn as he was tall," Mr. Carter said in a statement on Monday morning,
"and although some of his policies as Fed chairman were politically costly, they were the
right thing to do.
O'Donnell's denunciation of Buttigieg for adopting dishonest Republican talking points about
Democrats and deficits did not discuss several essential points. The first two points emerge
from answering this question: what was the cost to the Nation – not the loss of
Democratic seats – of the New Democrats' intransigent insistence on inflicting austerity?
Shakespeare explained famously that "mercy" was "twice blest," because it blesses both the
giver and the receiver. The quality of austerity, however, is typically at least thrice damned.
It is not a "gentle rain from heaven," but a sandstorm from hell that batters the public and
punishes the politicians who unleash the whirlwind. It is at least thrice damned because it
causes three grave forms of harm on the public.
Inflicting austerity on the United States government has three likely consequences for the
public. It is likely to cause or extend a recession. It forces Democrats into an unending
series of "Sophie's choice[s]s." We cannot adopt any new program of consequence without budget
'scoring' – requiring new taxes or cutting other vital federal programs. Under austerity,
Democrats must shrink existing overall federal spending. By extending existing recessions or
leading to new ones, austerity causes economic harms that increase social and political
breakdowns that can lead to the election of fanatics and corrupt fake-populists. The political
parties that refuse to inflict austerity (at least when they are in power) will be the
political winners.
Republican fiscal policies combine "wedge" offerings to fire up the worst of their base and
massive tax breaks for the elites that fund their campaigns – leading to a recurrent
cycle in which the New Democrats champion policies that cause the public to identify Democrats
as the party most likely to raise taxes and cut vital federal programs. Republican political
power and 'wedge' legislation and policies cause enormous harm, particularly to the poor and
minorities. The larger the Republican deficits, the greater the New Democrats' urgency to
inflict austerity – and embrace political suicide. It is a self-reinforcing cycle
producing recurrent political disaster for Democrats.
O'Donnell does not address two other critical points. First, MSNBC's top commentators
endlessly warn Democrats that they must nominate the presidential candidate most likely to
defeat President Trump. MSNBC's commentators implore us not to focus on policy differences
among the candidates. Their message is relentless realpolitik, particularly, you should never
vote for the candidate whose policies you believe are far superior to the candidate the MSNBC
commentators think is most electable. MSNBC and the New Democrats claim they share the same
prime directive – Democratic Party electoral victories are the only imperative.
O'Donnell's anti-Buttigieg rant reveals the truth about MSNBC and the New Democrats' real
prime directive – inflicting austerity even when doing so is economically irrational and
politically suicidal is their sole imperative. The obvious questions, which O'Donnell never
asked or attempted to answer, are why he and his MSNBC colleagues push the false prime
directive (winning must be the sole paramount goal) as gospel while praising the New Democrats
for repeatedly causing the Democratic Party to commit political suicide through inflicting
austerity on our Nation. Logically, the only possible answer to that question is that O'Donnell
and the New Democrats must view inflicting austerity as being of transcendent importance. It
outweighs everything. Inflicting austerity is the New Democrats and MSNBC's sole prime
directive. They are not simply willing to lose so many contests that they lose control of the
presidency, the House, and the Senate – they are "proud" to do so when the reason for
those losses is 'we committed political suicide to fight to inflict austerity.' The related
questions are whether MSNBC and the New Democrats are actually blind to the contradiction
between the real and phony prime directives and why they think viewers and voters will be too
dumb to spot the obvious contradiction. Why do New Democrats and MSNBC insist on hiding their
real prime directive?
A related question arises from this bizarre prime directive to inflict austerity even when
it is politically suicidal. Why did New Democrats and MSNBC choose inflicting austerity as
their holy grail? What is it about inflicting austerity that makes New Democrats so "proud" to
cause the Democratic Party to commit political suicide and deliver control of the House,
Senate, and Presidency to the likes of Ronald Reagan, Newt Gingrich, Mitch McConnell, and
Donald Trump? Preventing Bush's invasion of Iraq, global climate disruption, and Trump's
election would all make sense as overriding priorities. Those are things worthy of losing a
House seat or even the entire House.
Inflicting austerity typically harms America and our people. A federal budget deficit is not
bad. A federal budget surplus is not good. Clinton and Gore's budget surpluses were not good
for America. They were likely harmful, as recessions soon followed our prior budget surpluses
throughout our history. In each of the cases O'Donnell lauded, the New Democrats' insistence on
inflicting austerity did not simply prove politically suicidal for the Democratic Party –
austerity was a terrible economic policy that caused harm. How did inflicting austerity become
the overriding priority of New Democrats, swamping all other policies? In 1993, when Clinton
and Gore made O'Donnell "proud" by inflicting austerity, the inflation rate was three percent.
That rate of inflation was trivially higher than what the Fed would adopt as its inflation
target (2%) – the preferred rate of inflation. Even under neoclassical economic nostrums,
there was no need, much less a compelling need, to inflict austerity.
In 2010, when Obama first sought to inflict austerity on us, the rate of inflation was 2.3
percent and the unemployment rate was 9.6 percent. The economic illiteracy of his austerity
horrified even neoclassical economists. Fortunately, the Tea Party Republicans pushed so
aggressively in the "Grand Bargain" negotiations with Obama that the tentative deal he reached
with congressional Republicans collapsed. Otherwise, Obama's infliction of austerity would have
ended the already weak recovery, plunged the Nation back into a Great Recession, and caused him
and scores of congressional Democrats to lose their elections in 2012.
O'Donnell's presentation, implicitly, makes it clear that he thinks austerity is so
obviously desirable, and the budget deficits of a fully sovereign nation so obviously the
gravest conceivable threat that he need provide neither logic nor evidence to support the New
Democrat's politically suicidal and economically illiterate austerity prime directive.
O'Donnell's cheerleading for the austerity prime directive was never supported, but it has
become facially indefensible over the last quarter-century. Trump's tax reduction scheme for
the wealthiest was outrageous on multiple grounds, but O'Donnell can observe the present
unemployment and inflation rates. Unemployment is at 3.5% and the inflation rate for 2018 was
1.9% -- less than the Fed's target rate. Inflation is the only logical bugaboo about federal
budget deficits, so O'Donnell and Buttigieg's feverish fear that federal deficits are about to
cause a catastrophe is beyond bizarre. The bond markets confirm that there is no expectation of
material inflation.
The New Democrats remain transfixed by their 'virtue' and 'bravery' in losing control of all
three branches of government by insisting on inflicting economically illiterate and politically
suicidal austerity assaults on the voters – raising taxes and cutting vital services.
They refuse to act on the real emergencies we face such as global climate disruption based on
the economically illiterate fantasy that 'we cannot afford' to prevent the worsening
catastrophe. The 'New Democrats' and their media enablers demand that we nominate candidates
dedicated to enacting politically suicidal deficit hysteria policies and adopting tepid
anti-environment policies that are suicidal towards the lives of our children and
grandchildren. The most remarkable aspect of this insanity, however, is that the hucksters
pitch their embrace of their prime directive as defining the concept of "responsible." Indeed,
it is so obviously 'responsible' that O'Donnell and Buttigieg feel neither logic nor facts are
necessary to prove the virtues of austerity. They omit the fact that austerity proponents'
warnings and promises have repeatedly proved false and outright harmful as well as politically
suicidal.
Could it be that the New Democrats are not stupid or irrational at all but know what they
are doing and happily play their role in the permanent professional wrestling spectacle as
the hapless patsies who keep losing to the real tough guy? After all, they get paid
handsomely in any case.
Not only did President Carter appoint Volcker, but he also vetoed a bill to raise the
national debt ceiling. Thankfully Congress, run by a very different set of Democrats at the
time, over-rode his veto.
"Austerity" is basically the only policy Team Blue has undertaken without outside
pressure. As bad as it is, it's the one thing they can point to over the last 25 years as
something they did without mass mobilization or court cases embarrassing them into not being
totally heinous.
Then little Mayo Pete is trying to deny Team Blue their only accomplishment.
The geographic maps of recent Western elections, look remarkably similar across the world.
Brexit, Kurz, Trump, Bolsonaro, Duterte, Khan, Salvini & Di Maio as well as the rise of
the AfD in Germany all evidence a strikingly similar pattern.
Urban centers are trying to hold on to the status quo for dear life.
The rest of the country that could be defined as the (usually) silent majority, has had
enough.
This vote was no surprise.
We have reached one of those historical junctures that are brought about by the same old
political tactics.
A centralized monetary system that is coopted for political power.
Fiscal deficits have a very well defined, if not understood, life cycle. The end of the
cycle has been the same across the ages.
Many more "surprising" political outcomes to come in the following months.
As Dean Baker pointed out in his book Rigged, the neoliberal capitalism of America is
rigged to benefit the top 1%. After all, they were the architects. Most Americans appreciate
that. Nevertheless, the vast majority willingly wade into its rigged quicksand. All economies
are rigged in the sense that there is a structure to it all. Moreover, the architects of that
system will ensure there is something in it for themselves – rigged. Our school system
does not instruct Americans on how their own economic system works (is rigged), so most of us
become its victims rather than its beneficiaries.
Books by Liz Warren and her daughter offer remedial guidance on how to make the current US
economic system work for the average household. So, in a sense, Liz comes across as an
adherent to the system she is trying to help others master .
This seems to be a losing proposition for candidate Warren because most Americans want a
new system with new rigging; not a repaired system that has been screwing them for
generations.
By Anat R. Admati, the George G.C. Parker Professor of Finance and Economics at Stanford University Graduate School of Business
(GSB), a Director of the GSB Corporations and Society Initiative, and a senior fellow at Stanford Institute for Economic Policy Research.
Originally published at
ProMarket
Author's note: This essay is based on a speech I gave at the
Stigler Center 2019 Conference on Political Economy of Finance. Whereas the content refers to my experiences as an academic with
expertise in finance and economics, the key ideas apply to other areas in business schools and beyond. I hope colleagues will reflect
on the harm from silos and on our opportunities as academics to benefit society.
In the real world, it turned out, important economic outcomes are often the consequences of political forces. During 2010, people
within regulatory bodies told me privately that false and misleading claims were affecting key policy decisions. They urged me to
help clarify the issues and I felt compelled to become involved. Despite years of
research and advocacy , however, flawed
claims persist and still have an impact. (A recently
updated document lists and debunks 34 such claims.)
Many of my experiences in the last decade, which involved extensive interactions outside as well as within academia, were sobering.
I saw confusion, willful blindness , political
forces, various and sometimes subtle forms of corruption, and
moral disengagement
, first hand. The harm from economists ignoring political economy became increasingly evident. There was no way for me to return
to ignoring the issues.
It was also impossible to explain my experiences using economics alone. In writing an essay in 2016 for a book on Finance in
a Just Society edited by a philosopher, I went beyond economics and finance and drew from scholarship in political science, law,
sociology, and social psychology. My essay was entitled " It
Takes a Village to Maintain a Dangerous Financial System ."
Sadly, among the enablers of our inefficient and distorted financial system are economists and academics. Perhaps most shocking,
a fallacious claim about the impact and "cost" of more equity funding, which contradicts basic teachings in corporate finance, has
been included in many versions and editions of banking textbooks authored by prominent academic and former Federal Reserve governor
Frederic Mishkin. (See Section 3.3
here or Chapter 8 of The Bankers' New Clothes .)A risk manager
in one of the largest banks, whom I met in 2016 at a conference attended almost exclusively by practitioners and regulators and who
had dropped out of a top doctoral program in finance, quipped in an email after quoting from an academic paper: "with such friends
[as academics], who needs lobbyists?"
Lobbyists, who engage in "marketing" ideas to policymakers and to the public, are actually influential. They know how to work
the system and can dismiss, take out of context, misquote, misuse, or promote research as needed. If policymakers or the public are
unable or unwilling to evaluate the claims people make, lobbyists and others can create confusion and promote misleading narratives
if it benefits them. In the real political economy, good ideas and worthy research can fail to gain traction while bad ideas and
flawed research can succeed and have an impact.
Luigi Zingales highlighted political economy issues within our profession in a 2013 essay entitled "
Preventing
Economists' Capture " and in his 2015
AFA presidential address entitled "
Does Finance Benefit Society
?" Zingales notes and laments a pro-business and pro-finance bias within economics and finance and the pervasive blindness to
issues such as corporate fraud and political forces. "Awareness of the risk of [economists'] capture is the first line of defense,"
he writes in his 2013 essay. I agree that the issues are real yet often denied or ignored, and that recognizing problems is essential
for addressing them.
Governance and political economy challenges are pervasive beyond banking, where I encountered them so clearly. For example, corporate
governance research, including my own coauthored papers (in
1994 and
2009 ) on shareholder activism, has focused almost exclusively on conflicts between shareholders and managers, effectively assuming
that competitive markets, contracts, and laws protect everyone except for the narrowly-defined "shareholder" -- who is implicitly
assumed to own only one corporation's shares and to care only about the price of those shares.
Having observed governance and policy failures in banking, I realized that the focus on shareholder-manager conflicts is far too
narrow and often misses the most important problems. We must also worry about the governance of the institutions that create and
enforce the rules for all. How power structures and information asymmetries play out within and between institutions in the private
and public sectors is critical.
A 2017 Journal of Economic Perspectives Symposium on the modern corporation includes
an essay I wrote on the distortions that arise
as a result of the focus in corporate governance on financialized targets that purport to capture "shareholder value" when combined
with political economy forces that can lead to governments failing to set and enforce proper rules. The symposium also includes
an essay by Luigi Zingales on how political
and market power feed off each other. We both noted that more public awareness and understanding of these problems is essential for
addressing them.
Economists and academics have numerous opportunities to be helpful by looking more frequently out of their windows, expanding
their domain beyond "solved political problems," collaborating across disciplines, and bringing back a more holistic approach to
their work. Small changes in this direction are starting to happen, as the Stigler Center's conferences on the political economy
of finance show, but we can and should do much more.
Numerous research topics are ripe for more study by theorists and empiricists. Within the following long list of topics (still
a partial one) there are low-hanging fruits and more challenging problems that may require interdisciplinary reach and which tenured
academics are in a particularly privileged position to take on: whistleblower policies, the impact of consumers, employees, and politicians
on corporate actions, accounting rules for derivatives, the effectiveness of boards, audits and auditors regulation, the design of
bankruptcy laws, money laundering, corporate fraud, the organization and pricing of deposit insurance, debt subsidies, the role of
financial literacy and ideology in policy discussions, the structure and governance of regulatory agencies and central banks, lobbying
of multinational corporations, the governance of international bodies such as Financial Stability Board, Basel Committee, and IMF,
and the political economy of corporate enforcement.
Anat Admati. Photo by Nancy Rothstein
Engaging with policy issues in our research and teaching, and even engaging in
advocacy when appropriate and effectively lobbying on behalf
of the public (for example by writing
comment letters or
opinion pieces ) can be valuable and important. Policy
involvement, however, requires not only disclosing
potential conflicts of interest but, most importantly, scrutinizing research carefully to ensure it is adequate for guiding policy.
A problem I have become acutely aware of is that economists and others can be cavalier in claiming that research is relevant for
real-world application without such scrutiny.
As a theorist, I know models have unrealistic and sometimes stylized assumptions, yet models can bring important insights, and
theoretical and empirical papers that capture key features of the real world can be useful for policy. It takes a big leap of faith,
however, and can actually do more harm than good, to claim that models whose assumptions greatly distort the real world are adequate
for real-world applications. Specific examples are discussed in the
first paper I wrote with Peter DeMarzo,
Martin Hellwig, and Paul Pfleiderer (Sections 5-7), the
omitted chapter from the book I wrote with Martin Hellwig, Paul Pfleiderer's
paper on the misuse of models in finance
and economics (which starts with the old joke about the economist assuming a can opener on a deserted island and, among other things,
compares economics and physics) and a recent
presentation by Paul Pfleiderer that discusses the role of assumptions in theoretical and empirical research and which includes
great visuals.
The key takeaways if research is claimed to be relevant for the real world are:
Just because a model claims to "explain" something in the real world does not give it logical or actual validity . Even if
we may never have the data to be able to reject a model, there are ways to apply casual empiricism ("if this model was true, we would
observe x and we don't"), and we must be especially careful if a model contradicts other plausible explanations for what we see.
(Consider: "cigarette smoking improves people's health" as an "explanation" of why people smoke.) Just because a model can be
"calibrated" does not give it logical or actual validity .
Applying inadequate economic models to policy in the real world is akin to building bridges using flawed engineering models. Serious
harm may follow.
We can also enrich our teaching and connect more dots for our students by
developing interdisciplinary courses and by bringing out
the bigger picture, at least occasionally, in teaching standard courses. For example, basic corporate finance courses show how to
calculate the debt tax shield, and we should point out that there is no good reason for the tax code to subsidize debt relative to
equity and that this tax code can create distortions. We can also ask whether shareholders as individuals actually want a company
in which they hold shares to pursue "
positive Net Present Value
" projects that involve pollution or deceptive marketing of harmful products.
Many students are anxious to have such discussions. There is a broad sense today that standard business practices and dysfunctional
governments have exacerbated economic, social, and political problems. We must find ways to broaden the discussion beyond our narrow
lanes. Academic silos are part of the problem, and we should break them to be part of the solution.
Finally, we can and should engage in trying to ensure that governments and other institutions serve society. If only conflicted
experts engage in the process of creating rules, especially on important issues that appear technical and confusing such as accounting
standards or financial regulation, we get what Karthik Ramanna calls "
thin political markets " and
our assumptions about markets are more likely to be false. Academics may be in the best position to inform policy, expose flawed
or poorly enforced rules, and help hold power to account. We cannot assume others will be able or willing to do it without our help.
Governance and politics are key to outcomes everywhere. Related issues about power and control and about the respective roles
of governments and private sector institutions are playing out prominently today in the technology sector. A course I
taught recently about
the internet allowed me to compare and contrast the finance and internet sectors. The Stigler Center has laudably been informing
policy related to digital platforms .
In a recent Harvard
Business Review piece, I argue that business schools should practice and promote "civic-minded leadership" much more than
they currently do. (The text is also available
here .) I hope more academics and academic institutions recognize and embrace the great opportunities we have to try to make
the world a better place.
Does anyone know of a good book (or series of books) that discusses the history and evolution of economics. Ideally, I'm looking
for something that discusses particular political philosophers (e.g Adam Smith, Marx, Keynes, Mises, etc.) in sequence. What I'm
interested in is not only their ideas, but also their histories–what were the circumstances of their lives that lead to their
ideas and how did the political environment they found themselves in contribute. Also, how were the philosophies adopted or corrupted
by followers (e.g. Marx and Russian communism, Adam Smith and neoliberalism). I have yet to find a truly comprehensive book that
has this info. I would expect a title something like "History of Political Economy." Any suggestions from the NC commentariate?
So far I haven't found one book that covers it all. And most books I do find try to describe all economic thought in terms
of the author's particular belief system, which to me isn't all that helpful. So I read a lot of books on history, economics,
and archeology to try and piece together an accurate story. And I still have not read nearly enough to have a complete picture.
If I was much smarter I'd try to do it on my own. Sadly, I'm only mildly intelligent and a crappy writer. Somebody get Michael
Hudson on this so I can read it. I'll start the Kickstarter campaign.
It's much like religion in that introspection and study is generally confined to the walled-garden-containing-all-that-is-true-in-this-world
of choice.
This question intrigued me enough to explore what the Library of Congress catalog has to offer in response to it. The short
answer, based on a good deal of rather fancy searching, is not much -- in English. The subject heading, "Economics–History," is
the one that LC applies to the history of economics as a discipline. However, it retrieves so many citations as to be all but
useless, even when those results are sorted chronologically, because it has been applied to so many works that treat narrow rather
than broad sub-topics. LC has numerous books sharing the straightforward title, History of Economic Thought; they range in date
from 1911 on. The oldest is by Lewis F. Haney. The latest of them seems to be the 2nd "updated" edition of History of Economic
Thought, by E. K. Hunt (2002).
The Library of Congress has also established the subject heading "Political economy–history." However,
it is attached to only one title that covers the topic broadly: Histoire de la pensée économique : abrégé des analyses et
des théories économiques des origines au XXe siècle / Alain Redslob (2011). Despite characterizing itself as a 'summary' the
book comes in at a hefty 355 pages. LC classifies this work at HB75. A title search on "Political Economy" yields, to my eye,
only one somewhat recent work that seems to offer a general treatment: Political economy / Dan Usher (2003). Coming in at 427
pages, it is classified as "Economics" and classed at HB171.5. LC applies the heading 'Economics–Historiography" to eleven works
of which the most relevant here may be: History and historians of political economy / Werner Stark ; edited by Charles M.A. Clark
(1994). As a check of those results a bit of googling turned up a set of essays edited by Maxine Berg under the title, Political
Economy in the Twentieth Century (1990), which set out to represent thinking outside the 'mainstream' of neoclassical or Keynesian
traditions. LC classes it at HB87.
For books titled "History of Political Economy" it looks like one would have to go back into
the 19th century, to discover works bearing just such a title by John K. Ingram (1888; reprinted 2013 by Cambridge UP) and Gustav
Cohn (1894), thus apparently from the point where the Berg essays begin. I have read nothing by any of the authors I've mentioned
here; am just posting the outcome of my searching fwiw.
I have, but haven't yet finished, "An Economist's Guide to Economic History" by Blum and Colvin. If the text itself is insufficient,
the bibliography ought to be pretty comprehensive.
Yes Galbraith Sr was the last classical that pointed out the failings of the payed for PR merchants that some have called economists
and to rub salt in that wound claim dominate economics has no value based biases.
Richard Wolff (of Democracy at Work) has one but I'm not able to search for the title. Just google/qwant his name and a title
that you will recognize as what you are looking for will appear.
I've skimmed that book and it seemed accessible and neatly putting together timelines and major inflection points in the development
or economics.
"In the real world, it turned out, important economic outcomes are often the consequences of political forces."
Sorry to sound mean, but, duh.
"The key takeaways if research is claimed to be relevant for the real world are:
Just because a model claims to "explain" something in the real world does not give it logical or actual validity. Even if we
may never have the data to be able to reject a model, there are ways to apply casual empiricism ("if this model was true, we would
observe x and we don't"), and we must be especially careful if a model contradicts other plausible explanations for what we see.
(Consider: "cigarette smoking improves people's health" as an "explanation" of why people smoke.)"
Did the individuals she is addressing ever take a required undergraduate course in research methods?
Not understanding that is like believing that money does actually grow on trees. I don't understand how this could be
a revelation to supposedly intelligent people with advanced degrees.
You've got Evonomic's newsletter sign-up text box, copy-pasted in here, along with the article text. Guessing that wasn't intentional.
Mentioning it just in case.
This has "Academics may be in the best position to inform policy, expose flawed or poorly enforced rules, and help hold power
to account. We cannot assume others will be able or willing to do it without our help."
Given the funding method for much of academics (wealthy patrons, wealthy think tanks, wealthy companies and wealthy parents)
is it reasonable to expect that academics will truly speak truth to power?
In my view, the article implies a more vigilant economic profession COULD be important in influencing policy.
But I have doubts this could occur.
Economics and economists may be used in the same way that an insurance company executive told me that outside consultants were
sometimes chosen at his firm.
He suggested that consultants were sometimes selected because they were expected to agree with what management wanted to do.
One could suggest that similar dynamics exist for newspaper editorial writers.
If editorial writers were to go counter to their expected editorial content (right or left), they could well be expecting their
future paychecks would be at risk.
Western economics has evolved to serve TPTB, not the common good.
One can see that outside voices, such as Steve Keen and Michael Hudson, are relegated to outside the mainstream.
And on top of that, as Nassim Nicholas Taleb and others have regularly pointed out, achieving a high degree of efficiency
typically comes at the expense of safety.
An old Star Trek episode titled The Trouble With Tribbles is about Star Fleet and Klingons disputing ownership of a planet
which can grow vast amounts of food grains. In one short scene the Klingons claim ownership based on their more efficient exploitation
of resources (more efficient than the Federation) which, they claim, gives them 'rights' to own the planet. To which either McCoy
or Kirk say to themselves, "Oh yes, they're efficient all right. Ruthless, but efficient."
And on top of that, as Nassim Nicholas Taleb and others have regularly pointed out, achieving a high degree of efficiency
typically comes at the expense of safety.
No system ever operates at a greater efficiency than at the moment before its collapse.
Just something to think about, Capitalism rewarding efficiency rather than sustainability or robustness. Both of these require
the expenditure of resources, costs, which subtract from potential profits.
Yes, exactly. I liked this piece, long overdue for me. But what exactly is "efficiency"? I agree that there is no good reason
for the tax code to subsidize debt if, if, adequate financing is otherwise available. Hence the question: Why is there no alternative?
I dunno about small changes but I'm pretty sure we need to be able to downshift, as opposed to spinning out disastrously. There's
this too: finance itself (because financial time is much faster than ordinary time) is more desperate, even frantic, to maintain
its survival in a competitive "economy" so that as finance turns into financialization it achieves critical mass. And in order
just to hang on and not explode requires massive infusions of new money just so finance can stay on top of their own monster.
Some rodeo. The first good regulation for economic security might be to extend financial time – reducing the necessity for huge
turnover profits. But doing so in a way that preserves finance in a tame and domestic manner. Like preventing all the animals
in the barn from eating exponential volumes of alfalfa and producing mud slides of manure in order that the noble farmer doesn't
lose his tennies whilst mucking . Thereby reducing the risks inherent in equity finding – which for a sole proprietor (should
any still exist) is also known as crushing debt.
> The first good regulation for economic security might be to extend financial time – reducing the necessity for huge turnover
profits.
In ecology there is a tau function, the delay time. Predator population lags prey variation and can stabilize systems. And
Theo Compernelle gives details about delaying response time, as the productivity of a work session drops with the number of interruptions.
The Oct 28 Links included the article "Asynchronous Communication: The Real Reason Remote Workers Are More Productive", along
similar lines.
This seems to go against instant messaging, hi frequency trading, and OODA loops. But those seem to operate best in disregulated
situations. To extend financial time – what would that do to speculation?
Edit: Also, Taleb had something on taking data points too often leading to noisy results.
tau function seems to apply here. so as not to eat the seed corn. by extending financial time I meant slow it way down, in
my mind that means extending obligations over a much longer period. That might also mean many fewer financings, less opportunity
to speculate. tau is interesting; nice to know nature has this one figured out.
speculation is the "money" in financial markets. lenghten time=0 opportunity=0liquidity
on the other hand maybe another LTCM can be avoided.
pet theory, financial markets and all their attendend complexity exist to abosrb blasting high energy, innovation to assure survival,nutjob
i know
I'm thinking that one possibility would be money that expires after a set amount of time. Say one year. Money could not then
be used as an asset. It would have to be continuously and reliably spent. All assets would be physical. For one thing, we would
know what society really possessed, as opposed to the imaginary stuff/asset money is.
When I was a little boy, obsessing over Christmas presents, it seemed to me that politics was economics and that economics
was about the extraction of resources from the earth, and from human beings, with all kinds of shenanigans about timing.
No matter how much I learn, it seems that not much has changed.
Thank you for this post! Political economics is a much better name for this pseudo science. If aerospace engineers were wrong
as often as theses clowns airplanes would routinely fall out of the air.
And as Boeing so aptly demonstrates, putting the MBA PMC types in charge of the engineers, also results in airplanes falling
out of the air.
But huge props to Steve Keen for calling this out!
Paul Samuelson and Milton Friedman took the "animal spirits" out of economics and turned it into a mathematical model. However,
the behavioral economics and psychological research has shown that people are hard-wired in ways that make the mathematical models
flawed and erroneous.
As a design engineer, we use lots of complex modeling but ultimately our design blueprints and specifications are not rigidly
based on these models because people and/or robots have to build and operate the things. So there is a fair amount of simplification
and clarification that has to happen to have something built without major errors and then operated without major errors, as well
as maintained with varying levels of attention and funding. These require a fair amount of understanding about how humans process
and execute things and/or the limitations on what can be programmed into robots and computers.
I point out to junior engineers that the people who will build and operate the systems did not necessarily graduate in the
top 25% of their high school class unlike the designers. However, many of them have different skill sets that the designers don't
have, such as how to operate heavy equipment and do physical trade activities. So we need to design systems to a common denominator
that work from design and operations viewpoints.
In economics, we are seeing the systems being biased by focusing on theoretical models that don't actually work in practice
because they don't account for what people actually do compared to what a "rational" model says they should do. Hence the crap
about "trickle-down" that never actually works in practice in tax cut plans for the wealthy. Similarly, complex private healthcare
systems in the US don't remotely follow a "perfect information" model that would allow the "invisible hand" to produce efficiency.
so we get massive bloat and rentiere models that prey on consumers. However, that has become a feature, not a bug, on K-street.
Thank you X 10. Samuelson and Friedman claimed they could take the "animal spirits", aka human nature however defined, out
of economics. The claim amounts to saying they could measure, quantify, model, and manipulate human responses to changing situations,
which amounts to a claim of god-like understanding of human mental capacities. How do they measure a human? Reason and logic and
measurable outputs are only a part – and how large a part is as yet undetermined – in human awareness and decision making. Logic
is a good servant but a bad master, as the saying goes. Samuelson and Friedman construct a 'rational man' without ever questioning
the epistemology of their construct. (Mary Shelly might recognize the conceit.)
Michael Hudson is perhaps the best place to start. (Bill Black is a close second. Author of "The Best Way to Rob a Bank is
to Own One.")
Really, if one's education includes a healthy dose of history, anthropology, sociology, politics, and social theory, it's tempting
to suggest that economics is a self-important and smug discipline. Wow, politics affects markets, property relations, and conflict
over economic surplus! Wow. Good to know. And someone just told me that human beings aren't as rational as economists assume.
Wow again. Thanks.
I get the question often, though one would think it's obvious - Who are these "globalists"
we refer to so much in the liberty movement? Sometimes the request comes from honest people who
only want to learn more. Sometimes it comes from disinformation agents attempting to mire
discussion on the issue with assertions that the globalists "don't exist". The answer to the
question can be simple and complex at the same time. In order to understand who the globalists
are, we first have to understand what they want.
We talk a lot about the "globalists" because frankly, their agenda has become more open than
ever in the past ten years. There was a time not long ago when the idea of the existence of
"globalists" was widely considered "conspiracy theory". There was a time when organizations
like the Bilderberg Group did not officially exist and the mainstream media rarely ever
reported on them. There was a time when the agenda for one world economy and a one world
government was highly secretive and mentioned only in whispers in the mainstream. And, anyone
who tried to expose this information to the public was called a "tinfoil hat wearing
lunatic".
Today, the mainstream media writes puff-pieces about the Bilderberg Group and even jokes
about their secrecy. When members of Donald Trump's cabinet, Mike Pompeo and Jared Kushner,
attended Bilderberg in 2019, the mainstream media was wallpapered with
the news .
When the World Government Summit meets each year in Dubai, attended by many of the same
people that attend Bilderberg as well as shady mainstream icons and gatekeepers like Elon Musk
and Neil deGrasse Tyson, they don't hide their discussions or their goals, they post them on
YouTube .
I remember when talking about the US dollar being dethroned and replaced with a new one
world currency system and a cashless society controlled
by the IMF was treated as bizarre theory. Now it's
openly called for by numerous leaders in
the financial industry and in
economic governance . The claim that these things are "conspiracy theory" no longer holds
up anymore. In reality, the people who made such accusations a few years ago now look like
idiots as the establishment floods the media with information and propaganda promoting
everything the liberty movement has been warning about.
The argument on whether or not a globalist agenda "exists" is OVER. The liberty movement and
the alternative media won that debate, and through our efforts we have even forced the
establishment into admitting the existence of some of their plans for a completely centralized
global system managed by them. Now, the argument has changed. The mainstream doesn't really
deny anymore that the globalists exist; they talk about whether or not the globalist agenda is
a good thing or a bad thing.
First , I would point out the sheer level of deception and disinformation used by the
globalists over the past several decades. This deceptions is designed to maneuver the public
towards accepting a one world economy and eventually one world governance . If you have to
lie consistently to people about your ideology in order to get them to support it, then there
must be something very wrong with your ideology.
Second , the establishment may be going public with their plans for globalization, but
they aren't being honest about the consequences for the average person. And, there are many
misconceptions out there, even in the liberty movement, about what exactly these people
want.
So, we need to construct a list of globalist desires vs globalist lies in order to define
who we are dealing with. These are the beliefs and arguments of your run-of-the-mill
globalist:
Centralization
A globalist believes everything must be centralized, from finance to money to social
access to production to government. They argue that centralization makes the system "more
fair" for everyone, but in reality they desire a system in which they have total control over
every aspect of life. Globalists, more than anything, want to dominate and micro-manage every
detail of civilization and socially engineer humanity in the image they prefer.
One
World Currency System And Cashless Society
As an extension of centralization, globalists want a single currency system for the world.
Not only this, but they want it digitized and easy to track. Meaning, a cashless society in
which every act of trade by every person can be watched and scrutinized. If trade is no
longer private, preparation for rebellion becomes rather difficult. When all resources can be
manged and restricted to a high degree at the local level, rebellion would become unthinkable
because the system becomes the parent and provider and the source of life. A one world
currency and cashless system would be the bedrock of one world governance. You cannot have
one without the other.
One World Government
Globalists want to erase all national borders and sovereignty and create a single elite
bureaucracy, a one world empire in which they are the "philosopher kings" as described in
Plato's Republic.
As Richard N. Gardner, former deputy assistant Secretary of State for International
Organizations under Kennedy and Johnson, and a member of the Trilateral Commission, wrote in
the April, 1974 issue of the Council on Foreign Relation's (CFR) journal Foreign Affairs (pg.
558) in an article titled
'The Hard Road To World Order' :
" In short, the 'house of world order' will have to be built from the bottom up rather
than from the top down. It will look like a great 'booming, buzzing confusion,' to use
William James' famous description of reality, but an end run around national sovereignty,
eroding it piece by piece, will accomplish much more than the old-fashioned frontal
assault."
This system would be highly inbred, though they may continue to give the masses the
illusion of public participation and "democracy" for a time. Ultimately, the globalists
desire a faceless and unaccountable round table government, a seat of power which acts as an
institution with limited liability, much like a corporation, and run in the same sociopathic
manner without legitimate public oversight. In the globalist world, there will be no redress
of grievances.
Sustainability As Religion
Globalists often use the word "sustainability" in their white papers and agendas, from
Agenda 21 to Agenda 2030. Environmentalism is the facade they employ to guilt the population
into supporting global governance, among other things. As I noted in my recent article
'Why Is The Elitist Establishment So Obsessed With Meat' , fake environmentalism and
fraudulent global warming "science" is being exploited by globalists to demand control over
everything from how much electricity you can use in your home, to how many children you can
have, to how much our society is allowed to manufacture or produce, to what you are allowed
to eat.
The so-called carbon pollution threat, perhaps the biggest scam in history, is a key
component of the globalist agenda. As the globalist organization The Club Of Rome, a
sub-institution attached to the United Nations, stated in their book 'The First Global
Revolution' :
" In searching for a common enemy against whom we can unite, we came up with the idea
that pollution, the threat of global warming, water shortages, famine and the like, would
fit the bill. In their totality and their interactions these phenomena do constitute a
common threat which must be confronted by everyone together. But in designating these
dangers as the enemy, we fall into the trap, which we have already warned readers about,
namely mistaking symptoms for causes. All these dangers are caused by human intervention in
natural processes. and it is only through changed attitudes and behaviour that they can be
overcome. The real enemy then is humanity itself."
In other words, by presenting human beings as a species as the great danger, the
globalists hope to convince humanity to sublimate itself before the mother earth goddess and
beg to be kept in line. And, as the self designated "guardians" of the Earth, the elites
become the high priests of the new religion of sustainability. They and they alone would
determine who is a loyal servant and who is a heretic. Carbon pollution becomes the new
"original sin"; everyone is a sinner against the Earth, for everyone breaths and uses
resources, and we must all do our part to appease the Earth by sacrificing as much as
possible, even ourselves.
The elites don't believe in this farce, they created it. The sustainability cult is merely
a weapon to be used to dominate mass psychology and make the populace more
malleable.
Population Control
Globalists come from an ideological background which worships eugenics – the belief
that genetics must be controlled and regulated, and those people they deem to be undesirables
must be sterilized or exterminated.
The modern eugenics movement was launched by
the Rockefeller Foundation in the early 1900's in America , and was treated a a
legitimate scientific endeavor for decades. Eugenics was taught in schools and even
celebrated at the World's Fair. States like California that adopted eugenics legislation
forcefully sterilized tens of thousands of people and denied thousands of marriage
certificates based on genetics. The system was transferred to Germany in the 1930's were it
gained world renown for its inherent brutality.
This ideology holds that
4% or less of the population is genetically worthy of leadership, and the elites
conveniently assert that they represent part of that genetic purity.
After WWII the public developed a distaste for the idea of eugenics and population
control, but under the guise of environmentalism the agenda is making a comeback, as
population reduction in the name of "saving the Earth" is in the
mainstream media once again . The Question then arises - Who gets to decide who lives and
who dies? Who gets to decide who is never born? And, how will they come to their decisions?
No doubt a modern form of eugenics will be presented as the "science" used to "fairly"
determine the content of the population if the elites get their way.
Narcissistic
Sociopathy
It is interesting that the globalists used to present the 4% leadership argument in their
eugenics publications, because 4% of the population is also consistent with the number of
people who have
inherent sociopathy or narcissistic sociopathy , either in latent or full-blown form,
with 1% of
people identified as full blown psychopaths and the rest as latent. Coincidence?
The behavior of the globalists is consistent with the common diagnosis of full-blown
narcopaths, a condition which is believed to be inborn and incurable. Narcopaths
(pyschopaths) are devoid of empathy and are often self obsessed. They suffer from delusions
of grandeur and see themselves as "gods" among men. They believe other lowly people are tools
to be used for their pleasure or to further their ascendance to godhood. They lie incessantly
as a survival mechanism and are good at determining what people want to hear. Narcopaths feel
no compassion towards those they harm or murder, yet crave attention and adoration from the
same people they see as inferior. More than anything, they seek the power to micro-manage the
lives of everyone around them and to feed off those people like a parasite feeds off a host
victim.
Luciferianism
It is often argued by skeptics that psychopaths cannot organize cohesively, because such
organizations would self destruct. These people simply don't know what they're talking about.
Psychopaths throughout history organize ALL THE TIME, from tyrannical governments to
organized crime and religious cults. The globalists have their own binding ideologies and
methods for organization. One method is to ensure benefits to those who serve the group (as
well as punishments for those who stray). Predators often work together as long as there is
ample prey. Another method is the use of religious or ideological superiority; making
adherents feel like they are part of an exclusive and chosen few destined for greatness.
This is a highly complicated issue which requires its own essay to examine in full. I
believe I did this effectively in my article
'Luciferians: A Secular Look At A Destructive Globalist Belief System' . Needless to say,
this agenda is NOT one that globalists are willing to admit to openly very often, but I have
outlined extensive evidence that luciferianism is indeed the underlying globalist cult
religion. It is essentially an ideology which promotes moral relativism, the worship of the
self and the attainment of godhood by any means necessary – which fits perfectly with
globalism and globalist behavior.
So, now that we know the various agendas and identifiers of globalists, we can now ask "Who
are the globalists?"
The answer is – ANYONE who promotes the above agendas, related arguments, or any
corporate or political leader who works directly with them. This
includes presidents that claim to be anti-globalist while also filling their cabinets with
people from globalist organizations.
To make a list of names is simple; merely study the membership rosters of globalists
organizations like the Bilderberg Group, the Council On Foreign Relations, the Trilateral
Commission, Tavistock Institute, the IMF, the BIS, World Bank, the UN, etc. You will find a
broad range of people from every nation and every ethnicity ALL sharing one goal – A
world in which the future for every other person is dictated by them for all time; a world in
which freedom is a memory and individual choice is a commodity only they have the right to
enjoy.
* * *
If you would like to support the work that Alt-Market does while also receiving content on
advanced tactics for defeating the globalist agenda, subscribe to our exclusive newsletter The
Wild Bunch Dispatch . Learn more about it
HERE .
"... Although he didn't mean it the way it sounds, the economist Milton Friedman once said, "we are all Keynesians now," and in a way it has turned out to be close to true: Since World War II, Friedman and his fellow residents of the wealthy part of the world have almost all been Keynesians at some point. But they have never all been the same kind of Keynesians. ..."
"... There is, of course, the Keynesianism long associated with the welfare-state policies Friedman spent his career trying to discredit. It's not clear what Keynes would have made of the permanence of the welfare state's massive institutional infrastructure. ( The General Theory would suggest it is not what he had in mind: "public works even of doubtful utility may pay for themselves over and over again at a time of severe unemployment but they may become a more doubtful proposition as a state of full employment is approached.") Nevertheless, Keynes definitely believed that in a "slump," coordinated state action -- especially low interest rates and employment supports if necessary -- was the answer. ..."
"... But there has also always been what could be called a "right-Keynesian" way of doing economics and economic policy. Indeed, although the welfare state is commonly thought of as the victory of left-wing economic policy, during its heyday it was actually tied to a way of economic thinking that was in no way anti-capitalist. The Keynesian economics that ruled the disciplinary and policy roost in the postwar Golden Age -- and justified its welfare-oriented institutions such as public housing or collective bargaining -- was absolutely not left-wing and certainly did not understand itself as such. ..."
"... Perhaps the seminal moment in the emergence of this division is the controversy over the so-called IS-LM model of the macroeconomy. ..."
"... At its simplest, Hicks' model says that economic output (including levels of employment) will be determined by the intersection of two curves ("schedules"): one that describes the range of possible relationships between investment demand and the supply of savings (investment-saving, or IS, which we can basically think of as the "real" economy), and another that describes the range of possible relationships between the demand for and supply of money (liquidity preference-money supply, or LM, essentially the financial side of the economy). The model is almost perfectly intuitive: macroeconomic equilibrium is the point at which conditions in the "real" economy intersect with credit conditions in the money markets. There is no reason to expect the level of output at this point to involve full employment. ..."
"... Hicks's IS-LM model is the first step in what has since been labeled the "neoclassical synthesis," the marriage of Keynesian intuition and classical equilibrium analysis. ..."
"... Much of this work was done in Cambridge, Massachusetts, especially at the Massachusetts Institute of Technology, where Krugman and Stiglitz were trained. Across the Atlantic at the other Cambridge, however -- Keynes's University of Cambridge -- many of Keynes's students and colleagues saw the neoclassical synthesis as a step backward, the dilution or even betrayal of Keynes's contribution. Led by Joan Robinson, among the most brilliant and creative economists of the 20th century, the basis of a more critical Keynesianism -- what we now call "post-Keynesianism" -- took shape. Robinson, never one to mince words, labeled the neoclassical synthesis "bastard Keynesianism," an ad hoc mix of cherry-picked bits of The General Theory and classical arrogance. ..."
"... For Robinson and those who follow in her footsteps, the suppression of fundamental uncertainty in the neoclassical synthesis is among the most egregious of its many errors. IS-LM, and the menu of fine-tuning policy choices it seemed to provide, took economics back to the realm of abstraction and away from Keynes's insistence on an economics for "the kind of system in which we actually live." It dismissed true uncertainty and replaced it with a set of equilibrium points, none of which was really uncertain insofar as it was mechanically determined by the dynamics of the model. Hyman Minsky (whose financial instability hypothesis helped a lot of people understand Lehman Brothers' collapse) called it "Hamlet without the prince." ..."
"... Some degree of rapprochement between the Keynesianisms was perhaps always a possibility, because Keynesianism, whatever its stripes, has always been about addressing a crisis, actual or potential. Keynes wrote The General Theory in the 1930s in the shadow of growing social disorder, and insurgent fascisms and radical socialisms, not to mention collapsing empires. ..."
ARGUMENT Socialism's Biggest Hero Is
a Bourgeois British Capitalist John Maynard Keynes felt little solidarity for workers and inspired a century of establishment
economics. The West's revived socialists have adopted him as their own anyway. , 9:52 AM
If John Maynard Keynes came back to life today, more than 70 years after his death at the end of World War II, he would probably
be surprised by much of the economics and policy that gets called "Keynesian." He might also be surprised to find that, at least
in the English-speaking world, his name is usually associated with the left end of the political spectrum.
This would not have been his experience. With the 1936 publication of his The General Theory of Employment, Interest and Money
-- probably the most influential work of economics written in the 20th century -- there were certainly dedicated free-traders
who denounced his assault on laissez faire, but committed socialists immediately attacked him as capital's wily messiah, and they
continue to do so. His economics, they said, was merely the sugar-coating that allowed the working class to swallow the capitalist
pill. The accusation isn't entirely unfair. Keynes did famously claim that "the Class war will find me on the side of the educated
bourgeoisie."
Keynes did famously claim that "the Class war will find me on the side of the educated bourgeoisie."
Revolution, he said, "is out of date."
At the same time, of course, many of those who identify as progressives have long championed Keynes and Keynesianism, and Keynesian
economics is now crucial to the social-democratic revival. Activists may not be chanting his name in the streets, and it's safe to
assume that left reading groups are still more likely to parse Karl Marx. But however hesitant he might have felt about it, Keynes
is now firmly at the center of the progressive imagination. There are many thinkers pushing the left beyond orthodox neoclassical
economics -- but the most prominent are Keynesians.
This change in Keynes's status isn't just a straightforward case of misreading by one side or the other. It's the product of an
ambiguity at the heart of Keynes's own thinking that leaves a great deal of room for political maneuver. So much, in fact, that some
of the more heated postwar battles in economics have been between schools of self-identified Keynesians: critics of capitalism who
think Keynesian economics can make a bad system less cruel, and proponents of capitalism who think it can make a good system work
better. Although they share a common enemy -- the market fundamentalism of the Chicago school of economics -- they have usually existed
in a state of bitter disagreement. Temporary reprieves happen for one reason: crisis. In an emergency, Keynesianism seems both to
have a better chance of addressing contemporary challenges than economic business-as-usual, and to be a lot more politically plausible
than some of the more radical programs the left has on offer. As the Nobel-winning Chicago economist Robert Lucas put it, "everyone
is a Keynesian in a foxhole."
The recent financial crisis is a lesson in how true that can turn out to be. Even among some whose faith in the self-regulating
market had seemed unshakeable only a few months before, including more than a few of Lucas's colleagues in mainstream economics,
the foxhole of 2007 and 2008 reanimated Keynesian ideas and policy shockingly quickly. As the Wall Street Journal announced at the time, Keynes was "The New Old Big
Thing in Economics." This return to Keynes, however brief, only makes Keynesianism's status all the more complicated. Although virtually
always associated with the left, it is neither entirely welcome on the left nor entirely unwelcome on the right. This goes some way
to explaining both how a bourgeois post-Edwardian economist could end up essential to much of the economic thinking of the Euro-American
left, and how readily many supposedly orthodox economists and free-market businesspeople became Keynesians in the subprime foxhole.
Although he didn't mean it the way it sounds, the economist Milton Friedman once said, "we are all Keynesians now," and in a way
it has turned out to be close to true: Since World War II, Friedman and his fellow residents of the wealthy part of the world have
almost all been Keynesians at some point. But they have never all been the same kind of Keynesians.
There is, of course, the Keynesianism long associated with the welfare-state policies Friedman spent his career trying to discredit.
It's not clear what Keynes would have made of the permanence of the welfare state's massive institutional infrastructure. ( The
General Theory would suggest it is not what he had in mind: "public works even of doubtful utility may pay for themselves over
and over again at a time of severe unemployment but they may become a more doubtful proposition as a state of full employment is
approached.") Nevertheless, Keynes definitely believed that in a "slump," coordinated state action -- especially low interest rates
and employment supports if necessary -- was the answer.
He met with U.S. President Franklin D. Roosevelt in the 1930s and encouraged him to use federal resources to fight the Depression
(although it is not at all clear what, if any, aspects of Roosevelt's New Deal were consciously Keynesian). And when the transition
to a peacetime economy in the United Kingdom needed a boost at the end of the war, he welcomed the Beveridge Report, now recognized
as the founding document of the welfare state insofar as it is the origin of the National Health Service, social insurance, workers'
compensation, rent control, and more. If U.S. President Harry S. Truman's Fair Deal or President Lyndon B. Johnson's Great Society
programs are called "Keynesian," it's not entirely unwarranted.
But there has also always been what could be called a "right-Keynesian" way of doing economics and economic policy. Indeed, although
the welfare state is commonly thought of as the victory of left-wing economic policy, during its heyday it was actually tied to a
way of economic thinking that was in no way anti-capitalist. The Keynesian economics that ruled the disciplinary and policy roost
in the postwar Golden Age -- and justified its welfare-oriented institutions such as public housing or collective bargaining -- was
absolutely not left-wing and certainly did not understand itself as such.
The Keynesian economics that ruled the disciplinary and policy roost in the postwar Golden Age -- and justified its welfare-oriented
institutions such as public housing or collective bargaining -- was absolutely not left-wing and certainly did not understand
itself as such.
This Keynesianism has remained influential, if not dominant, within economics to this day. This is not well recognized largely because
contemporary common sense seems to suggest that a well-functioning capitalist economy must have as little to do with the state and
social life as possible. But in the decades of the postwar boom, most economists believed the state had a crucial role to play in
making capitalism work, buffering citizens from its arbitrary punishments and rendering its inequalities legitimate. There's nothing
left-wing about that.
The bipolar world of Keynesian economics is a product of several factors -- Keynes's own ego and his eagerness to have his ideas
widely accepted not least among them. But the most significant cause is almost certainly the bifurcation in Keynesian analysis that
began as soon as The General Theory 's ink dried. In a famous letter to George Bernard Shaw just before its publication, Keynes
claimed his book would "revolutionise" economics. But as it turned out, not everyone agreed.
The "revolution" The General Theory aimed to inspire involved escaping the orthodoxy he called "classical economics," a
somewhat ill-defined category in which he included many if not most of his colleagues, much to their consternation. To oversimplify
somewhat, Keynes argued that The General Theory overcame "classical" thinking by abandoning its indefensible attachment to
Say's Law -- the presumption that markets' price mechanism always efficiently links supply and demand, bringing all available resources,
including labor, into production. Worse still, to Keynes's mind, this suggested that when all engines were evidently not firing,
it was best not to intervene, because they would naturally push the economy back up to full employment. All sub-full employment conditions
were, by definition, in what he called "disequilibrium." This is the kind of economic analysis, for example, behind central banks'
reluctance to lower interest rates and abandon the gold standard when the Depression hit.
But this was 1936, remember. After years of widespread unemployment and vast pools of idle resources in every nation in the capitalist
West, it seemed pretty clear that markets were not self-correcting, and that the economy could quite easily find a disastrous equilibrium,
or even no equilibrium at all, far below full employment.
The most common criticism Keynes had to deal with in the months after The General Theory 's appearance was that it was
simply old wine in new bottles, readily translatable into "classical" terms. The timing of this debate is crucial. While the formalization
or "mathematization" of economics had begun several decades earlier, by the 1930s the discipline was at an important moment in the
transition. The profession was leaving behind the expository mode of expression favored by Keynes and most earlier political economists,
which relied on little and quite simple math to make its point, and turning to the highly technical, formally complex mode of argument
that dominates today. While Keynes himself was suspicious of the reliance on increasingly formal methods -- "I doubt if they can
carry us any further than ordinary discourse can" -- this was (and is) the conceptual language through which much of the debate about
The General Theory has played out, among both admirers and critics.
In practice, this involved framing Keynes's ideas using the terms and models of the classical economics he claimed to relegate
to the dustbin of history. The contest over the results of these efforts is the origin of the split in the Keynesian worldview and
the multiple political purposes Keynes and Keynesianism seem to serve. What today is called "post-Keynesian" economics, essentially
the left-Keynesian position, rejected the retranslation into classical. Those now called "New Keynesians," occupying the loose right-Keynesian
position, celebrated it. A wide gap has since opened up between the camps, the space between what the economist Axel Leijonhufvud
has called "the economics of Keynes and Keynesian economics."
Perhaps the seminal moment in the emergence of this division is the controversy over the so-called
IS-LM model of the macroeconomy. First formulated in 1937
by Keynes's friend John Hicks, IS-LM was designed to describe an economy on classical terms in a manner that took account of one
of The General Theory 's principal criticisms of classical economics: that it always assumed a tendency to full employment.
With IS-LM, Hicks tried to capture this criticism by devising a new type of classical equilibrium model. At its simplest, Hicks'
model says that economic output (including levels of employment) will be determined by the intersection of two curves ("schedules"):
one that describes the range of possible relationships between investment demand and the supply of savings (investment-saving, or
IS, which we can basically think of as the "real" economy), and another that describes the range of possible relationships between
the demand for and supply of money (liquidity preference-money supply, or LM, essentially the financial side of the economy). The
model is almost perfectly intuitive: macroeconomic equilibrium is the point at which conditions in the "real" economy intersect with
credit conditions in the money markets. There is no reason to expect the level of output at this point to involve full employment.
Hicks's IS-LM model is the first step in what has since been labeled the "neoclassical synthesis," the marriage of Keynesian intuition
and classical equilibrium analysis. The bulk of the synthesizing work was eventually done by postwar American economists such as
Paul Samuelson and Alvin Hansen, who found in IS-LM an extraordinarily useful tool for policy analysis: If the IS curve is the real
economy, then we can shift it with fiscal policy; if LM is money markets or the financial side of the economy, we can shift it with
monetary policy. As Samuelson put it, with skillful use of the two, we can have a "managed economy" that behaves like a neoclassical
model.
In other words, we can -- and indeed must -- use regulatory tools to realize the high-growth capitalist economy the classicals
said markets would produce if left to themselves. This, not any sort of left-wing agenda, is the Keynesian economics that cemented
the economic foundation of the welfare state, and -- with important changes of course -- this common sense remains at the heart of
modern economics. Paul Krugman and Joseph Stiglitz, among the most prominent economists working today, are both New Keynesians in
this tradition.
Much of this work was done in Cambridge, Massachusetts, especially at the Massachusetts Institute of Technology, where Krugman
and Stiglitz were trained. Across the Atlantic at the other Cambridge, however -- Keynes's University of Cambridge -- many of Keynes's
students and colleagues saw the neoclassical synthesis as a step backward, the dilution or even betrayal of Keynes's contribution.
Led by Joan Robinson, among the most brilliant and creative economists of the 20th century, the basis of a more critical Keynesianism
-- what we now call "post-Keynesianism" -- took shape. Robinson, never one to mince words, labeled the neoclassical synthesis "bastard
Keynesianism," an ad hoc mix of cherry-picked bits of The General Theory and classical arrogance.
The distance between the Keynesian camps today originates in these contrasting postwar trajectories, and for the most part it
has tended to only grow wider.
The distance between the Keynesian camps today originates in these contrasting postwar trajectories, and for the most part it
has tended to only grow wider.
Today, the intra-Keynesian debate matters at least as much for our understanding of contemporary politics as our grasp of economics
proper, because it also captures the conversation around key public policy questions. Right now, New Keynesians such as Krugman,
Stiglitz, and Janet Yellen dominate much of the public-intellectual space in economics, while some of the most incisive economic
minds on the left, such as Ann Pettifor in the U.K. and Stephanie Kelton in the United States, are post-Keynesians.
For the former, the most important Keynesian lesson is that on its own, effective demand will rarely if ever reach a level that
generates full employment. They mostly work with tools and models derived from the tradition Hicks inaugurated with IS-LM, which
is to say mostly quite non-Keynesian equilibrium economics to which frictions, information asymmetry, and price stickiness have been
added to make it more realistic. In contrast, the latter work from the proposition that for Keynes, as Robinson put it, "the very
essence of his problem was uncertainty." Decisions, calculations, expectations, even monetary values are always worked out in historical,
not logical time. If that is the case, then much of orthodox macroeconomics' so-called hydraulic analysis -- push X down and Y must
go up, producing another equilibrium -- is up for debate.
Having uncertain expectations about the future was in many ways the element of The General Theory that Keynes most emphasized
after its publication. Businesses invest and hire (or not) based on expected future demand, consumers spend (or not) based
on expected future income. It is quite possible those expectations will turn out to be mistaken. If so, then it is virtually
guaranteed that at any moment things are going to be at least a little out of balance -- too much of something, not enough of another.
In that shifting reality, everyone is constantly readjusting their expectations of tomorrow, next year, or a decade from now -- and
the further out we look, the more uncertain we get. As Keynes famously said, regarding most important future events, "We simply do
not know."
For Robinson and those who follow in her footsteps, the suppression of fundamental uncertainty in the neoclassical synthesis is
among the most egregious of its many errors. IS-LM, and the menu of fine-tuning policy choices it seemed to provide, took economics
back to the realm of abstraction and away from Keynes's insistence on an economics for "the kind of system in which we actually live."
It dismissed true uncertainty and replaced it with a set of equilibrium points, none of which was really uncertain insofar as it
was mechanically determined by the dynamics of the model. Hyman Minsky (whose financial instability hypothesis helped a lot of people
understand Lehman Brothers' collapse) called it "Hamlet without the prince."
These differences have become very public recently in the heated debate around so-called Modern Monetary Theory. This theory --
which is founded on the claim that a sovereign cannot default on a debt denominated in its own currency, and thus has the fiscal
flexibility to use deficits to generate full employment (or address the climate emergency) -- grew directly out of post-Keynesian
economic soil. New Keynesians for the most part vehemently disagree. Krugman, who calls himself a "conventional Keynesian," says
Modern Monetary Theory forgets what are to his mind unimpeachable truths of "standard macroeconomics" -- like the fact that expanding
deficits lead to higher interest rates that crowd out private investment. Indeed, he uses the IS curve to make his argument, leading
Kelton to dismiss the "crude,
IS-LM interpretation of Keynes" on which it is based.
While a broadly centrist or what Americans call "liberal" constituency remains committed to capitalism and to something like a
New Keynesian approach to the economy (at least in moments of crisis), today's left encompasses a mix of Keynesianisms and more radical
economic ideas. This is because the left, to the extent that we can even use the singular, weaves together a rather unruly coalition
-- from those considered true democratic socialists to liberals sympathetic to Sens. Elizabeth Warren and Bernie Sanders. Accelerating
inequality, climate change, and the President Donald Trumps of the world have pushed formerly market-oriented New Keynesians such
as Krugman and Robert Reich to include some post-Keynesian thinking in their analyses. Kelton, the prominent post-Keynesian and key
modern monetary theorist, is Sanders's own economic advisor. In fact, although Keynes and Keynesianism have never been necessarily
left, we are at a moment when Keynesian ideas are one of the few things that seem to have the potential to unite a viable left coalition
Keynesian ideas are one of the few things that seem to have the potential to unite a viable left coalition
, and the excitement generated by proposals for a Green New Deal, currently most closely associated with the Sanders campaign and
Rep. Alexandria Ocasio-Cortez, is proof it is by no means impossible.
Much of that momentum has come from the increasing size and effectiveness of youth-led activism. The generational shift is potentially
crucial here, because the fact that more and more young people are embracing socialism and getting involved in left politics is,
maybe ironically given Keynes's own sentiments, arguably much more closely related to the broad appeal of left-Keynesianism than
to that of Marxism. Not that these youth are not truly radical -- many of them are formulating a sophisticated socialism based in
the ideas of Marx, Antonio Gramsci, and Rosa Luxemburg. But the radically individualist, pro-market, and increasingly unforgiving
economic thinking that has dominated American debate since before they were born has for many of them made what once seemed reasonably
nonradical to their grandparents -- Keynes's Keynesianism -- seem radical. It is no fault of theirs that for more than a few of them,
socialism can easily look something like an environmentally sustainable version of the welfare state that labor unions have been
demanding for decades. At the packed rallies for the Green New Deal, Roosevelt is as much a hero as Salvador Allende.
Some degree of rapprochement between the Keynesianisms was perhaps always a possibility, because Keynesianism, whatever its stripes,
has always been about addressing a crisis, actual or potential. Keynes wrote The General Theory in the 1930s in the shadow
of growing social disorder, and insurgent fascisms and radical socialisms, not to mention collapsing empires. While the "or else"
that loomed over the Cold War-era West was perceived as more foreign, there can be no doubt that both the Bretton Woods system (which
Keynes helped design) and the economics of the welfare state were constructed at least partly in societies that embraced capitalism
but never quite trusted the goods that free markets would deliver. Today, after the embarrassment of the financial crisis, economics
rediscovered Keynes, and, for many, the simultaneous crises of ecology, inequality, and democracy only make Keynesianism of some
variety more appealing than the status quo.
In other words, Keynes has become essential to much of the left partly because the widespread sense of impending crisis calls
out desperately for something to be done
Keynes has become essential to much of the left partly because the widespread sense of impending crisis calls out desperately
for something to be done
, and partly because the vast differences between them seem increasingly irrelevant in the face of potential calamity. In fact, a
Keynesian rapprochement is arguably already underway. Stiglitz, perhaps the most prominent economist-public intellectual in the English-speaking
world, has dedicated enormous energy to analyzing and advocating substantial carbon taxes and measures for addressing inequality
both within and between nations. His latest book is subtitled Progressive Capitalism for an Age of Discontent . Esther Duflo,
another Keynesian and one of this year's Nobel Prize winners, has a new book out that takes on similar problems. Both begin from
the same place -- the world is increasingly anxious about the future of civilization, and has a reason to be -- and both begin there
not by chance. This is to a significant extent what Keynesianism has always been about.
Keynes himself said that our problems are mostly a "frightful muddle, a transitory and an unnecessary muddle," from which science,
experts, and reason could almost certainly rescue us. On this, virtually every Keynesian agrees. Change -- maybe radical, maybe not
-- is afoot. Whether it will be enough, soon enough, is by no means clear. Climate change alone would seem to demand more transformative
political-economic surgery, but at present, at least, the plan to get there goes through Keynes.
Geoff Mann is director of the Centre for Global Political Economy, Simon Fraser University.
..all i mostly see is the needed collapse and waiting for that to happen..
someone around here said recently that it should be smooth sailing for the USA for at
least another 150 to 200 years, so indeed to make a prediction it's enough you have vocal
cords.
interestingly though, Dmitry Orlov, who has invested much of his overall thesis in the
process of collapse (of the US empire) recently
predicted its happening in his lifetime At this point, I am tempted to go out on a limb
and predict that if all goes well (for me) I will still be alive when this collapse actually
transpires
The congress decline is now visible. Other institutions will follow.
Much depends on how long "plato oil" will hold and Seneca cliff arrives.
Notable quotes:
"... First the institutions will decline. Second, the State will decline. Third, the economy will decline and only after this "phase 3" that we'll be able to se the real desintegration of the USA. ..."
"... More probable would be the gradual secession of some States after the economy has degraded enough. I wouldn't consider the loss of one peripheral State as the formal end of the USA, but if it goes to the stage of it losing more or less the Southern States or the Midwest States, then I think some historians would use these as a useful event to mark the formal end of the USA. ..."
"... the USA will remain a very influent regional superpower for the foreseeable future. It would have to take the entire capitalist structure to fall for the USA to really enter its disintegration phase. I've talked with some Marxists, and the most optimistic of them believe the USA still has some 150-200 years of tranquil existence. Of course, we're not psychics, so they are all wild guesses. ..."
@ Posted by: Passer by | Dec 9 2019 16:39 utc | 102
Well, the only USA that matters to the rest of the world is the
USA-as-the-world's-sole-superpower. If that version of the USA disappears, then we would be
talking about a completely different geopolitical architecture ("multipolar").
The USA itself doesn't need to collapse or disintegrate for that to happen.
My opinion is that the USA is losing its "sole superpower" status, albeit at a very slow
pace. It couldn't be another way, since the USA is a nuclear superpower, so its competitors
must deactivate its hegemony slowly and gently.
I also believe the USA will disappear some day, but in a different way than the USSR.
Since the USA is a capitalist economy, it will desintegrate rather than collapse, and this
disintegration will happen more a la Roman Empire (Crisis of the Third Century and beyond)
rather than a la USSR. Capitalism has an anarchic way of producing and distributing its
wealth, resulting in a decentralized web of institutions. First the institutions will
decline. Second, the State will decline. Third, the economy will decline and only after this
"phase 3" that we'll be able to se the real desintegration of the USA.
I don't believe the USA will fall by conquest, mostly because it has MAD, second because
its geographic location favors a defensive war of its territory. More probable would be
the gradual secession of some States after the economy has degraded enough. I wouldn't
consider the loss of one peripheral State as the formal end of the USA, but if it goes to the
stage of it losing more or less the Southern States or the Midwest States, then I think some
historians would use these as a useful event to mark the formal end of the USA.
But before that, I believe the USA will remain a very influent regional superpower for
the foreseeable future. It would have to take the entire capitalist structure to fall for the
USA to really enter its disintegration phase. I've talked with some Marxists, and the most
optimistic of them believe the USA still has some 150-200 years of tranquil existence. Of
course, we're not psychics, so they are all wild guesses.
"... Significantly Wallerstein, arguing from history that the intervals between these brief periods of hegemony are periods in which several states compete for the 'succession'-France and the UK in the period after the Dutch moment had passed; Germany and the United States after 1850- suggested that the European Community would be competing with the East Asian bloc for hegemony. ..."
"... Also of interest is the fact that Russia, which didn't feature among the contestants for future hegemony in 1980, has now re-emerged in its ancient role as the 'eastern' version of expanding America, a mirror image with even more natural resources, a larger landmass and a natural affinity with China and the formerly Soviet states of central Asia. ..."
"... It might be argued that it is because the hubristic United States cannot bring itself to treat the potentially enormously powerful states of Europe as anything more than contemptible slaves that it is never going to re-establish its global position. On the other hand a case can be made that the current thrust of the United States is to re-establish its ownership of the rest of the hemisphere. It treats Canada as a sort of Puerto Rico with snow and oil. Only recently was Mexico was threatened on the improbable-in historical terms- that it allows the CIA to run its drug trade and supervise its Death Squads. ..."
"... US interference and arrogance is as evident as it has ever been. What is less evident is whether, for all its military and financial power, US policy against Cuba, Nicaragua, Venezuela and their increasingly rebellious neighbours has any chance of succeeding. ..."
There is a sense in which everything on this blog comes back to international relations and
neo-con attempts to build "A New American Century." Which is to say hegemony and
globalisation.
Immanuel Wallerstein, who recently died and will be greatly missed, had some interesting
things to say about hegemonic powers.
He identified the Dutch Republic, for a brief period after emerging victorious from the
Thirty Years war in 1648, the United Kingdom, after Waterloo and up until the Crimean War and
the United States, from 1945 to 1973 as true hegemons with networks of alliances and
designated enemies.
He also makes the point that, long after states have ceased to be hegemonic, they remain
dominant in the areas of finance and culture.
So far as the United States is concerned it is hanging on in both those areas in which,
long after the paper in its Thuggerish foreign policy has been exposed, it retains enormous
influence though its media/entertainment businesses and Wall Street's command in finance. (It
is interesting here that The City, long after the UK has become a US puppet, still has
enormous power in the world of finance.)
Wallerstein prophesied (and this was in 1980) that the next contender for the position of
hegemon was likely to be an East Asian alliance of Japan, Korea and China.
Not a bad guess but one, like the end of US hegemony, made premature by the implosion of the
Soviet Union which provided the US with a new dawn and another chance-quickly blown- to
re-establish its hegemony. Which it did if not in fact then in its own mind in the shape of
the hubristic unipolar moment and Brother Fukuyama's End of History celebration.
Significantly Wallerstein, arguing from history that the intervals between these brief
periods of hegemony are periods in which several states compete for the 'succession'-France
and the UK in the period after the Dutch moment had passed; Germany and the United States
after 1850- suggested that the European Community would be competing with the East Asian bloc
for hegemony.
It is that prophecy which looks lame currently with the European countries probably more
under the domination of the United States than at any time in the past. Wallerstein was
writing at a period when it looked as if the the EEC strengthened by the accession of, inter
alia, the UK would be capable of throwing off the domination of the US and taking an
independent course of its own.
This is a dream, rather like that of the 'Social Europe' in which full employment, welfare
states, free education and regional development defy the spread of neo-liberal values and
strategies, which still leads a ghost like existence in the minds of Europhiles who don't get
out much and have never heard of Greece and the PIIGs.
Also of interest is the fact that Russia, which didn't feature among the contestants for
future hegemony in 1980, has now re-emerged in its ancient role as the 'eastern' version of
expanding America, a mirror image with even more natural resources, a larger landmass and a
natural affinity with China and the formerly Soviet states of central Asia.
It might be argued that it is because the hubristic United States cannot bring itself to
treat the potentially enormously powerful states of Europe as anything more than contemptible
slaves that it is never going to re-establish its global position. On the other hand a case
can be made that the current thrust of the United States is to re-establish its ownership of
the rest of the hemisphere. It treats Canada as a sort of Puerto Rico with snow and oil. Only
recently was Mexico was threatened on the improbable-in historical terms- that it allows the
CIA to run its drug trade and supervise its Death Squads.
As to the rest of central America and the southern continent: US interference and
arrogance is as evident as it has ever been. What is less evident is whether, for all its
military and financial power, US policy against Cuba, Nicaragua, Venezuela and their
increasingly rebellious neighbours has any chance of succeeding.
It wrote in 2001 that the War on Terror was destined to end with Latin American militias,
wearing red armbands, patrolling the streets of Cleveland. Perhaps it will.
In Uncle Sam Land, "freedom" has two meanings. Rich people are free to do as they like. The
rest of us are free to live under a bridge and starve.
We do have one right: The Right To Obey.
The whole society is organized around obedience, and the purpose of public education is to
make sure every one obeys. Modern schools are more accurately called "day prisons", with all
the cameras, metal detectors, armed police, isolation rooms, etc. I wonder how many people
realize that "lockdown" is straight out of the criminal prison system, and is now a regular
occurrence for little kids.
'Free World'? What exactly does that mean? What does 'Freedom' mean? I 'freely' admit I
simply have no idea what people mean when they urgently bleat words like that at me.
To me, freedom applies to an action. You are free to do this, or you are free to do that.
Which is, of course, actions that are constrained or allowed by various laws passed by local,
state, federal and/or international entities. I would suppose that the amount of freedom you
have depends on haw many laws have been passed in your own country to criminalize various
activities.
Has anyone done such an analysis, to define which countries have limited their citizens
behaviour? Simplistically, which countries have written the most laws?
I'll be willing to bet they are the 'democracies' that are most bellicose about protecting
'freedoms'. Let's face facts, politicians just love to keep passing laws, otherwise they have
no reason to exist. I unreasonably think there should be another superior law, that any
government should only be able to have so many laws. If they want to have yet another one,
take some other law away. Otherwise 'freedoms' are just being chipped away at,
constantly.
'Freedom', as a thing unto and onto itself, seems a completely meaningless concept. I keep
wondering why politicians aren't asked what they are talking about when they roar about
'freedom' as a general term.
Even Economists' seem to agree that the decline of labor power, the decimation of Unionism in
the US, has had a devastating effect on the existing quality of life, the opportunity for
economic mobility, and even longevity in the US. The society has been wringing it's hands
over how to bring back the salad days of the strong middle class afforded by representative
labor in the 50's and 60's.
Bernie Sanders platform represents all that was lost. There really is no difference
between Sanders proposals and the union contracts of yore. The election of Sanders along with
a unified Congress to enact his labor friendly proposals will restore the American middle
class.
The Trojan horse of neo-liberal economics, and the defenestration of an independent press
into an oligopoly of lies, was able sell labor arbitrage as beneficial. Underselling American
production by Capitalists employing a Communist monopoly supplier of labor, at substandard
income, health, safety, and environmental conditions, against American workers, was sold as
benefit.
Forty years later, America is unrecognizable. Reduced to platitudes, paying homage to a
long lost civilization.
Yep, but before we could get there we first had to believe that corporate mergers were
necessary and good to achieve economies of scale rather than merely to bestow unbridled
monopoly power, monopsony power, and political power upon the biggest sharks in the tank.
Mergers were about owning Boardwalk and Park Place and globalization was about collecting
rents. Mergers crippled unions and globalization put them out of their misery with a final
death blow.
Vero Beach is awesome, as is most of the FL coasts when there are no hurricanes in town. I
checked Google Map and you are halfway between Daytona Beach and Ft Lauderdale and well away
from that Miami place. If I lived there then I would be fishing for tuna, cobia, wahoo, and
king mackerel every day.
2020 Democratic Candidates Wage Escalating Fight
(on the Merits of Fighting) https://nyti.ms/2Ds4OIC
NYT - Mark Leibovich - Nov. 30
For all the emphasis placed on the various divides
among the candidates, the question of "to fight or
not to fight" might represent the most meaningful contrast.
WALPOLE, N.H. -- Pete Buttigieg has a nifty politician's knack for coming off as a
soothing, healing figure who projects high-mindedness -- even while he's plainly kicking his
opponents in the teeth.
"There is a lot to be angry about," he was saying, cheerfully. Mr. Buttigieg, the
37-year-old mayor of South Bend, Ind., was seated aboard his campaign bus outside a New
Hampshire middle school before a recent Sunday afternoon rally. He was sipping a canned
espresso beverage and his eyes bulged as he spoke, as if he was trying to pass off as
revelatory something he had in fact said countless times before.
"But fighting is not enough and it's a problem if fighting is all you have," he said. "We
fight when we need to fight. But we're never going to say fighting is the point."
In fact, these were fighting words: barely disguised and directed at certain Democratic
rivals. As Mr. Buttigieg enjoys a polling surge in Iowa and New Hampshire, he is trying to
prevent a rebound by Senator Elizabeth Warren, who has leveled off in the polls after a
strong summer, and contain Senator Bernie Sanders, whose support has proved durable.
Both are explicit fighters, while Mr. Buttigieg, former Vice President Joseph R. Biden Jr.
and some others warn that Democrats risk scaring off voters by relying too heavily on
pugnacious oratory, and by emphasizing the need to transform America rather than focusing
simply on ending the Trump presidency and restoring the country to some semblance of
normalcy.
As Mr. Buttigieg has sharpened this critique, however, he has adopted a more aggressive
tone himself -- a sly bit of needle-threading that has coincided with his rise. Mr. Biden,
too, has combined cantankerous language about beating Mr. Trump "like a drum" with more
uplifting rhetoric about "restoring the soul of America."
As Mr. Buttigieg spoke, Ms. Warren and Mr. Sanders were holding rallies in which they
could scarcely utter two sentences without dropping in some formulation of the word "fight."
They spoke of the various "fights" they had led and the powerful moneyed interests they had
"fought" and how they would "keep fighting" all the way to the White House.
Mr. Sanders touted himself as the candidate who would "fight to raise wages" and was
"leading the fight to guarantee health care" and "fight against corporate greed." Ms. Warren
(fighting a cold) explained "why I got into this fight, will stay in this fight and why I am
asking others to join the fight."
Every politician wants to be known as a "fighter," even the placid young mayor who has
promised to "change the channel" on Mr. Trump's reality show presidency and all the rancor
that has accompanied it. But Mr. Buttigieg is also fighting against what he sees as the
political trope of fighting per se. He is presenting himself as an antidote to the
politics-as-brawl predilection that has become so central to the messaging of both parties
and, he believes, has sapped the electorate of any hope for an alternative. "The whole
country is exhausted by everyone being at each other's throats," Mr. Buttigieg said.
At a basic level, this is a debate over word choice. Candidates have been selling
themselves as "fighters" for centuries, ostensibly on behalf of the proverbial "you." It goes
back at least to 1828, when Andrew Jackson bludgeoned John Quincy Adams, his erudite
opponent, with the slogan "Adams can write but Jackson can fight." Populists of various
stripes have been claiming for decades to "fight for you," "fight the power," "fight the good
fight" and whatnot, all in the name of framing their enterprises as some cause that
transcends their mere career advancement.
In a broader sense, though, it goes to a stylistic divide that has been playing out for
nearly a year in the battle for the Democratic nomination. The split is most acute among the
top four polling candidates: you could classify Ms. Warren and Mr. Sanders as the pugilists
in the field, whereas Mr. Buttigieg, he of the earnest manner and Midwestern zest for
consensus, fashions himself a peacemaker. Mr. Biden would also sit in the latter camp, with
his constant promises to "unite the country" and continued insistence -- oft-derided -- that
his old Republican friends would be so chastened by Mr. Trump's defeat that they would
suddenly want to work in sweet bipartisan harmony with President Joe.
For all the emphasis placed on the identity and generational partitions between the
candidates, the question of "to fight or not to fight" might represent a more meaningful
contrast. "This has been a longstanding intramural debate," said David Axelrod, the
Democratic media and message strategist, who served as a top campaign and White House aide to
former President Barack Obama. "It's what Elizabeth Warren would call 'big structural change'
versus what critics would call 'incremental change.'"
He believes the energy and size of the former camp has been exaggerated by the attention
it receives. "I think sometimes the populist left is overrepresented in places where
reporters sometimes spend a lot of time," Mr. Axelrod said. "Like on Twitter." ...
Apparently what happens in Iowa and New Hampshire stays in Iowa and New Hampshire. Here in
VA, which does not primary for the Democratic Party until Super Tuesday (March 3, 2020) the
only message coming through from Dems is Dump Trump. Since VA went for Hillary in 2016, then
it is unlikely that voters here will hold for Trump now, but not for lack of trying among
staunch Republican Party financial backers.
Fortunately enough for me though is that my happy life does not hinge on national
politics. VA will be a better place to live now that Republicans no longer control the
state's legislature nor executive branches. Sorry about the country, but it must live with
its own unique history of bad choices.
Here in MA, we pay particular attention to
our cranky neighbor NH because we know how
votes will go here at home, but not there.
NH is endlessly fascinating, and remote-ish.
With four electoral votes, it has one-third
more than Vermont. That's why it's important-ish.
Overall, the six New England states have an extra
twelve electoral votes, disproportionate to our
total population. Lately all Dem, except for a
stubborn pocket in Maine.
MA is also joined at the hip with NY,
sharing about a hundred miles of border,
and much political sensibility. It wasn't
always this way (except for the border part.)
I was growing up in western NY when Robert Kennedy
was foisted upon us as a Senator, mainly from NYC.
He with considerable NYC roots, but that god-awful
'Bahston' accent. In those days, western NY was
a GOP bastion, and still is to a lesser extent.
None the less, we are still joined at the hip.
Just not over the Yankees & the Red Sox.
Thanks. My wife is from CT. Is CT even more true blue than MA. A quandary for me as she was
raised devout Republican although her mother was a public school teacher.
All of New England is blue these days, except
for a portion of Maine. Only one GOPerson in
Congress these days, that being Susan Collins
of Maine, soon to be up for re-election.
'Sen. Susan Collins faces a potentially
difficult reelection campaign in 2020. ... J
Although (she does not yet have a primary challenger), Collins could be especially
vulnerable if she breaks with Trump -- she's the most moderate Republican in the Senate and
has had lukewarm intraparty support in the past, though it improved markedly after she voted
to confirm Brett Kavanaugh to the Supreme Court last year.' ...
Primary Challenges Might Keep These Republican Senators
From Voting To Remove Trump https://53eig.ht/36mLHgu
New Housing and household durables
In as much as they increase
The labor productivity
of
Domestic production...
Are a worthy investment
Best financed with credit
The combo of productivity increases
and substitution of market products combined cut domestic labor time dramatically
Last century
He is protecting this text book, it is in the parenthesis (if you must).
His text book is a fraud, it explains very little about what is happening, contains
nothing about irregular gains to scale, nothing about value added network effect, assumes the
senate is a proportional democracy, never considers the regularity of generation default. The
text should be shunned, it is ten years behind the mathematicians.
Tax the Rich? Here's How to Do
It (Sensibly) https://nyti.ms/2NsILFP
NYT - Andrew Ross Sorkin - Feb. 25, 2019
Everyone, it seems, has ideas about new tax strategies, some more realistic than others.
The list of tax revolutionaries is long. ...
Whatever your politics, there is a bipartisan acknowledgment that the tax system is
broken. Whether you believe the system should be fixed to generate more revenue or employed
as a tool to limit inequality -- and let's be honest for a moment, those ideas are not always
consistent -- there is a justifiable sense the public doesn't trust the tax system to be
fair.
In truth, how could it when a wealthy person like Jared Kushner, the son-in-law of the
president, reportedly paid almost no federal taxes for years? Or when Gary Cohn, the former
president of Goldman Sachs who once led President Trump's National Economic Council, says
aloud what most wealthy people already know: "Only morons pay the estate tax."
If you pay taxes, it's hard not to feel like a patsy.
A New York Times poll found that support for higher taxes on the rich cuts across party
lines, and Democratic presidential hopefuls are offering plans to do it. But the current
occupant of the Oval Office signed a $1.5 trillion tax cut into law, so the political hurdles
are high.
Over the past month, I've consulted with tax accountants, lawyers, executives, political
leaders and yes, billionaires, and specific ideas have come up about plugging the gaps in the
tax code, without blowing it apart. ...
Patch the estate tax
None of the suggestions in this column -- or anywhere else -- can work unless the estate
tax is rid of the loopholes that allow wealthy Americans to blatantly (and legally) skirt
taxes.
Without addressing whether the $11.2 million exemption is too high -- and it is -- the
estate tax is riddled with problems. Chief among them: Wealthy Americans can pass much of
their riches to their heirs without paying taxes on capital gains -- ever. According to the
Center on Budget and Policy Priorities, unrealized capital gains account for "as much as
about 55 percent for estates worth more than $100 million." ...
The Congressional Budget Office estimates simply closing this loophole would raise more
than $650 billion over a decade.
As central as this idea is to the other suggestions, it is not an easy sell. Three
Republican senators introduced a plan this year to repeal the estate tax.
But this and other changes -- eliminating the hodgepodge of generation-skipping trusts
that also bypass estate taxes -- are obvious fixes that would introduce a basic fairness to
the system and curb the vast inequality that arises from dynastic wealth.
Increase capital gains rates for the wealthy
Our income tax rates are progressive, but taxes on capital gains are less so. There are
only two brackets, and they top out at 20 percent.
By contrast, someone making $40,000 a year by working 40 hours a week is in the 22 percent
bracket. That's why Warren Buffett says his secretary pays a higher tax rate.
So why not increase capital gains rates on the wealthiest among us?
One chief argument for low capital gains rates is to incentivize investment. But if we
embraced two additional brackets -- say, a marginal 30 percent bracket for earners over $5
million and a 35 percent bracket for earners over $15 million -- it is hard to see how it
would fundamentally change investment plans. ...
['Incentivizing investment'
leads to more income inequality.]
End the perverse real estate loopholes
One reason there are so many real estate billionaires is the law allows the industry to
perpetually defer capital gains on properties by trading one for another. In tax parlance, it
is known as a 1031 exchange.
In addition, real estate industry executives can depreciate the value of their investment
for tax purposes even when the actual value of the property appreciates. (This partly
explains Mr. Kushner's low tax bill.)
These are glaring loopholes that are illogical unless you are a beneficiary of them.
Several real estate veterans I spoke to privately acknowledged the tax breaks are
unconscionable.
Fix carried interest
This is far and away the most obvious loophole that goes to Americans' basic sense of
fairness.
For reasons that remain inexplicable -- unless you count lobbying money -- the private
equity, venture capital, real estate and hedge fund industries have kept this one intact.
Current tax law allows executives in those industries to have the bonuses they earn investing
for clients taxed as capital gains, not ordinary income.
Even President Trump opposed the loophole. In a 2015 interview, he said hedge fund
managers were "getting away with murder."
This idea and the others would not swell the government's coffers to overflowing, but they
would help restore a sense of fairness to a system that feels so easily gamed by the
wealthiest among us.
There are a couple of other things worth considering.
Let's talk about philanthropy
Nobody wants to dissuade charitable giving. But average taxpayers are often subsidizing
wealthy philanthropists whose charitable deductions significantly reduce their bills.
These people deserve credit for giving money to noble causes (though some nonprofits are
lobbying organizations masquerading as do-gooders) but their wealth, in many cases, isn't
paying for the basics of health care, defense, education and everything else that taxes pay
for.
Philanthropic giving is laudable, but it can also be a tax-avoidance strategy. Is there a
point at which charitable giving should be taxed?
I'm not sure what the right answer is. But consider this question posed by several
philanthropic billionaires: Should the rich be able to gift stock or other assets to charity
before paying capital gains taxes? ...
Finally, fund the Internal Revenue Service
The agency is so underfunded that the chance an individual gets audited is minuscule --
one person in 161 was audited in 2017, according to the I.R.S. And individuals with more than
$1 million in income, the people with the most complicated tax situations, were audited just
4.4 percent of the time. It was more than 12 percent in 2011, the Center on Budget and Policy
Priorities reported.
The laws in place hardly matter: Those willing to take a chance can gamble that they won't
get caught. That wouldn't be the case if the agency weren't having its budget cut and losing
personnel. ...
'If you pay taxes, it's hard not to feel like a patsy.'
[I heartily disagree.]
'In 1927 in the court case of Compañía General de
Tabacos de Filipinas v. Collector of Internal Revenue
a dissenting opinion was written by Oliver Wendell
Holmes, Jr. that included the following phrase ... :
One can at least imagine that,
back in the day (long ago?),
wealth would have been taxed,
but then with the rise of the
middle-class, taxes were extended
to those who had *income* if not
much wealth. Perhaps just as the
wealthy were hiring lawyers and
accountants, and making generous
political 'contributions' to
avoid taxes generally.
It really comes down to priorities. Are we a democracy, or not. Health care, education, etc.
for the citizens, or corporate welfare for the aristocracy.
This New York Times article on rising mortality had me thinking about regional
disparities. It's true that rising mortality is widespread, but the article also acknowledges
that mortality in coastal metros has improved 1/
It's Not Just Poor White People Driving a Decline in Life Expectancy
A new study shows that death rates increased for middle-aged people of all racial and ethnic
groups.
The State of US Health, 1990-2016
Burden of Diseases, Injuries, and Risk Factors Among US States
What we see is another red-blue divide. Compare population-weighted averages for states
that supported Clinton and Trump in 2016, and you see very different trends 3/
This is NOT simply a matter of declining regions voting for Trump. Look at the 4 biggest
states: in 1990 FL and TX both had higher life expectancy than NY, now they're well behind
4/
I'm not sure what lies behind this. Medicaid expansion probably plays a role in the past
few years, and general harshness of social policies in red states may matter more over time.
Divergence in education levels may also play a role 5/
What's clear, however, is that the US life-expectancy problem is pretty much a red-state
problem. In terms of mortality, blue states look like the rest of the advanced world 6/
I was struck by one line in this article: "Life expectancy in the coastal metro areas --
both east and west -- has improved at roughly the same rate as in Canada." Indeed, the
American death trip has been driven by only part of the country 1/
It's Not Just Poor White People Driving a Decline in Life Expectancy
A new study shows that death rates increased for middle-aged people of all racial and ethnic
groups.
7:58 AM - 27 Nov 2019
And while the divergence is surely linked to growing regional economic disparities,
there's a pretty clear red-blue divide reflecting state policies. Consider NY v. TX 2/
In 1990 Texas actually had higher life expectancy, but now NY is far ahead. Surely this
has something to do with expanding health coverage, maybe also to do with environmental
policies. 3/
In general, progressive US states have experienced falling mortality along with the rest
of the advanced world. Red America is where things are different 4/
The NYT article has a graphical map
'Falling Life Expectancy' - that shows
death rate (age 25-64) declines in only
two states (CA & WY) with small increases
in 11 other states (OR, WA, AR, UT, TX, OK,
SC, GA, FL, IL & NY). Increases in all other
states. Hence, shorter life expectancies
in most states, regardless of region.
How does "death rate 25-64" relate to life expectancy?
[ Similarly, by dramatically improving the care of young children China dramatically
improved life expectancy. This was and remains a failing for India, even though India had a
far higher per capita GDP level than China before 1980. Amartya Sen has written about
this:
Anne is correct. Death rate 25-64 is throwing out the disease susceptible childhood years,
the suicides and automobile accidents of early adulthood, and also access to medical care for
the increased disease risks of advanced ages. What is left tells a story of alcoholism,
smoking, and fentanyl mostly along with healthcare access. Employment security matters in
both healthcare access and incidence of depression including adult suicide and drug use along
with a tendency to engage in risky activities just to pay the bills.
JAMA (& others who have done similar studies)
are just looking at data. Draw your own
conclusions? The media will draw theirs.
Fair to say, these are people dying NOT of old-age.
Americans' Life Expectancy Drops For Third Year In Row, Signaling There's 'Something
Terribly Wrong' Going On https://khn.org/MTAyNTQ4Mw via @khnews (Kaiser Health
News)
Americans' Life Expectancy Drops For Third Year In Row, Signaling There's 'Something
Terribly Wrong' Going On
Researchers say the grim new reality isn't just limited to rural deaths of despair, but
rather the numbers reflect that many different people living in all areas of the U.S. are
struggling. "We need to look at root causes," said Dr. Steven Woolf, the author's lead study.
"Something changed in the 1980s, which is when the growth in our life expectancy began to
slow down compared to other wealthy nations."
The New York Times: It's Not Just Poor White People Driving A Decline In Life
Expectancy
As the life expectancy of Americans has declined over a period of three years -- a drop
driven by higher death rates among people in the prime of life -- the focus has been on the
plight of white Americans in rural areas who were dying from so-called deaths of despair:
drug overdoses, alcoholism and suicide. But a new analysis of more than a half-century of
federal mortality data, published on Tuesday in JAMA, found that the increased death rates
among people in midlife extended to all racial and ethnic groups, and to suburbs and cities.
(Kolata and Tavernise, 11/26)
The Washington Post: U.S. Life Expectancy: Americans Are Dying Young At Alarming Rates
Despite spending more on health care than any other country, the United States has seen
increasing mortality and falling life expectancy for people age 25 to 64, who should be in
the prime of their lives. In contrast, other wealthy nations have generally experienced
continued progress in extending longevity. Although earlier research emphasized rising
mortality among non-Hispanic whites in the United States, the broad trend detailed in this
study cuts across gender, racial and ethnic lines. By age group, the highest relative jump in
death rates from 2010 to 2017 -- 29 percent -- has been among people age 25 to 34.
(Achenbach, 11/26)
Los Angeles Times: Suicides, Overdoses, Other 'Deaths Of Despair' Fuel Drop In U.S. Life
Expectancy
In an editorial accompanying the new report, a trio of public health leaders said the study's
insight into years of cumulative threats to the nation's health "represents a call to
action." If medical professionals and public health experts fail to forge partnerships with
social, political, religious and economic leaders to reverse the current trends, "the nation
risks life expectancy continuing downward in future years to become a troubling new norm,"
wrote Harvard public health professors Dr. Howard K. Koh, John J. Park and Dr. Anand K.
Parekh of the Bipartisan Policy Center in Washington, D.C. (Healy, 11/26)
---
Changes in midlife death rates across racial and ethnic
groups in the United States: systematic analysis of vital statistics https://www.bmj.com/content/362/bmj.k3096
British Medical Journal - August 15, 2018
'Men 65 years and older today have an average
life expectancy of 84.3 years. Life expectancy
outcomes get even better among younger men and
women according to the CDC's data. For instance,
one in 20 women who are 40 today will live to
celebrate their 100th birthday.'
American Academy of Family Physicians - December 10, 2018
"The latest CDC data show that the U.S. life expectancy has declined over the past few
years," said CDC Director Robert Redfield, M.D., in a Nov. 29 statement. "Tragically, this
troubling trend is largely driven by deaths from drug overdose and suicide.
Three new reports from the CDC indicate that the average life expectancy in the United
States has declined for the second time in three years.
Deaths from drug overdose and suicide were responsible for much of the decline, with more
than 70,000 drug overdose deaths reported in 2017.
As a result of overall increases in mortality rates, average life expectancy decreased
from 78.9 years in 2014 to 78.6 years in 2017.
"Life expectancy gives us a snapshot of the nation's overall health, and these sobering
statistics are a wake-up call that we are losing too many Americans, too early and too often,
to conditions that are preventable." ...
More than 2.8 million deaths occurred in the United States in 2017, an increase of about
70,000 from the previous year. Death rates rose significantly in three age groups during that
period (i.e., in those 25-34, 35-44, and 85 and older) and dropped in 45- to 54-year-olds,
yielding an overall age-adjusted increase of 0.4 percent. That percentage represents a rise
from 728.8 deaths per 100,000 standard population to 731.9 per 100,000.
The 10 leading causes of death remained the same from 2016 to 2017: heart disease, cancer,
unintentional injuries, chronic lower respiratory diseases, stroke, Alzheimer's disease,
diabetes, influenza and pneumonia, kidney disease, and suicide. Age-adjusted death rates
increased significantly for seven of the 10 causes, led by influenza and pneumonia (5.9
percent), unintentional injuries (4.2 percent) and suicide (3.7 percent). Death rates for
cancer actually decreased by 2.1 percent, while heart disease and kidney disease rates did
not change significantly. ...
Drug overdose death rates increased across all age groups, with the highest rate occurring
in adults ages 35-44 (39 per 100,000) and the lowest in adults 65 and older (6.9 per
100,000). ...
Free Market Drugs: A Key Part of Elizabeth Warren's Transition to Medicare for All
By Dean Baker
Earlier this month, Senator Warren put out a set of steps that she would put forward as
president as part of a transition to Medicare for All. The items that got the most attention
were including everyone over age 50 and under age 18 in Medicare, and providing people of all
ages with the option to buy into the program. This buy-in would include large subsidies, and
people with incomes of less than 200 percent of the poverty level would be able to enter the
Medicare program at no cost.
These measures would be enormous steps toward Medicare for All, bringing tens of millions
of people into the program, including most of those (people over age 50) with serious medical
issues. It would certainly be more than halfway to a universal Medicare program.
While these measures captured most of the attention given to Warren's transition plan,
another part of the plan is probably at least as important. Warren proposed to use the
government's authority to compel the licensing of drug patents so that multiple companies can
produce a patented drug, in effect allowing them to be sold at generic prices.
The government can do this both because it has general authority to compel licensing of
patents (with reasonable compensation) and because it has explicit authority under the 1980
Bayh-Dole Act to require licensing of any drug developed in part with government-funded
research. The overwhelming majority of drugs required some amount of government-supported
research in their development, so there would be few drugs that would be exempted if Warren
decided to use this mechanism.
These measures are noteworthy because they can be done on the president's own authority.
While the pharmaceutical industry will surely contest in court a president's use of the
government's authority to weaken their patent rights, these actions would not require
Congressional approval.
The other reason that these steps would be so important is that there is a huge amount of
money involved. The United States is projected to spend over $6.6 trillion on prescription
drugs over the next decade, more than 2.5 percent of GDP. This comes to almost $20,000 per
person over the next decade.
This is an enormous amount of money. We spend more than twice as much per person on drugs
as people in other wealthy countries.
This is not an accident. The grant of a patent monopoly allows drug companies to charge as
much as they want for drugs that are necessary for people's health or even their life,
without having to worry about a competitor undercutting them.
Other countries also grant patent monopolies, but they limit the ability of drug companies
to exploit these monopolies with negotiations or price controls. This is why prices in these
countries are so much lower than in the United States.
But even these negotiated prices are far above what drug prices would be in a free market.
The price of drugs in a free market, without patent monopolies or related protections, will
typically be less than 10 percent of the US price and in some cases, less than one
percent.
This is because drugs are almost invariably cheap to manufacture and distribute. They are
expensive because government-granted patent monopolies make them expensive. We have this
perverse situation where the government deliberately makes drugs expensive, then we struggle
with how to pay for them.
The rationale for patent monopolies is to give companies an incentive to research and
develop drugs. This process is expensive, and if newly developed drugs were sold in a free
market, companies would not be able to recover these expenses.
To make up for the loss of research funding supported by patent monopolies, Warren
proposes an increase in public funding for research. This would be an important move towards
an increased reliance on publicly funded biomedical research.
There are enormous advantages to publicly-funded research over patent monopoly-supported
research. First, if the government is funding the research it can require that all results be
fully public as soon as possible so that all researchers can quickly benefit from them.
By contrast, under the patent system, drug companies have an incentive to keep results
secret. They have no desire to share results that could benefit competitors.
In most other contexts we quite explicitly value the benefits of open research. Science is
inherently a collaborative process where researchers build upon the successes and failures of
their peers. For some reason, this obvious truth is largely absent from discussions of
biomedical research where the merits of patent financing go largely unquestioned.
In addition to allowing research results to be spread more quickly, public funding would
also radically reduce the incentive to develop copycat drugs. Under the current system, drug
companies will often devote substantial sums to developing drugs that are intended to
duplicate the function of drugs already on the market. This allows them to get a share of an
innovator drug's patent rents. While there is generally an advantage to having more options
to treat a specific condition, most often research dollars would be better spent trying to
develop drugs for conditions where no effective treatment currently exists.
Under the patent system, a company that has invested a substantial sum in developing a
drug, where a superior alternative already exists, may decide to invest an additional amount
to carry it through the final phases of testing and the FDA approval process. From their
vantage point, if they hope that a successful marketing effort will allow them to recover its
additional investment costs, they would come out ahead.
On the other hand, in a system without patent monopolies, it would be difficult for a
company to justify additional spending after it was already clear that the drug it was
developing offered few health benefits. This could save a considerable amount of money on
what would be largely pointless tests.
Also, as some researchers have noted, the number of potential test subjects (people with
specific conditions) is also a limiting factor in research. It would be best if these people
were available for testing genuinely innovative drugs rather than ones with little or no
incremental value.
Ending patent monopoly pricing would also take away the incentive for drug companies to
conceal evidence that their drugs may not be as safe or effective as claimed. Patent
monopolies give drug companies an incentive to push their drugs as widely as possible.
That is literally the point of patent monopoly pricing. If a drug company can sell a drug
for $30,000 that costs them $300 to manufacture and distribute, then they have a huge
incentive to market it as widely as possible. If this means being somewhat misleading about
the safety and effectiveness of their drug, that is what many drug companies will do.
The opioid crisis provides a dramatic example of the dangers of this system. Opioid
manufacturers would not have had the same incentive to push their drugs, concealing evidence
of their addictive properties, if they were not making huge profits on them.
Unfortunately, this is far from the only case where drug companies have not accurately
presented their research findings when marketing their drugs. The mismarketing of the
arthritis drug Vioxx, which increased the risk of heart attacks and strokes, is another
famous example.
We can try to have the FDA police marketing, but where there is so much money at stake in
putting out wrong information, we can hardly expect it to be 100 percent successful in
overcoming the incentives from the large profits available. There is little reason to think
that the FDA will be better able to combat the mismarketing of drugs, than law enforcement
agencies have been in stopping the sale of heroin, cocaine, and other illegal drugs. Where
you have large potential profits, and willing buyers, government enforcement is at a serious
disadvantage.
It is also worth mentioning that the whole story of medical care is radically altered if
we end patent monopolies on drugs and medical equipment, an area that also involves trillions
of dollars over the next decade. We face tough choices on allocating medical care when these
items are selling at patent protected prices, whether under the current system of private
insurance or a Medicare for All system.
Doctors and other health care professionals have to decide whether the marginal benefits
of a new drug or higher quality scan is worth the additional price. But if the new drug costs
roughly the same price as the old drug and the highest quality scan costs just a few hundred
dollars (the cost of the electricity and the time of the professionals operating the machine
and reading the scan), then there is little reason not to prescribe the best available
treatment. Patent monopoly pricing in these areas creates large and needless problems.
In short, Senator Warren's plans on drugs are a really huge deal. How far and how quickly
she will be able to get to Medicare for All will depend on what she can get through Congress.
But her proposal for prescription drugs is something she would be able to do as president,
and it will make an enormous difference in both the cost and the quality of our health
care.
NAFTA Was About Redistributing Upward
By Dean Baker
The Washington Post gave readers the official story about the North American Free Trade
Agreement, diverging seriously from reality, in a piece * on the status of negotiations on
the new NAFTA. The piece tells readers:
"NAFTA was meant to expand trade among the United States, Canada and Mexico by removing
tariffs and other barriers on products as they were shipped between countries. The pact did
open up trade, but it also proved disruptive in terms of creating new manufacturing supply
chains and relocating businesses and jobs."
This implies that the disruption in terms of shifting jobs to Mexico to take advantage of
low wage labor was an accidental outcome. In fact, this was a main point of the deal, as was
widely noted by economists at the time. Proponents of the deal argued that it was necessary
for U.S. manufacturers to have access to low cost labor in Mexico to remain competitive
internationally. No one who followed the debate at the time should have been in the last
surprised by the loss of high paying union manufacturing jobs to Mexico, that is exactly the
result that NAFTA was designed for.
NAFTA also did nothing to facilitate trade in highly paid professional services, such as
those provided by doctors and dentists. This is because doctors and dentists are far more
powerful politically than autoworkers.
It is also wrong to say that NAFTA was about expanding trade by removing barriers. A major
feature of NAFTA was the requirement that Mexico strengthen and lengthen its patent and
copyright protections. These barriers are 180 degrees at odds with expanding trade and
removing barriers.
It is noteworthy that the new deal expands these barriers further. The Trump
administration likely intends these provisions to be a model for other trade pacts, just as
the rules on patents and copyrights were later put into other trade deals.
The new NAFTA will also make it more difficult for the member countries to regulate
Facebook and other Internet giants. This is likely to make it easier for Mark Zuckerberg to
spread fake news.
We have no public industrial policy
Because we have a private corporate industrial policy that wants full reign
Even toy block models like
ole pro grass liberal brandishes
Warn what heppens to trade good producing wage rates when
Proximate borders open
to potential products
Built with zero rent earning
raw fingered foreign wage slaves
"... "There's a whole neoliberal agenda," she said, referencing the received free-market wisdom that cutting public budgets spurs economic growth. "And then the way that traditional theory has fomented it or not contested it -- there's been kind of a strange symbiosis between mainstream economic thinking and stupid policies." ..."
"... Dr. Mazzucato takes issue with many of the tenets of the neoclassical economic theory taught in most academic departments: its assumption that the forces of supply and demand lead to market equilibrium, its equation of price with value and -- perhaps most of all -- its relegation of the state to the investor of last resort, tasked with fixing market failure. She has originated and popularized the description of the state as an "investor of first resort," envisioning new markets and providing long-term, or "patient," capital at early stages of development. ..."
"... Emphasizing to policymakers not only the importance of investment, but also the direction of that investment -- "What are we investing in?" she often asks -- Dr. Mazzucato has influenced the way American politicians speak about the state's potential as an economic engine. In her vision, governments would do what so many traditional economists have long told them to avoid: create and shape new markets, embrace uncertainty and take big risks. ..."
Meet the Leftish Economist With a New Story About Capitalism
Mariana Mazzucato wants liberals to talk less about the redistribution of wealth and more
about its creation. Politicians around the world are listening.
By Katy Lederer
Mariana Mazzucato was freezing. Outside, it was a humid late-September day in Manhattan,
but inside -- in a Columbia University conference space full of scientists, academics and
businesspeople advising the United Nations on sustainability -- the air conditioning was on
full blast.
For a room full of experts discussing the world's most urgent social and environmental
problems, this was not just uncomfortable but off-message. Whatever their dress -- suit,
sari, head scarf -- people looked huddled and hunkered down. At a break, Dr. Mazzucato
dispatched an assistant to get the A.C. turned off. How will we change anything, she wondered
aloud, "if we don't rebel in the everyday?"
Dr. Mazzucato, an economist based at University College London, is trying to change
something fundamental: the way society thinks about economic value. While many of her
colleagues have been scolding capitalism lately, she has been reimagining its basic premises.
Where does growth come from? What is the source of innovation? How can the state and private
sector work together to create the dynamic economies we want? She asks questions about
capitalism we long ago stopped asking. Her answers might rise to the most difficult
challenges of our time.
In two books of modern political economic theory -- "The Entrepreneurial State" (2013) and
"The Value of Everything" (2018) -- Dr. Mazzucato argues against the long-accepted binary of
an agile private sector and a lumbering, inefficient state. Citing markets and technologies
like the internet, the iPhone and clean energy -- all of which were funded at crucial stages
by public dollars -- she says the state has been an underappreciated driver of growth and
innovation. "Personally, I think the left is losing around the world," she said in an
interview, "because they focus too much on redistribution and not enough on the creation of
wealth."
Her message has appealed to an array of American politicians. Senator Elizabeth Warren,
Democrat of Massachusetts and a presidential contender, has incorporated Dr. Mazzucato's
thinking into several policy rollouts, including one that would use "federal R & D to
create domestic jobs and sustainable investments in the future" and another that would
authorize the government to receive a return on its investments in the pharmaceutical
industry. Dr. Mazzucato has also consulted with Representative Alexandria Ocasio-Cortez,
Democrat of New York, and her team on the ways a more active industrial policy might catalyze
a Green New Deal.
Even Republicans have found something to like. In May, Senator Marco Rubio of Florida
credited Dr. Mazzucato's work several times in "American Investment in the 21st Century," his
proposal to jump-start economic growth. "We need to build an economy that can see past the
pressure to understand value-creation in narrow and short-run financial terms," he wrote in
the introduction, "and instead envision a future worth investing in for the long-term."
Formally, the United Nations event in September was a meeting of the leadership council of
the Sustainable Development Solutions Network, or S.D.S.N. It's a body of about 90 experts
who advise on topics like gender equality, poverty and global warming. Most of the attendees
had specific technical expertise -- Dr. Mazzucato greeted a contact at one point with,
"You're the ocean guy!" -- but she offers something both broad and scarce: a compelling new
story about how to create a desirable future.
'Investor of first resort'
Originally from Italy -- her family left when she was 5 -- Dr. Mazzucato is the daughter
of a Princeton nuclear physicist and a stay-at-home mother who couldn't speak English when
she moved to the United States. She got her Ph.D. in 1999 from the New School for Social
Research and began working on "The Entrepreneurial State" after the 2008 financial crisis.
Governments across Europe began to institute austerity policies in the name of fostering
innovation -- a rationale she found not only dubious but economically destructive.
"There's a whole neoliberal agenda," she said, referencing the received free-market
wisdom that cutting public budgets spurs economic growth. "And then the way that traditional
theory has fomented it or not contested it -- there's been kind of a strange symbiosis
between mainstream economic thinking and stupid policies."
Dr. Mazzucato takes issue with many of the tenets of the neoclassical economic theory
taught in most academic departments: its assumption that the forces of supply and demand lead
to market equilibrium, its equation of price with value and -- perhaps most of all -- its
relegation of the state to the investor of last resort, tasked with fixing market failure.
She has originated and popularized the description of the state as an "investor of first
resort," envisioning new markets and providing long-term, or "patient," capital at early
stages of development.
In important ways, Dr. Mazzucato's work resembles that of a literary critic or rhetorician
as much as an economist. She has written of waging what the historian Tony Judt called a
"discursive battle," and scrutinizes descriptive terms -- words like "fix" or "spend" as
opposed to "create" and "invest" -- that have been used to undermine the state's appeal as a
dynamic economic actor. "If we continue to depict the state as only a facilitator and
administrator, and tell it to stop dreaming," she writes, "in the end that is what we
get."
As a charismatic figure in a contentious field that does not generate many stars -- she
was recently profiled in Wired magazine's United Kingdom edition -- Dr. Mazzucato has her
critics. She is a regular guest on nightly news shows in Britain, where she is pitted against
proponents of Brexit or skeptics of a market-savvy state.
Alberto Mingardi, an adjunct scholar at the libertarian Cato Institute and director
general of Istituto Bruno Leoni, a free-market think tank, has repeatedly criticized Dr.
Mazzucato for, in his view, cherry-picking her case studies, underestimating economic
trade-offs and defining industrial policy too broadly. In January, in an academic piece
written with one of his Cato colleagues, Terence Kealey, he called her "the world's greatest
exponent today of public prodigality."
Her ideas, though, are finding a receptive audience around the world. In the United
Kingdom, Dr. Mazzucato's work has influenced Jeremy Corbyn, leader of the Labour Party, and
Theresa May, a former Prime Minister, and she has counseled the Scottish leader Nicola
Sturgeon on designing and putting in place a national investment bank. She also advises
government entities in Germany, South Africa and elsewhere. "In getting my hands dirty," she
said, "I learn and I bring it back to the theory."
The 'Mission Muse'
During a break at the United Nations gathering, Dr. Mazzucato escaped the air conditioning
to confer with two colleagues in Italian on a patio. Tall, with a muscular physique, she wore
a brightly colored glass necklace that has become something of a trademark on the economics
circuit. Having traveled to five countries in eight days, she was fighting off a cough.
"In theory, I'm the 'Mission Muse,'" she joked, lapsing into English. Her signature
reference is to the original mission to the moon -- a state-spurred technological revolution
consisting of hundreds of individual feeder projects, many of them collaborations between the
public and private sectors. Some were successes, some failures, but the sum of them
contributed to economic growth and explosive innovation.
Dr. Mazzucato's platform is more complex -- and for some, controversial -- than simply
encouraging government investment, however. She has written that governments and state-backed
investment entities should "socialize both the risks and rewards." She has suggested the
state obtain a return on public investments through royalties or equity stakes, or by
including conditions on reinvestment -- for example, a mandate to limit share buybacks.
Emphasizing to policymakers not only the importance of investment, but also the
direction of that investment -- "What are we investing in?" she often asks -- Dr. Mazzucato
has influenced the way American politicians speak about the state's potential as an economic
engine. In her vision, governments would do what so many traditional economists have long
told them to avoid: create and shape new markets, embrace uncertainty and take big
risks.
... ... ...
Earlier in the day, she pointed at an announcement on her laptop. She had been nominated
for the first Not the Nobel Prize, a commendation intended to promote "fresh economic
thinking." "Governments have woken up to the fact the mainstream way of thinking isn't
helping them," she said, explaining her appeal to politicians and policymakers. A few days
later, she won.
Then she would advocate free banking, like Selgin. Better more efficient banking is a huge
and profitable investment for government.
So before the leftwards jump on her idea of investment, start here and explain why
suddenly, making finance more efficient for everyone is a bad idea.
Or ask our knee jerkers, before they jump on her ideas with all their delusions, why not
invest in dumping the primary dealer system? That is obviously inefficient and generates the
ATM costs we pay. Why not remove that with a sound investment f some sort?
Everything is through the eye of the beholder, for lelftwards it is the wonder of central
planning, for the libertariaturds it is about efficiency via decentralization.
Then comes meetup, and waddya know, each side brings a 200 page insurance contract they
want guaranteed before any efficiency changes are made. The meeting selects business as
normal. We will select business as normal, our economists will approve.
I am thrilled / s at the feeling of fulfillment I, well, feel, that an academic deems the
obvious. It definitely, indicates that we are approaching, wokeness !
Economists are beginning to evolve, again, almost, but not quite capturing the curl of the
real time world.
" There's a whole neoliberal agenda," she said, referencing the received free-market wisdom
that cutting public budgets spurs economic growth. "And then the way that traditional theory
has fomented it or not contested it -- there's been kind of a strange symbiosis between
mainstream economic thinking and stupid policies."
That is a deep vision that needs to be unpacked. My impression of traditional theory is
that it discourages the neoliberal, market deism.
In 2012, when economist Thomas Philippon was looking into some data, something odd caught
his attention.
His homeland, France, was undergoing another revolution, although a much different one: a
revolution in the country's telecommunication market. A new mobile operator, Free, had
entered the market and disrupted it almost overnight. The new operator slashed prices,
offering plans that hadn't been seen before in France.
France's three legacy mobile operators were forced to react and drop their own prices. It
didn't help. In only three months, Free's market share reached 4 percent. At the end of the
following year, its market share tripled. Today, Free controls 15 to 16 percent of the
market, making it France's third largest mobile operator. (If you add the six virtual
operators to the mix -- meaning companies who lease broadband space -- you'll get a total of
10 different mobile operators in a country with a population one-fifth the size of the United
States.)
"Digging deeper into that crystallized everything for me," says Philippon. "It was an
oligopoly based on three legacy carriers that lobbied very hard to prevent anybody from
getting a fourth (mobile) license. For 10 years they were successful. But then, in 2011, the
regulator changed and gave a license [to] Free. It wasn't a technological change or a change
in consumers' taste. It was purely a regulatory decision."
For French consumers, this one decision changed everything. Instead of paying $55 for a
1-gigabyte plan, the new prices for much better plans cost half that. And prices continued to
drop. Today, a Free 60-gigabyte plan costs only $12.
But Philippon wasn't just interested in what the new competition in the French telecom
industry said about French markets. Having lived in the United States since 1999, he compared
the French telecom revolution to the American market. The numbers blew his mind. While in
France the number of mobile operators was rising, in the US the number was getting smaller
(and that number might even decline further, if the planned Sprint-T-Mobile merger goes
through).
The result was a huge price gap between the two countries.
"France went from being much more expensive to much cheaper in two years," he says. "The
change in price was drastic -- a relative price move of 50 percent. In such a big market with
gigantic firms, that's a big change. And it was not driven by technology, it was driven by
pro-competition regulation." He immediately adds, just to emphasize the irony: "It happened
in France of all places, a country that historically had a political system that made sure
there wasn't too much competition. This is not the place where we expected this kind of
outcome."
The opposite was very surprising too: The level of competition in the United States, the
role model of free-market democracy, was declining.
Philippon, an acclaimed professor of finance at the New York University Stern School of
Business, kept pulling that thread. He gathered an overwhelming amount of data on various
markets, took a few steps back to look at the big picture, and then identified a pattern. The
result is "The Great Reversal," his recent book, in which he explores and explains when, why,
and how, as his subtitle puts it, "America Gave Up on Free Markets."
The telecom story is just one of many examples Philippon provides throughout the book of
non-competitive US markets, in which most or all of the power is concentrated in the hands of
a few big companies. It's a situation that makes it almost impossible for new competitors to
enter and lower prices for consumers. The airline market is another example, as is the
pharmaceutical industry, the banking system, and the big tech companies such as Google and
Facebook, who have no real competition in the markets they operate in.
The book's main argument has a refreshing mix of both right- and left-leaning economic
thinking. It goes like this: During the last 20 years, while the European Union has become
much more competitive, the United States has become a paradise for monopolies and oligopolies
-- with a few players holding most of the market share. As US companies grew bigger, they
became politically powerful. They then used their influence over politicians and regulators,
and their vast resources, to skew regulation in their favor.
The fight over net neutrality, to name one example, demonstrates it well.
"Guess who lobbied for that? It's a simple guess -- the people who benefited from it, the
ISP's [internet service providers]. And they are already charging outrageous prices, twice as
high [as] any other developed country," Philippon says.
This growing concentration of power in the hands of a few has affected everything and
everyone. It has inflated prices because consumers have fewer options. Wages are stagnant
because less competition means firms don't have to fight over workers. Financial investment
in new machinery and technology has plummeted because when companies have fewer competitors
they lose the incentive to invest and improve. It has driven CEO compensation up, and
workers' compensation down. It has caused a spike in inequality, which in turn has ignited
social unrest.
If all of this is too much to wrap your head around, Philippon puts a price tag on it:
$5,000 per year. That's the price the median American household pays every year for the lost
competition. That's the cost of the United States becoming a Monopoly Land.
How did this happen? According to Philippon, it's a story with two threads. The European
side of this story happened almost by mistake. The American side, on the contrary, was no
coincidence.
When the European Union was formed in the early 1990s, there was a lot of suspicion
between the member states, namely France and Germany. (Two World Wars tend to have that
effect.) This mistrust birthed pan-European regulators who enjoyed an unprecedented amount of
freedom, more powerful than any of the member countries' governments.
"We did that mostly because we didn't really trust each other very much," he says. Now, 20
years later, "it turns out that this system we created is just a lot more resilient towards
lobbying and bad influences than we thought."
At the same time in the United States, the exact opposite was happening. Adopting a
free-market approach, regulators and legislators chose not to intervene. They didn't block
mergers and acquisitions, and let big companies get bigger.
This created a positive feedback loop: As companies grew stronger, the regulators got
weaker, and more dependent on the companies they are supposed to regulate. Tens of millions
of dollars were channeled into lobbying. The Supreme Court's Citizens United decision gave
corporate money even more political influence.
At some point, big companies started using regulation itself to prevent new competitors
from entering the market.
The result wasn't free markets, but "the opposite -- market capture," says Philippon,
referring to a situation in which the regulator is so weak it depends completely on the
companies it regulates to design regulation.
Philippon is not the only one who's making these claims. A group of economists from the
University of Chicago Booth School of Business holds a similar view. They are called
Neo-Brandeisian, after the late Justice Louis Brandeis, who, a century ago, fought to broaden
antitrust laws. They believe the big tech companies, for example, managed to rig the system,
and fly under current antitrust regulation. They think it is time to break them apart.
But not everyone agrees with Philippon's narrative or his conclusions. Economists like
Edward Conard, author of "The Upside of Inequality," thinks Philippon's claim that big
companies are evidence of less competition is upside down. According to his criticism, it's
exactly the opposite: These companies became big and powerful because they innovate and give
a lot of value to consumers. He also argues that the conclusion that Europe is more
competitive and innovative than the United States is preposterous, given that the biggest
tech companies are American, not European.
Philippon addresses this counterclaim in his book. The United States is one giant market
of English speakers. Theoretically, if you have a good idea for a new product and you can
finance it, you have more than 300 million potential users on day one. In the EU, on the
other hand, there are 28 countries, with residents who speak 24 different languages. It's not
as simple.
Philippon, who by the age of 40 was named one of the top 25 promising economists by the
International Monetary Fund, also differentiates himself from the Chicago school of thought
in one important way: He's not dogmatic, he's pragmatic. Instead of a one-size-fits-all
solution to the problem, he suggests a more nuanced approach. This is exactly what makes his
case both unique and somewhat tricky to grasp. His approach is neither right nor left.
"The idea that free markets and government intervention are opposites, that's bogus. So
half of me agrees with the Chicago School and half disagrees," he says.
"But if you think that you can get to a free market without any scrutiny by the
government, that's crazy. That's simply untrue empirically. We need to make entry easier to
increase competition, that's the objective," he says. "And the way to do so sometimes means
more government intervention."
OK, but how do you do that? According to Philippon, each case is different.
"In some cases it will be by more intervention. Like maybe force Facebook to break from
WhatsApp. And sometimes it will be by less intervention. Kill a bunch of regulations and
requirements for small companies," he says.
The first idea, at least, has caught a lot of public attention during the last year, and
has been a talking point of the presidential campaigns of Senators Bernie Sanders and
Elizabeth Warren. Facebook's CEO Mark Zuckerberg was recorded saying that if Warren wins, it
will "suck for us." Warren's plan for the big tech companies, for example, includes
"reversing mergers," which means uncoupling WhatsApp and Instagram from Facebook. Her plan
would also forbid Amazon being both a marketplace and a vendor at the same time.
But can any of these interventions actually happen? And if so, what would they mean for
American consumers? Those are more complicated questions.
If big tech companies were broken up, Philippon estimates that the average American
consumer won't be affected financially.
"Since people don't pay these companies directly, it won't change the bottom line for the
middle class, it won't have a big impact on people's disposable income," he says.
What would have a tremendous impact on Americans' lives and income is to keep on going
beyond the big tech companies. "We should go after the big ticket items -- telecom,
transport, energy, and healthcare. That's where you want action, but there is much less
bipartisan support for that," he says.
Something similar to the French telecom revolution is still far from happening in the
United States, but the fact that the 2020 campaign is already pushing competition-promoting
ideas back into the public discourse is a reason for cautious optimism, according to
Philippon. Nevertheless, he warns, we should not let this mild optimism mislead us.
"Free markets are like a public good: It is in nobody's interest to protect them.
Consumers are too dispersed and businesses love monopolies," he says. "So to take free
markets for granted, that's just stupid."
(Shaul Amsterdamski is senior economics editor
for Kan, Israel's public broadcasting corporation.)
(Hmmm. Our largest monthly bill is for 'telecom',
from Comcast, for TV, phone & internet service.
There's no competitive offering in our town.)
"...Our largest monthly bill is for 'telecom',
from Comcast, for TV, phone & internet service..."
[I got the same information from the service tech doing the annual clean and test on my
propane fireplace insert yesterday, in reference to his parents though. They were on Verizon
Fios for cable. He thought they should dump cable for a web-TV solution and just use cell
phones. Their bill was over $400/month. Mine is a little over $200/month for the same
service, which in both cases includes land line. In my zip code Verizon does not bundle Fios
with mobile. The only difference that I know is that we have neither any premium channels nor
DVR boxes and I assume that his parents must have both to run up a bill that high. When we
pony up for Fios Gb, then at least for three years our bill will fall below $100/month, then
return to a higher monthly yet if we do not take another new contract after that upgrade
contract ends. Verizon only makes new contracts when new services are added or upgraded.
Customers get next to no benefit for loyalty/retention. We have both Verizon and Comcast
available in our area. I have had both in my present home at different times, but hate
Comcast for failures on their part to provide tall vehicle clearance to pass down my driveway
until forced to do so by the power company whose poles they must use and for a duplicate
billing error where they billed me for two separate addresses and put me into collections for
the one that I never resided at since I never saw that bill or knew of it prior to the first
collections call.]
Bernie Sanders unveils plan to boost broadband
access, break up internet and cable titans https://cnb.cx/34TzaQw
CNBC - Jacob Pramuk - Dec 6
Bernie Sanders unveiled a plan Friday to expand broadband internet access as part of a
push to boost the economy and reduce corporate power over Americans.
In his sprawling "High-Speed Internet for All" proposal, the Vermont senator and
Democratic presidential candidate calls to treat internet like a public utility. His campaign
argues that the internet should not be a "price gouging profit machine" for companies such as
Comcast, AT&T and Verizon.
Sanders' plan would create $150 billion in grants and aid for local and state governments
to build publicly owned broadband networks as part of the Green New Deal infrastructure
initiative. The total would mark a massive increase over current funding for broadband
development initiatives. The proposal would also break up what the campaign calls "internet
service provider and cable monopolies," stop service providers from offering content and end
what it calls "anticompetitive mergers."
Sanders and his rivals for the 2020 Democratic presidential nomination have pushed to
boost high-speed internet access for rural and low-income Americans, saying it has become a
necessity to succeed in school and business. The self-proclaimed democratic socialist has
unveiled numerous plans to root out corporate influence as he runs near the top of a jammed
primary field. ...
Aa excellent article that brings no new ideas to the debate but updates the debate to today.
One thing economist Thomas Philippon did not mention is that voters must turn out the
elected and get new ones who will vote to create more and vigorous competition instead of
oligopoly.
"... "There's a whole neoliberal agenda," she said, referencing the received free-market wisdom that cutting public budgets spurs economic growth. "And then the way that traditional theory has fomented it or not contested it -- there's been kind of a strange symbiosis between mainstream economic thinking and stupid policies." ..."
"... Dr. Mazzucato takes issue with many of the tenets of the neoclassical economic theory taught in most academic departments: its assumption that the forces of supply and demand lead to market equilibrium, its equation of price with value and -- perhaps most of all -- its relegation of the state to the investor of last resort, tasked with fixing market failure. She has originated and popularized the description of the state as an "investor of first resort," envisioning new markets and providing long-term, or "patient," capital at early stages of development. ..."
Meet the Leftish Economist With a New Story About Capitalism
Mariana Mazzucato wants liberals to talk less about the redistribution of wealth and more about
its creation. Politicians around the world are listening.
By Katy Lederer
Mariana Mazzucato was freezing. Outside, it was a humid late-September day in Manhattan, but
inside -- in a Columbia University conference space full of scientists, academics and
businesspeople advising the United Nations on sustainability -- the air conditioning was on
full blast.
For a room full of experts discussing the world's most urgent social and environmental
problems, this was not just uncomfortable but off-message. Whatever their dress -- suit, sari,
head scarf -- people looked huddled and hunkered down. At a break, Dr. Mazzucato dispatched an
assistant to get the A.C. turned off. How will we change anything, she wondered aloud, "if we
don't rebel in the everyday?"
Dr. Mazzucato, an economist based at University College London, is trying to change
something fundamental: the way society thinks about economic value. While many of her
colleagues have been scolding capitalism lately, she has been reimagining its basic premises.
Where does growth come from? What is the source of innovation? How can the state and private
sector work together to create the dynamic economies we want? She asks questions about
capitalism we long ago stopped asking. Her answers might rise to the most difficult challenges
of our time.
In two books of modern political economic theory -- "The Entrepreneurial State" (2013) and
"The Value of Everything" (2018) -- Dr. Mazzucato argues against the long-accepted binary of an
agile private sector and a lumbering, inefficient state. Citing markets and technologies like
the internet, the iPhone and clean energy -- all of which were funded at crucial stages by
public dollars -- she says the state has been an underappreciated driver of growth and
innovation. "Personally, I think the left is losing around the world," she said in an
interview, "because they focus too much on redistribution and not enough on the creation of
wealth."
Her message has appealed to an array of American politicians. Senator Elizabeth Warren,
Democrat of Massachusetts and a presidential contender, has incorporated Dr. Mazzucato's
thinking into several policy rollouts, including one that would use "federal R & D to
create domestic jobs and sustainable investments in the future" and another that would
authorize the government to receive a return on its investments in the pharmaceutical industry.
Dr. Mazzucato has also consulted with Representative Alexandria Ocasio-Cortez, Democrat of New
York, and her team on the ways a more active industrial policy might catalyze a Green New
Deal.
Even Republicans have found something to like. In May, Senator Marco Rubio of Florida
credited Dr. Mazzucato's work several times in "American Investment in the 21st Century," his
proposal to jump-start economic growth. "We need to build an economy that can see past the
pressure to understand value-creation in narrow and short-run financial terms," he wrote in the
introduction, "and instead envision a future worth investing in for the long-term."
Formally, the United Nations event in September was a meeting of the leadership council of
the Sustainable Development Solutions Network, or S.D.S.N. It's a body of about 90 experts who
advise on topics like gender equality, poverty and global warming. Most of the attendees had
specific technical expertise -- Dr. Mazzucato greeted a contact at one point with, "You're the
ocean guy!" -- but she offers something both broad and scarce: a compelling new story about how
to create a desirable future.
'Investor of first resort'
Originally from Italy -- her family left when she was 5 -- Dr. Mazzucato is the daughter of
a Princeton nuclear physicist and a stay-at-home mother who couldn't speak English when she
moved to the United States. She got her Ph.D. in 1999 from the New School for Social Research
and began working on "The Entrepreneurial State" after the 2008 financial crisis. Governments
across Europe began to institute austerity policies in the name of fostering innovation -- a
rationale she found not only dubious but economically destructive.
"There's a whole neoliberal agenda," she said, referencing the received free-market
wisdom that cutting public budgets spurs economic growth. "And then the way that traditional
theory has fomented it or not contested it -- there's been kind of a strange symbiosis between
mainstream economic thinking and stupid policies."
Dr. Mazzucato takes issue with many of the tenets of the neoclassical economic theory
taught in most academic departments: its assumption that the forces of supply and demand lead
to market equilibrium, its equation of price with value and -- perhaps most of all -- its
relegation of the state to the investor of last resort, tasked with fixing market failure. She
has originated and popularized the description of the state as an "investor of first resort,"
envisioning new markets and providing long-term, or "patient," capital at early stages of
development.
In important ways, Dr. Mazzucato's work resembles that of a literary critic or rhetorician
as much as an economist. She has written of waging what the historian Tony Judt called a
"discursive battle," and scrutinizes descriptive terms -- words like "fix" or "spend" as
opposed to "create" and "invest" -- that have been used to undermine the state's appeal as a
dynamic economic actor. "If we continue to depict the state as only a facilitator and
administrator, and tell it to stop dreaming," she writes, "in the end that is what we get."
As a charismatic figure in a contentious field that does not generate many stars -- she was
recently profiled in Wired magazine's United Kingdom edition -- Dr. Mazzucato has her critics.
She is a regular guest on nightly news shows in Britain, where she is pitted against proponents
of Brexit or skeptics of a market-savvy state.
Alberto Mingardi, an adjunct scholar at the libertarian Cato Institute and director general
of Istituto Bruno Leoni, a free-market think tank, has repeatedly criticized Dr. Mazzucato for,
in his view, cherry-picking her case studies, underestimating economic trade-offs and defining
industrial policy too broadly. In January, in an academic piece written with one of his Cato
colleagues, Terence Kealey, he called her "the world's greatest exponent today of public
prodigality."
Her ideas, though, are finding a receptive audience around the world. In the United Kingdom,
Dr. Mazzucato's work has influenced Jeremy Corbyn, leader of the Labour Party, and Theresa May,
a former Prime Minister, and she has counseled the Scottish leader Nicola Sturgeon on designing
and putting in place a national investment bank. She also advises government entities in
Germany, South Africa and elsewhere. "In getting my hands dirty," she said, "I learn and I
bring it back to the theory."
The 'Mission Muse'
During a break at the United Nations gathering, Dr. Mazzucato escaped the air conditioning
to confer with two colleagues in Italian on a patio. Tall, with a muscular physique, she wore a
brightly colored glass necklace that has become something of a trademark on the economics
circuit. Having traveled to five countries in eight days, she was fighting off a cough.
"In theory, I'm the 'Mission Muse,'" she joked, lapsing into English. Her signature
reference is to the original mission to the moon -- a state-spurred technological revolution
consisting of hundreds of individual feeder projects, many of them collaborations between the
public and private sectors. Some were successes, some failures, but the sum of them contributed
to economic growth and explosive innovation.
Dr. Mazzucato's platform is more complex -- and for some, controversial -- than simply
encouraging government investment, however. She has written that governments and state-backed
investment entities should "socialize both the risks and rewards." She has suggested the state
obtain a return on public investments through royalties or equity stakes, or by including
conditions on reinvestment -- for example, a mandate to limit share buybacks.
Emphasizing to policymakers not only the importance of investment, but also the direction of
that investment -- "What are we investing in?" she often asks -- Dr. Mazzucato has influenced
the way American politicians speak about the state's potential as an economic engine. In her
vision, governments would do what so many traditional economists have long told them to avoid:
create and shape new markets, embrace uncertainty and take big risks.
Inside the conference, the news was uniformly bleak. Pavel Kabat, the chief scientist of the
World Meteorological Organization, lamented the breaking of global temperature records and said
that countries would have to triple their current Paris-accord commitments by 2030 to have any
hope of staying below a critical warming threshold. A panel on land use and food waste noted
that nine species account for two-thirds of the world's crop production, a dangerous lack of
agricultural diversity. All the experts appeared dismayed by what Jeffrey Sachs, the S.D.S.N.'s
director, described as the "crude nationalism" and "aggressive anti-globalization" ascendant
around the world.
"We absolutely need to change both the narrative, but also the theory and the practice on
the ground," Dr. Mazzucato told the crowd when she spoke on the final expert panel of the day.
"What does it mean, actually, to create markets where you create the demand, and really start
directing the investment and the innovation in ways that can help us achieve these goals?"
Earlier in the day, she pointed at an announcement on her laptop. She had been nominated for
the first Not the Nobel Prize, a commendation intended to promote "fresh economic thinking."
"Governments have woken up to the fact the mainstream way of thinking isn't helping them," she
said, explaining her appeal to politicians and policymakers. A few days later, she won.
Reply Thursday, November 28, 2019 at 12:05 PM
"... Writing in the 1830s, as the Industrial Revolution gathered pace, Honoré de Balzac anticipated the broader social concern: "The secret of great fortunes without apparent cause is a crime that has been forgotten, because it was properly carried out." Or, in the more popular paraphrase: behind every great fortune lies a great crime. ..."
"... In recent decades, this corporate lobbying has had two main effects. First, by erecting entry barriers to existing sectors, it protects incumbents and lowers their effective tax rates. This is a deadweight loss – a pure drag on economic growth that limits opportunities for everyone who is not already an oligarch. ..."
"... As U.S. public finances are eroded by oligarchy, so is the ability to fund essential infrastructure, improvements in education, and the kind of breakthrough science that brought America to this point. ..."
Our billionaire problem is getting worse. Any market-oriented economy creates
opportunities for new fortunes to be built, including through innovation. More innovation is
likely to take place where fewer rules encumber entrepreneurial creativity. Some of this
creativity may lead to processes and products that are actually detrimental to public
welfare.
Unfortunately, by the time the need for legislation or regulation becomes apparent, the
innovators have their billions – and they can use that money to protect their
interests.
This billionaire problem is not new. Every epoch, dating at least from Roman times,
produces versions of it whenever some shift in market structure or geopolitics creates an
opportunity for fortunes to be built quickly.
Writing in the 1830s, as the Industrial Revolution gathered pace, Honoré de
Balzac anticipated the broader social concern: "The secret of great fortunes without apparent
cause is a crime that has been forgotten, because it was properly carried out." Or, in the
more popular paraphrase: behind every great fortune lies a great crime.
Prominent historical examples include the British East India Company, the Europeans who
built vast fortunes based on African slave labor in the West Indies, and coal mine
owners.
All became rich fast, and then used their political clout to get what they wanted,
including impunity for horrendous abuses. At their peak in the nineteenth century, railway
interests held sway over many or perhaps even most members of the British parliament.
The United States has long exhibited a particularly potent strain of the billionaire
problem. This is partly because America's founders, in their pre-industrial innocence, could
not imagine that money would capture politics to the extent that it has (or that was fully
apparent just a few decades later). Moreover, U.S. leaders were long willing to let private
enterprise take on new projects that elsewhere fell into the hands of the state.
The German post office, for example, built one of the most extensive and efficient
telegraph systems in the world. Samuel Morse urged Congress to do the same (or better). But
U.S. telegraph communication was instead developed privately – as was the telephone
system that followed, all of iron and steel, the entire railroad network, and just about
every other component of the early industrial economy.
When the U.S. government did become involved in economic activity, it was mostly to open
up new frontiers – creating more opportunity for individuals and private business.
In the aftermath of World War II, Vannevar Bush – a Republican who was also a top
adviser to President Franklin D. Roosevelt – cleverly argued that science represented
the next frontier, and hence constructed a winning political argument for the government to
act as a catalyst.
As Jonathan Gruber and I have argued recently in our book Jump-Starting America, the
post-war federal government's strategic investments in basic science spurred remarkable
private-sector innovation – including productivity gains and widely shared increases in
wages. Vast new fortunes were created.
U.S. President Donald Trump speaks to former New York City Mayor Michael Bloomberg. /VCG
Photo
The political consequences of America's post-war private-sector boom were felt within a
generation, and they were not always positive. From the 1960s, the U.S. experienced growing
anti-tax sentiment, strong pressure for deregulation (including for the financial sector),
and a lot more corporate money pouring into politics through every possible avenue.
In recent decades, this corporate lobbying has had two main effects. First, by
erecting entry barriers to existing sectors, it protects incumbents and lowers their
effective tax rates. This is a deadweight loss – a pure drag on economic growth that
limits opportunities for everyone who is not already an oligarch.
As U.S. public finances are eroded by oligarchy, so is the ability to fund essential
infrastructure, improvements in education, and the kind of breakthrough science that brought
America to this point.
Some of America's billionaires earn kudos for their philanthropy. At the same time, most
of them adopt a dog-in-the-manger attitude throughout their business operations –
digging deeper moats to protect profits or simply destroying smaller business at every
opportunity.
There is a second effect, which is more nuanced. In some entirely new sectors,
particularly in the digital domain, entry was possible at least during an early phase.
The entrepreneurs who built the first Internet companies were not able to put up effective
entry barriers – hence the runaway success (and greater billions) of more recent
companies such as Facebook, Amazon, and Uber.
But now the controlling shareholders of these new behemoths operate pretty much in the
same way as Andrew Carnegie, John D. Rockefeller, and the original J.P. Morgan once did. They
use their money to buy influence and resist any kind of reasonable restraint on their
anti-competitive and anti-worker behavior – even if it undermines democratic
institutions.
We will always have billionaires. Ex post regulation and higher rates of taxation are
appealing today but, looking forward, will they prove sufficient in a political system that
allows individuals to spend as much as they like to get whatever they want (and repeal
whatever they hate)? It's time for a new approach, as Gruber and I propose.
Big profits follow from big new ideas. That's why federal science funding should be
designed to include upside participation in the enterprises that will be created. The public
deserves much more direct participation in those profits. And the billionaires should have to
make do with fewer billions.
"The United States has long exhibited a particularly potent strain of the billionaire
problem. This is partly because America's founders, in their pre-industrial innocence, could
not imagine that money would capture politics to the extent that it has (or that was fully
apparent just a few decades later). "
A romanticization of the founders? I seem to recall their motivation was to counter revolt
against the galloping egalitarianism of the States, and incidentally, the guys in the room
were basically the billionaires of the day.
His subsequent complaints seem right on though, and pointing out the telegraph situation,
which rightly should have been a Post Office operation, is especially appreciated.
A romanticization of the founders? I seem to recall their motivation was to counter revolt
against the galloping egalitarianism of the States, and incidentally, the guys in the room
were basically the billionaires of the day.
[Simon Johnson's] subsequent complaints seem right on though, and pointing out the
telegraph situation, which rightly should have been a Post Office operation, is especially
appreciated.
POTUS races can be effectively
Operated with
Little people funded campaigns
Bernie proved that
And Liz
Yes spreading too thin
fielding 435 house races at once
or 34 Senate races etc
Big bucks will prevail over all
But winn8ng evening enough
It requires sustainable
Solid majorities
And protracted continuity
like the new deal maintained
Why ?
The bigger problem is the pre existing
State system
Progressives might get elected
to change The show
But
Deep Sam will resist mightily
Capitalism is a system
.of organized social production
That produces and reproduces
Along with itself
Typical human consequences
Among those typical human consequences
"... The existence of the bubble and the fact that it was driving the economy could both be easily determined from regularly published government data, yet the vast majority of economists were surprised when the bubble burst and it gave us the Great Recession. This history should lead us to ask what other simple things economists are missing. ..."
Simple Economics that Most Economists Don't Know
By Dean Baker
Economists are continually developing new statistical techniques, at least some of which
are useful for analyzing data in ways that allow us to learn new things about the world.
While developing these new techniques can often be complicated, there are many simple things
about the world that economists tend to overlook.
The most important example here is the housing bubble in the last decade. It didn't
require any complicated statistical techniques to recognize that house prices had sharply
diverged from their long-term pattern, with no plausible explanation in the fundamentals of
the housing market.
It also didn't require sophisticated statistical analysis to see the housing market was
driving the economy. At its peak in 2005 residential construction accounted for 6.8 percent
of GDP. This compares to a long-run average that is close to 4.0 percent. Consumption was
also booming, as people spent based on the bubble generated equity in their homes, pushing
the savings rate to a record low.
The existence of the bubble and the fact that it was driving the economy could both be
easily determined from regularly published government data, yet the vast majority of
economists were surprised when the bubble burst and it gave us the Great Recession. This
history should lead us to ask what other simple things economists are missing.
For this holiday season, I will give three big items that are apparently too simple for
economists to understand.
1) Profit shares have not increased much -- While there has been some redistribution in
before-tax income shares from labor to capital, it at most explains a small portion of the
upward redistribution of the last four decades. Furthermore, shares have been shifting back
towards labor in the last four years.
2) Returns to shareholders have been low by historical standards -- It is often asserted
that is an era of shareholder capitalism in which companies are being run to maximize returns
to shareholders. In fact, returns to shareholders have been considerably lower on average
than they were in the long Golden Age from 1947 to 1973.
3) Patent and copyright rents are equivalent to government debt as a future burden –
The burden that we are placing on our children through the debt of the government is a
frequent theme in economic reporting. However, we impose a far larger burden with
government-granted patent and copyright monopolies, although this literally never gets any
attention in the media.
To be clear, none of these points are contestable. All three can all be shown with widely
available data and/or basic economic logic. The fact that they are not widely recognized by
people in policy debates reflects the laziness of economists and people who write about
economic policy.
Profit Shares
It is common to see discussions where it is assumed that there has been a large shift from
wages to profits, and then a lot of head-scratching about why this occurred. In fact, the
shift from wages to profits has been relatively modest and all of it occurred after 2000,
after the bulk of the upward redistribution of income had already taken place.
If we just compare end points, the labor share of net domestic product was 64.0 percent in
2019, a reduction of 1.6 percentage points from its 65.6 percent share in 1979, before the
upward redistribution began. If, as a counter-factual, we assume that the labor share was
still at its 1979 level it would mean that wages would be 2.5 percent higher than they are
now. That is not a trivial effect, but it only explains a relatively small portion of the
upward redistribution over the last four decades.
It is also worth noting the timing of this shift in shares. There was no change in shares
from 1979 to 2000, the point at which most of the upward redistribution to the richest one
percent had already taken place. The shift begins in the recovery from the 2001
recession.
This was the period of the housing bubble. The reason why this matters is that banks and
other financial institutions were recording large profits on the issuance of mortgages that
subsequently went bad, leading to large losses in the years 2008-09. This means that a
substantial portion of the profits that were being booked in the years prior to the Great
Recession were not real profits.
It would be as though companies reported profits based on huge sales to a country that
didn't exist. Such reporting would make profits look good when the sales were being booked,
but then would produce large losses when the payments for the sales did not materialize,
since the buyer did not exist. It's not clear that when the financial industry books phony
profits it means there was a redistribution from labor to capital.[1]
There clearly was a redistribution from labor to capital in the weak labor market
following the Great Recession. Workers did not have enough bargaining power to capture any of
the gains from productivity growth in those years. That has been partially reversed in the
last four years as the labor share of net domestic income has risen by 2.4 percentage
points.[2] This still leaves some room for further increases to make up for the drop in labor
share from the Great Recession, but it does look as though the labor market is operating as
we would expect.
Returns to Shareholders Lag in the Period of Shareholder Capitalism
It is common for people writing on economics, including economists, to say that companies
have been focused on returns to shareholders in the last four decades in a way that was not
previously true. The biggest problem with this story is that returns to shareholders have
actually been relatively low in the last two decades.
If we take the average real rate of return over the last two decades, it has been 3.9
percent. That compares to rates of more than 8.0 percent in the fifties and sixties. Even
this 3.9 percent return required a big helping hand from the government in the form a
reduction in the corporate income tax rate from 35 percent to 21 percent.
The figure for the last two decades is somewhat distorted by the fact that we were
reaching the peak of the stock bubble in the late 1990s, but the story is little changed if
we adjust for this fact. If we take the average real return from July of 1997, when the price
to earnings ratio was roughly the same as it is now, it is still just 5.7 percent, well below
the Golden Age average when companies were supposedly not being run to maximize shareholder
value.
It is striking that this drop in stock returns is so little noticed and basically does not
feature at all in discussions of the economy. Back in the late 1990s, it was nearly
universally accepted in public debates that stocks would provide a 7.0 percent real return on
average in public debates.
This was most evident in debates on Social Security, where both conservatives and liberals
assumed that the stock market would provide 7.0 percent real returns. Conservatives, like
Martin Feldstein, made this assumption as part of their privatization plans. Liberal
economists made the same assumption in plans put forward by the Clinton administration and
others to shore up the Social Security trust fund by putting a portion of it in the stock
market. The Congressional Budget Office even adopted the 7.0 percent real stock returns
assumption in its analysis of various Social Security reform proposals that called for
putting funds in the stock market.
Given the past history on stock returns and the widely held view that returns would
continue to average close to 7.0 percent over the long-term, the actual performance of stock
returns over the last two decades looks pretty disappointing from shareholders' perspective.
It certainly does not look like corporations are being run for their benefit, or if so, top
executives are doing a poor job.
One of the obvious factors depressing returns has been the extraordinary run up in price
to earnings ratios. A high price to earnings ratio (PE) effectively means that shareholders
have to pay a lot of money for a dollar in corporate profits. When PEs were lower, in the
1950s and 1960s, dividends yields were in the range of 3.0 -5.0 percent. In the recent years
they have been hovering near 2.0 percent. When the PE is over 30, as is now the case, paying
out a dividend of even 3.0 percent would essentially mean paying out all the company's
profits as dividends. Clearly that cannot happen, or at least not on a sustained basis.
While shareholders have not done well by historical standards in recent decades, CEO pay
has soared, with the ratio of the pay of CEOs to ordinary workers going from 20 or 30 to 1 in
the 1960s and 1970s, to 200 or 300 to 1 at present. There is a story that could reconcile
soaring CEO pay with historically low stock returns.
Corporations have increasingly turned to share buybacks as an alternative to dividends for
paying out money to shareholders. The process of buying back shares would drive up share
prices. Part of this is almost definitional, with fewer shares outstanding, the price per
share should go up. If buybacks push up share prices enough to raise the price to earnings
ratio, then in principle other investors should sell stock to bring the PE back to its prior
level. But if this doesn't happen, then buybacks could increase PEs.
That would of course imply huge irrationality in the stock market, but anyone who lived
through the 1990s stock bubble and the housing bubble in the last decade knows that large
investors can be exceedingly irrational for long periods of time. Anyhow, if share buybacks
do raise PEs there would be a clear story whereby CEOs could drive up their own pay, which
typically is largely in stock options, to the detriment of future shareholders, which would
explain both soaring CEO pay and declining returns to shareholders.
Whether this story of share buybacks raising PE is accurate would require some serious
research (I'd welcome references, if anyone has them), but what is beyond dispute is that the
last two decades have provided shareholders with relatively low returns. That seems hard to
reconcile with the often repeated story about this being a period of shareholder
capitalism.
Patents and Copyright Monopolies Are Implicit Government Debt
There is a whole industry dedicated to highlighting the size and growth of the government
debt, largely funded by the late private equity billionaire Peter Peterson. The leading news
outlets feel a need to regularly turn to the Peterson funded outfits to give us updates on
the size of the debt.
When presenting the horror story of a $20 trillion debt and the burden it will impose on
our children, there is never any mention of the burden created by patent and copyright
monopolies. This is an inexcusable inconsistency.
Patent and copyright monopolies are mechanisms that the government uses to pay for
services that are alternatives to direct spending. For example, instead of granting drug
companies patent monopolies and software developers copyright monopolies, the government
could just pay directly for the research and creative work that was the basis for these
monopolies. There are arguments as to why these monopolies might be better mechanisms than
direct funding, but these arguments don't change the fact they are mechanisms the government
uses for paying for services.
While we keep careful accounting of the direct spending, we pretend the implicit spending
by granting patent and copyright monopolies does not exist. This makes zero sense, especially
given the size of the rents being created by these monopolies.
In the case of prescription drugs alone, we will spend close to $400 billion (1.8 percent
of GDP) this year above the free market price, due to patent protections and other monopolies
granted by the federal government. This is considerably more than the $330 billion in
interest that the Congressional Budget Office projected we would spend on the $16.6 trillion
in publicly held debt in 2019.[3]
And this figure is just a fraction of the total rents from patent and copyright
monopolies, which would include most of the payments for medical equipment, computer software
and hardware, and recorded music and video material. Since these payments dwarf the size of
interest payments on the debt, it is difficult to understand how anyone concerned about the
burdens the government was creating could ignore patents and copyrights, while harping on
interest on the debt.
As I have often argued there are good reasons, especially in the case of prescription
drugs, for thinking that direct funding would be a more efficient mechanism than patent
monopolies. In the case of prescription drugs, direct funding would mean that all findings
would be immediately available to all researchers worldwide. If drugs were sold at free
market prices, it would no longer be a struggle to find ways to pay for them. And, we would
take away the incentive to push drugs in contexts where they are not appropriate, as happened
with the opioid crisis. (See "Rigged: How Globalization and the Rules of the Modern Economy
Were Structured to Make the Rich Richer," for a fuller discussion - it's free. * )
While the relative merits of patent/copyright monopolies and direct funding can be
debated, the logical point, that these monopolies are an implicit form of government debt,
cannot be. It shows the incredibly low quality of economic debate that this fact is not
widely recognized.
The Prospect for Simple Facts and Logic Entering Economic Debate in the Next Decade
The three issues noted here are already pretty huge in terms of our understanding of the
economy. The people who write in a wide range of areas should be aware of them, but with few
exceptions, they are not.
Unfortunately, that situation is not likely to change any time soon for a simple economic
reason, there is no incentive for people who write on economic issues to give these points
serious attention. They can continue to draw paychecks and get grants for doing what they are
doing. Why should they spend time addressing facts and logic that require they think
differently about the world?
As has been noted many times, there is no real consequence to economists and people
writing about the economy for being wrong. A custodian who doesn't clean the toilet gets
fired, but an economist who missed the housing bubble whose collapse led to the Great
Recession gets the "who could have known?" amnesty.
Given this structure of incentives, we should assume that economists and others who write
on economics will continue to ignore some of the most basic facts about the economy. That is
what economics tells us.
[1] Since income is supposed to be matched by output in the GDP accounts, the
corresponding phony entry on the output side would be the loans that subsequently went bad.
These loans were counted as a service when they were issued. Arguably, this was not accurate
accounting.
[2] This rise in labor share appears in the net domestic income calculation, but not in
the net domestic product figure. The reason is that there has been a sharp drop in the size
of the statistical discrepancy over the last four years, as output side GDP now exceeds the
income side measure. It is common to assume that the true figure lies somewhere in the
middle, which would mean the increase in labor share is likely less the 2.4 percentage points
calculated on the income side.
[3] This subtracts out the $50 billion in interest payments remitted from the Federal
Reserve Board.
This simple conception generalized deans
Bean hunt for rents
How might one do this
Well first make up a rate of interest
And take a system wide wage snap shot
From mines oceans forests and fields
Thru factories warehouses ultilities
boats and trains
To barber shops malt shops and convenience stores
Mark up the wage cells of your matrix
By your invented rate of interest
Now compare this vector to the 've tor of actual prices
You get a vector of rents aka profits of enterprise and residuals
"... "Fifty years of shareholder primacy," wrote the Financial Times, "has fostered short-termism and created an environment of popular distrust of big business." ..."
"... The rise of stock options to compensate corporate managers entrenched shareholder value by aligning the interests of managers and shareholders. Companies began sacrificing productive investments, environmental protections, and worker security to ensure shareholder returns were maximised. The fear of stock market verdicts on quarterly reports left them no choice. ..."
"... This account fits a widespread belief that financiers and rentiers mangled the postwar golden era of capitalism. More importantly, it suggests a simple solution: liberate companies from the demands of shareholders. Freed from the short-term pursuit of delivering shareholder returns, companies could then return to long-term plans, productive investments, and higher wages. ..."
"... In the 1960s, a group of firms called the conglomerates were pioneering many of the practices that later became associated with the shareholder revolution: aggressive mergers, divestitures, Leverage buy-outs (LBOs), and stock repurchasing. ..."
"... These firms, such as Litton Industries, Teledyne and LTV revolutionised corporate strategy by developing new techniques to systematically raise money from financial markets. They wheeled and dealed their divisions and used them to tap financial markets to finance further predatory acquisitions. Instead of relying on profits from productive operations, they chased speculative transactions on financial markets to grow. ..."
"... With fortunes to be made and lost, no manager could ignore the stock market. They became increasingly concerned with their position on financial markets. It was in this context that corporate capitalism first spoke of the desire to 'maximise shareholder value'. While sections of the corporate establishment were put on the defensive, the main reason for this was not that shareholders imposed their preferences on management. Instead, it was competitor managers using the shareholder discourse as a resource to expand and gain control over other firms. Capital markets became the foundation of a new form of financialised managerial power. ..."
"... Third, the notion of shareholder primacy helped to offload managerial responsibility. An amorphous and often anonymous 'shareholder pressure' became the explanation for all manner of managerial malpractice. Managers lamented the fact they had no choice but to disregard workers and other stakeholders because of shareholder power. Rhetorically, shareholders were deemed responsible for corporate problems. Yet in practice, managers, more often than not, enrolled shareholders into their own projects, using the newly-formed alliance with shareholders to pocket huge returns for themselves. ..."
"... Amorphous? Anonymous? Anybody who faced one of Milken's raiders, or paid Icahn's Greenmail, would disagree. Nelson Putz, er, Peltz just forced P&G to start eating into the foundation of the business to feed his greed. There's nothing amorphous or anonymous about activist shareholders, especially when they take over a company and start carving it up like a Thanksgiving turkey. ..."
"... Corporations are artificial creations of the state. They exist in their current form under a complex series of laws and regulations, but with certain privileges, such as Limited Liability Corporations. It is assumed that these creatures will enhance economic activity if they are given these privileges, but there is no natural law, such as gravity, that says these laws and regulations need to exist in their current form. They can be changed at will be legislatures. ..."
"... The semantics of "shareholder primacy" are problematic. The word "shareholder" in this formula echoes the kind problems that whirl around a label like "farmer". ..."
"... I believe "shareholder primacy" is just one of many rhetorical tools used to argue for the mechanisms our Elites constructed so they could loot Corporate wealth. There is no misunderstanding involved. ..."
"... This fits within a Marxist analysis as the material conditions spurred the ideological justifications of the conditions, not the ideology spurring the conditions. ..."
"... I think about stock markets as separate from companies and I'm wrong. Each of the stock exchanges I have heard of started off when 4-5 local companies invested a few thousand each in renting a building and a manager to run an exchange hoping it would attract investment, promote their shares and pay for itself. ..."
By Sahil Jai Dutta, a lecturer in political economy at the University of Goldsmiths, London and Samuel Knafo, a Senior Lecturer
in the Department of International Relations at the University of Sussex. Originally published at the
PERC blog
In the late 1960s, a young banker named Joel Stern was working on a project to transform corporate management. Stern's hunch was
that the stock market could help managers work out how their strategies were performing. Simply, if management was effective, demand
for the firm's stock would be high. A low price would imply bad management.
What sounds obvious now was revolutionary at the time. Until then profits were the key barometer of success. But profits were
a crude measure and easy to manipulate. Financial markets, Stern felt, could provide a more precise measure of the value of management
because they were based on more 'objective' processes, beyond the firm's direct control. The value of shares, he believed, represented
the market's exact validation of management. Because of this, financial markets could help managers determine what was working and
what was not.
In doing this, Stern laid the foundation for a 'shareholder value' management that put financial markets at the core of managerial
strategy.
Stern would probably never have imagined that these ideas would 50 years later be castigated as a fundamental threat to the future
of liberal capitalism. In recent times everyone from the
Business Roundtable group of global
corporations, to the Financial Times
, to the British Labour Party has lined
up to condemn the shareholder ideology.
"Fifty years of shareholder primacy," wrote the Financial Times, "has fostered short-termism and created an environment
of popular distrust of big business."
It is not the first time Stern's creation has come under fire. A decade ago Jack Welsh, former CEO of General Electric declared
shareholder value " probably the dumbest
idea in the world ". And 15 years before then, British political commentator Will Hutton, among others, found paperback fame
with his book The State We're In preaching much the same message.
To critics, the rise of shareholder value is a
straightforward story , that has been told
over and over again.
Following a general crisis of postwar profitability in the late 1970s, corporate managers came under fire from disappointed shareholders
complaining about declining returns. Shareholder revolts forced managers to put market capitalisation first. The rise of stock
options to compensate corporate managers entrenched shareholder value by aligning the interests of managers and shareholders. Companies
began sacrificing productive investments, environmental protections, and worker security to ensure shareholder returns were maximised.
The fear of stock market verdicts on quarterly reports left them no choice.
This account fits a widespread belief that financiers and
rentiers mangled the postwar golden era of capitalism. More importantly, it suggests a simple solution: liberate companies from
the demands of shareholders. Freed from the short-term pursuit of delivering shareholder returns, companies could then return to
long-term plans, productive investments, and higher wages.
In two recent
articles , we have argued that this
critique of shareholder value has always been based on a misunderstanding. Stern and the shareholder value consultants did not aim
to put shareholders first. They worked to empower management. Seen in this light, the history of the shareholder value ideology appears
differently. And it calls for alternative political responses.
To better understand Stern's ideas, it is important to grasp the broader context in which he was writing. In the 1960s, a
group of firms called the conglomerates were pioneering many of the practices that later became associated with the shareholder revolution:
aggressive mergers, divestitures, Leverage buy-outs (LBOs), and stock repurchasing.
These firms, such as Litton Industries, Teledyne and LTV revolutionised corporate strategy by developing new techniques to
systematically raise money from financial markets. They wheeled and dealed their divisions and used them to tap financial markets
to finance further predatory acquisitions. Instead of relying on profits from productive operations, they chased speculative transactions
on financial markets to grow.
These same tactics were later borrowed by the 1980s corporate raiders, many of which were in fact old conglomerators from the
1960s. The growing efficiency with which these raiders captured undervalued firms on the stock market and ruthlessly sold off their
assets to finance further acquisitions put corporate America on alert.
With fortunes to be made and lost, no manager could ignore the stock market. They became increasingly concerned with their
position on financial markets. It was in this context that corporate capitalism first spoke of the desire to 'maximise shareholder
value'. While sections of the corporate establishment were put on the defensive, the main reason for this was not that shareholders
imposed their preferences on management. Instead, it was competitor managers using the shareholder discourse as a resource to expand
and gain control over other firms. Capital markets became the foundation of a new form of financialised managerial power.
These changes made the approach of management consultants championing shareholder value attractive. The firm founded by Stern
and his business partner Bennett Stewart III took advantage of the situation. They sold widely their ideas about financial markets
as a guideline for corporate strategy to firms looking to thrive in this new environment.
As the discourse and tools of shareholder value took hold, they served three distinct purposes. First, they provided accounting
templates for managerial strategies and a means to manage a firm's standings on financial markets. The first and most famous metric
for assessing just how much value was being created for shareholders was one Stern himself helped develop, Economic Value Added (EVA).
Second, they became a powerful justification for the idea that managers should be offered share options. This was in fact an old
idea floated in the 1950s by management consultants such as Arch Patton of McKinsey as a means to top-up relatively stagnant managerial
pay. Yet it was relaunched in this new context as part of the promise to 'align the interests of managers with shareholders.' Stock
options helped managerial pay skyrocket in the 1990s, a curious fact for those who believe that managers were 'disciplined' by shareholders.
Third, the notion of shareholder primacy helped to offload managerial responsibility. An amorphous and often anonymous 'shareholder
pressure' became the explanation for all manner of managerial malpractice. Managers lamented the fact they had no choice but to disregard
workers and other stakeholders because of shareholder power. Rhetorically, shareholders were deemed responsible for corporate problems.
Yet in practice, managers, more often than not, enrolled shareholders into their own projects, using the newly-formed alliance with
shareholders to pocket huge returns for themselves.
Though shareholder demands are now depicted as the problem to be solved, the same reformist voices have in the past championed
shareholders as the solution to corporate excesses. This was the basis for the hope around the '
shareholder spring ' in 2012, or the
recent championing of activist shareholders as '
labour's last weapon' .
By challenging the conventional narrative, we have emphasised how it is instead the financialisation of
managerialism,
or the way in which corporations have leveraged their operations on financial markets, that has characterised the shareholder value
shift. Politically this matters.
If shareholder demands are understood to be the major problem in corporate life, then the solution is to grant executives more
space. Yet the history of shareholder value tells us that managers have been leading the way in corporate governance. They do not
need shielding from shareholders or anyone else and instead need to be made accountable for their decisions. Critiques of shareholder
primacy risk muddying the responsibility of managers who have long put their own interests first. Perhaps the reason why executives
are now so ready to abandon shareholder primacy, is because it never really existed.
Imagine if all corporations were equally owned by the entire population? Then shareholder primacy would just be representative
democracy, no?
But, of course, corporations are not even close to being equally owned by the entire population and part of the blame must
lie with government privileges for private credit creation whereby the need to share wealth and power with the entire population
is bypassed – in the name of "efficiency", one might suppose.
But what good is the "efficient" creation of wealth if it engenders unjust and therefore dangerous inequality and levies noxious
externalities?
"An amorphous and often anonymous 'shareholder pressure' became the explanation for all manner of managerial malpractice."
Amorphous? Anonymous? Anybody who faced one of Milken's raiders, or paid Icahn's Greenmail, would disagree. Nelson Putz,
er, Peltz just forced P&G to start eating into the foundation of the business to feed his greed. There's nothing amorphous or
anonymous about activist shareholders, especially when they take over a company and start carving it up like a Thanksgiving turkey.
Shareholder primacy or Creditor Primacy? Creditors, or bond holders, appear to be the more powerful. Shareholders have no legal
recourse to protect their "ownership." Bondholders do have legal recourse. Either way, many corporations more serve up their than
serve their customers and the general public. There is this belief that if a corporation is profitable, that's good but does not
include a public interest (for example Monsanto and Roundup.)
Managers used to fear the creditors more than shareholders, that's very much true.
But that has gone out of the window recently, as debt investors just chase return, so it's seller's world, and few of them
(debt investors) want to take losses as they are much harder to recoup than before. So extend and pretend is well and alive.
In other words, one of the byproducts of QE is that the company management fears no-one, and is more than happy to do whatever
they want.
The problem is the agency. If we assume that we want publicly traded companies (which IMO is not a given), the current incentives
are skewed towards management paying themselves.
The problem with things like supervisory boards, even if they have high worker representation, is that those are few individuals,
and often can be (directly or indirectly) corrupted by the management.
The "shares" incentive is just dumb, at least in the way it's currently structured. It literally gives only upside, and often
even realisable in short/medium term.
Corporations are artificial creations of the state. They exist in their current form under a complex series of laws and
regulations, but with certain privileges, such as Limited Liability Corporations. It is assumed that these creatures will enhance
economic activity if they are given these privileges, but there is no natural law, such as gravity, that says these laws and regulations
need to exist in their current form. They can be changed at will be legislatures.
This is why I despise the Citizens United decision which effectively gives these artificial creations the same rights as people.
I don't believe that Thomas Jefferson would have found that to be "a self-evident truth." I think that Citizens United will be
regarded as something akin to the Dred Scott decision a century from now.
Shareholder primacy is an assumption that hasn't been challenged over the past couple of decades, but can be controlled by
society if it so desires.
The semantics of "shareholder primacy" are problematic. The word "shareholder" in this formula echoes the kind problems
that whirl around a label like "farmer".
A shareholder is often characterized in economics texts as an individual who invests money hoping to receive back dividends
and capital gains in the value and valuation of a company as it earns income and grows over time. Among other changes -- changes
to the US tax laws undermined these quaint notions of investment, and shareholder.
The coincident moves for adding stock options to management's pay packet [threats of firing are supposed to encourage the efforts
of other employees -- why do managers needs some kind of special encouragement?], legalizing share buybacks, and other 'financial
innovations' -- worked in tandem to make investment synonymous with speculation and shareholders synonymous with speculators,
Corporate raiders, and the self-serving Corporate looters replacing Corporate management.
This post follows a twisting road to argue previous "critique of shareholder value has always been based on a misunderstanding"
and arrives at a new critique of shareholder value "challenging the conventional narrative." This post begins by sketching Stern's
foundation for 'shareholder value' with the assertion imputed to him: "if management was effective, demand for the firm's stock
would be high. A low price would imply bad management." The post then claims "What sounds obvious now was revolutionary at the
time." But that assertion does not sound at all obvious to me. In terms of the usual framing of the all-knowing Market the assertion
sounds like a tautology, built on a shaky ground of Neolilberal economic religious beliefs.
I believe "shareholder primacy" is just one of many rhetorical tools used to argue for the mechanisms our Elites constructed
so they could loot Corporate wealth. There is no misunderstanding involved.
"But that assertion does not sound at all obvious to me."
I think you're severely understating this. I'd call it total [family blogging family blog]. As you go on to imply, it takes
an act of pure faith, akin to religious faith in Dawkins' sense of belief in the face of evidence to the contrary, to assume or
assert this nonsense, except insofar as it's tautological – if the purpose of management is to have a high share price, then obviously
the latter reflects the effectiveness of the former.
Well, we're all stakeholders now. There probably isn't much value to merely being a shareholder at this point. First let's
ask for a viable definition of "value" because it's pretty hard to financialize an undefined "value" and nobody can financialize
an empty isolated thing like the word "management". Things go haywire.
What we can do with this seed of an idea is finance the preservation and protection of some defined value. And we can, in fact,
leverage a healthy planet until hell freezes over. No problem.
This fits within a Marxist analysis as the material conditions spurred the ideological justifications of the conditions,
not the ideology spurring the conditions.
Easy to bust this open by legislating against limited liability. Corporates were not always limited liability, but it was promoted
as a means to encourage formation of risky businesses that would otherwise never develop due to risk averse owners or managers.
This was promoted as a social compact, delivering employment and growth that would otherwise be unattainable. Like everything
in life, human greed overcomes social benefits.
Governments world wide would and should step up and regulate to regain control, rather than fiddling at the margins with corporate
governance regulation. They won't, because powerful vested interests will put in place those politicians who will do their bidding.
Another nail in the democracy coffin. The only solution will be a cataclysmic event that unites humanity.
I think about stock markets as separate from companies and I'm wrong. Each of the stock exchanges I have heard of started
off when 4-5 local companies invested a few thousand each in renting a building and a manager to run an exchange hoping it would
attract investment, promote their shares and pay for itself.
I remember when one of the major components of the Hong Kong Exchange, Hutchison, had a bad year and really needed some
black magic to satisfy the shareholders, the Deputy Chairman abandoned his daytime job and spent trading hours buying and selling
for a fortnight to contribute something respectable for the annual accounts. Somebody paid and never knew it.
This was at the start of creative accounting and the 'anything goes' version of capitalism that the article connects with Litton
Industries, Teledyne and LTV but was infecting the entire inner circle of the money.
"... As part of the scam, parents would "donate" money to a fake charity run by Singer. The funds would then be laundered to either pay off an SAT or ACT administrator to take the exams or bribe an employee in college athletics to name the rich, non-athlete children as recruits. Virtually every scenario relied on multiple layers of corruption, all of which eventually allowed wealthy students to masquerade as "deserving" of the merit-based college slots they paid up to half a million dollars to "qualify" for. ..."
"... When a majority of citizens disagrees with economic elites and/or with organised interests, they generally lose. Moreover, because of the strong status quo bias built into the US political system, even when fairly large majorities of Americans favor policy change, they generally do not get it. ..."
"... The conclusion of the study? We live in an oligarchy: ..."
The college bribery scandal reveals an ugly truth: our society is unjust, dominated by a small elite. Actress Lori
Loughlin, who has been implicated in the Operation Varsity Blues scandal. Credit:
Featureflash Photo Agency/Shutterstock The most destructive
and pervasive myth in America today is that we live in a meritocracy. Our elites, so the myth goes, earned their places at Yale and
Harvard, on Wall Street and in Washington -- not because of the accident of their birth, but because they are better, stronger, and
smarter than the rest of us. Therefore, they think, they've "earned" their places in the halls of power and "deserve" to lead.
The fervor with which so many believe this enables elites to lord over those worse off than they are. On we slumber, believing
that we live in a country that values justice, instead of working towards a more equitable and authentically meritocratic society.
Take the Operation Varsity Blues scandal. On Tuesday, the FBI and federal prosecutors announced that 50 people had been charged in,
as Sports Illustrated put it , "a nationwide college admissions scheme that used bribes to help potential students cheat
on college entrance exams or to pose as potential athletic recruits to get admitted to high-profile universities." Thirty-three parents,
nine collegiate coaches, two SAT/ACT exam administrators, an exam proctor,
and a college athletics administrator were among those charged. The man who allegedly ran the scheme, William Rick Singer, pled
guilty to four charges of racketeering conspiracy, money laundering conspiracy, conspiracy to defraud the U.S., and obstruction of
justice.
As part of the scam, parents would "donate" money to a fake charity run by Singer. The funds would then be laundered to either
pay off an SAT or ACT administrator to take the exams or bribe an employee in college athletics to name the rich, non-athlete children
as recruits. Virtually every scenario relied on multiple layers of corruption, all of which eventually allowed wealthy students to
masquerade as "deserving" of the merit-based college slots they paid up to half a million dollars to "qualify" for.
Cheating. Bribery. Lying. The wealthy and privileged buying what was reserved for the deserving. It's all there on vivid display.
Modern American society has
become increasingly and
banally corrupt , both in the ways in which "justice" is meted out and in who is allowed to access elite education and the power
that comes with it.
The average American citizen has very little power, as a 2014
study by Princeton University found. The research reviewed 1,779 public policy questions asked between 1981 and 2002 and the
responses by different income levels and interest groups; then calculated the likelihood that certain policies would be adopted.
A proposed policy change with low support among economically elite Americans (one-out-of-five in favor) is adopted only about
18 percent of the time, while a proposed change with high support (four-out-of-five in favor) is adopted about 45% of the time.
That's in stark contrast with policies favored by average Americans:
When a majority of citizens disagrees with economic elites and/or with organised interests, they generally lose. Moreover,
because of the strong status quo bias built into the US political system, even when fairly large majorities of Americans favor
policy change, they generally do not get it.
The conclusion of the study? We live in an oligarchy:
our analyses suggest that majorities of the American public actually have little influence over the policies our government
adopts. [T]he preferences of the average American appear to have only a minuscule, near-zero, statistically non-significant impact
upon public policy.
The belief in the myth of merit hurts the smart kid with great grades who aced his SATs but was still rejected from Yale and Harvard.
It hurts talented athletes who have worked their tails off for so many years. It hurts parents who have committed hundreds of school
nights and weekends to their children. It hurts HR departments that believe degrees from Ivy League schools mean that graduates are
qualified. It hurts all of us who buy into the great myth that America is a democratic meritocracy and that we can achieve whatever
we want if only we're willing to expend blood, toil, sweat, and tears.
At least in an outright class system like the British Houses of Lords and Commons, there is not this farcical playacting of equal
opportunity. The elites, with their privilege and titles, know the reason they are there and feel some sense of obligation to those
less well off than they are. At the very least, they do not engage in the ritual pretense of "deserving" what they "earned" -- quite
unlike those who descend on Washington, D.C. believing that they really are better than their compatriots in flyover country.
All societies engage in myth-making about themselves. But the myth of meritocracy may be our most pervasive and destructive belief
-- and it mirrors the myth that anything like "justice" is served up in our courts.
Despite all this evidence, most Americans embrace a version of the Calvinist beliefs promulgated by their forebears, believing
that the elect deserve their status. We remain confident that when our children apply to college or are
questioned by police , they will receive just and fair outcomes. If our neighbors' and friends' kids do not, then we assure ourselves
that it is they who are at fault, not the system.
The result has been a gaping chasm through our society. Lives are destroyed because, rather than working for real merit-based
systems and justice, we worship at the altar of false promises offered by our institutions. Instead we should be rolling up our sleeves
and seeing Operation Varsity Blues for what it is: a call to action.
Barbara Boland is the former weekend editor of the Washington Examiner . Her work has been featured on Fox News, the
Drudge Report, HotAir.com, RealClearDefense, RealClearPolitics, and elsewhere. She's the author of Patton Uncovered , a book
about General Patton in World War II. Follow her on Twitter@BBatDC.
If conservatives are going to dance the graves of Aunt Beckie, the backlash is going to be big. Sure this is a 'scandal' but it
seems these parents weren't rich enough to bribe their kids in college the right way, like Trumps and Kushner, and probably slightly
duped into going along with this scheme. (It appears the government got the ring leader to call all defendants to get evidence
they participated in a crime.)
Just wait until the mug shot of Aunt Beckie is on the internet and Olivia Jade does 60 minutes doing teary eyed interview of
how much she loves her mother. And how many parents are stress that their kids will struggle in the global competitive economy.
I fully recall the days of getting government computing contracts. Once a certain threshold was reached, you discovered you had to
hire a "lobbyist," and give him a significant amount of money to dole out to various gatekeepers in the bureaucracy for your contracts
to be approved. That was the end of our government contracts, and the end was hastened by the reaction to trying to complain about
it.
Thank you, Barbara Boland, for "The Myth of American Meritocracy" and for linking ("Related Articles" box) to the 2012 "The Myth
of American Meritocracy" by Ron Unz, then publisher of the American Conservative.
The 26,000-word Ron Unz research masterpiece was the opening salvo in the nation-wide discussion that ultimately led to the federal
court case nearing resolution in Boston.
"The Myth of American Meritocracy -- How corrupt are Ivy League admissions?" by Ron Unz, The American Conservative, Nov 28, 2012:
Barbara Boland "While black people make up only 13 percent of the population, they make up 42 percent of death row and 35 percent
of those who are executed."
Ms. Boland: According to the US Department of Justice, African Americans [13 per cent of the population] accounted for 52.5% of
all homicide offenders from 1980 to 2008.
I agree with prodigalson. This is the type of article that TAC should uphold as a 'gold standard'. One reason I read, and comment
on, TAC is that it offers thought provoking, and sometimes contrarian, articles (although the constant harping on transgender BS
gets annoying).
America has always been somewhat corrupt. But, to borrow a phrase, wealth corrupts, and uber wealth corrupts absolutely.
As Warren Buffet says "There's class warfare, all right, but it's my class, the rich class, that's making war, and we're winning".
I have said it before, and I will say it again. During the next severe financial recession, if the rich are protected and coddled
and everybody else is left to fend for themselves the ARs will come out of the closets when the sheriff comes to take the house or
the pickup truck. My sense is that average Americans have had enough.
Imagine if the digital transfer of money was abolished. Imagine if everybody had to have their money in a local bank instead of
on an account in one of the major banks. Imagine if Americans saw, day after day, armored vehicles showing up at local banks to offload
sacks of currency that went to only a few individual accounts.
Instead, the elites get their financial statements showing an ever increasing pile of cash at their disposal. They see it, but
nobody else does. But, if everybody physically saw the river of wealth flowing to the elites, I believe things would change. Fast.
Right now this transfer of wealth is all digital, hidden from the view of 99.99% of Americans. And the elites, the banking industry,
and the wealth management cabal prefer it that way.
I am amazed by the media coverage of this scandal. Was anyone actually under the impression that college admissions were on the
level before these Hollywood bozos were caught red handed?
No, the meritocracy is not dead; it's not even dying. It is, in fact, alive and well and the absolute best alternative to any
other method used to separate wheat from chaff, cream from milk, diamonds from rust.
What else is there that is even half as good?
Are merit-based systems perfect? Heck, no. They've never been perfect; they will never be perfect. They are administered by people
and people are flawed. Not just flawed in the way Singer, and Huffman are flawed (and those individuals are not simply flawed, they're
corrupt) but flawed in the everyday kind of sense. Yes, we all have tendencies, biases, preferences that will -- inevitably -- leak
into our selection process, no matter how objectively strict the process may be structured, no matter how rigorously fair we try
to be.
So the fact that -- as with most things -- we can find a trace of corruption here that fact is meaningless. We can find evidence
of human corruption, venality, greed, sloth, lust, envy (all of the 7 Deadly Sins) pretty much everywhere. But if we look at the
20M students enrolled in college, the vast majority are successfully & fairly admitted through merit-based filtering systems (which
are more or less rigorous) which have been in place forever.
Ms. Boland tells us (with a straight face, no less) that "The U.S. is now a country where corruption is rampant and money buys
both access and outcomes." But what does that even mean?
Certainly money can buy access and certainly money can buy outcomes. But that's what money does. She might as well assert that
money can buy goods and services, and lions and tigers and bears -- oh my! Of course it can. Equally networks can 'buy' access and
outcomes (if my best friend is working as the manager for Adele, I'm betting he could probably arrange my meeting Adele). Equally
success & fame can buy access and outcomes. I'm betting Adele can probably arrange a meeting with Gwen Stefani .and both can arrange
a meeting with Tom Brady. So what? Does the fact that money can be used to purchase goods & services mean money or the use of money
is corrupt or morally degenerate? No, of course not. In truth, we all leverage what we have (whatever that may be) to get what we
want. That's how life works. But the fact that we all do that does not mean we are all corrupt.
But yes, corruption does exist and can usually be found, in trace amounts -- as I said -- pretty much everywhere.
So is it rampant? Can I buy my way into the NBA or the NFL? If I go to Clark Hunt and give him $20M and tell him I want to play
QB for the Chiefs, will he let me? Can I buy my way into the CEO's position at General Electric, Apple, Microsoft, Google, Sprint,
Verizon, General Motors, Toyota or any of the Fortune 500? Heck, can I even buy my way into the Governor's mansion? To become the
Mayor of Chicago? Or the Police Commissioner? No -- these things are not possible. But what I can buy is my presence on the media
stage.
What happens after cannot be purchased.
So no, by any measure, corruption is not rampant. And though many things are, in fact, for sale -- not everything is. And no matter
how much money I give anyone, I'm never gonna QB the Chiefs or play for the Lakers.
She tells us, "we are dominated by a rich and powerful elite." No, we're not. Most of us live our lives making the choices we
want to make, given the means that each of us has, without any interference from any so-called "elite". The "elite" didn't tell me
where to go to school, or where to get a job, or how to do my job, or when to have kids, or what loaf of bread to buy, or what brand
of beer tastes best, or where to go on the family vacation. No one did. The elite obviously did not tell us who to vote for in the
last presidential election.
Of course one of the problems with the "it's the fault of the elite" is the weight given institutions by people like Ms.Boland.
"Oh, lordy, the Elite used their dominating power to get a brainless twit of a daughter into USC". Now if my kid were cheated out
of a position at USC because the Twit got in, I'd be upset but beyond that who really cares if a Twit gets an undergraduate degree
from USC or Yale .or Harvard .or wherever. Some of the brightest people I've known earned their degrees at Easter PolyTechnic U (some
don't even have college degrees -- oh, the horror!); some of the stupidest have Ivy League credentials. So what?
Only if you care about the exclusivity of such a relatively meaningless thing as a degree from USC, does gaming the exclusivity
matter.
She ends with the exhortation: "The result has been a gaping chasm through our society. Lives are destroyed because, rather than
working for real merit-based systems and justice, we worship at the altar of false promises offered by our institutions. Instead
we should be rolling up our sleeves and seeing Operation Varsity Blues for what it is: a call to action."
To do what, exactly?
Toss the baby and the bathwater? Substitute lottery selection for merit? Flip a coin? What?
Again the very best method is and always will be merit-based. That is the incentive which drives all of us: the hope that if we work
hard enough and do well enough, that we will succeed. Anything else is just a lie.
Yes, we can root out this piece of corruption. Yes, we can build better and more rigorously fair systems. But in the end, merit
is the only game in town. Far better to roll-up our sleeves and simply buckle down, Winsocki. There isn't anything better.
"While black people make up only 13 percent of the population, they make up 42 percent of death row and 35 percent of those who are
executed. There are big racial disparities in charging, sentencing, plea bargaining, and executions, Department of Justice reviews
have concluded, and black and brown people are disproportionately found to be innocent after landing on death row. The poor and disadvantaged
thereby become grist for a system that cares nothing for them."
So to what degree are these "disparities" "disproportionate" in light of actual criminal behavior? To be "proportionate," would
we expect criminal behavior to correlate exactly to racial, ethnic, sex, and age demographics of society as a whole?
Put another way, if you are a victim of a violent crime in America, what are the odds your assailant is, say, an elderly, Asian
female? Approximately zero.
Conversely, what are the odds your assailant is a young, black male? Rather high, and if you yourself are a young, black male,
approaching 100 percent.
Mostly thumbs up to this article. But why you gotta pick on Calvinism at the end? Anyway, your understanding of Calvinism is entirely
upside down. Calvinists believe they are elect by divine grace, and salvation is something given by God through Jesus, which means
you can't earn it and you most assuredly don't deserve it. Calvinism also teaches that all people are made in the image of God and
worthy of respect, regardless of class or status. There's no "version" of Calvinism that teaches what you claim.
"... 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 40–50% 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 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."
"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 40–50% 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 me–or heartburn, the more cynical would
call it–was 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.
But–and I'm really not trying to sound corny 0r self-important here–what 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. Oh–and 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 categories–though they must be a very large component of Mr Unz's pool
of top talent–are 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 is–or was–Protean 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 origins–often including changes in their last names–and 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 is–I 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 instance–or 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 colleges–an 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.
The world is filled with conformism and groupthink. Most people do not wish to think for
themselves. Thinking for oneself is dangerous, requires effort and often leads to rejection by
the herd of one's peers.
The profession of arms, the intelligence business, the civil service bureaucracy, the
wondrous world of groups like the League of Women Voters, Rotary Club as well as the empire of
the thinktanks are all rotten with this sickness, an illness which leads inevitably to
stereotyped and unrealistic thinking, thinking that does not reflect reality.
The worst locus of this mentally crippling phenomenon is the world of the academics. I have
served on a number of boards that awarded Ph.D and post doctoral grants. I was on the Fulbright
Fellowship federal board. I was on the HF Guggenheim program and executive boards for a long
time. Those are two examples of my exposure to the individual and collective academic
minds.
As a class of people I find them unimpressive. The credentialing exercise in acquiring a
doctorate is basically a nepotistic process of sucking up to elders and a crutch for ego
support as well as an entrance ticket for various hierarchies, among them the world of the
academy. The process of degree acquisition itself requires sponsorship by esteemed academics
who recommend candidates who do not stray very far from the corpus of known work in whichever
narrow field is involved. The endorsements from RESPECTED academics are often decisive in the
award of grants.
This process is continued throughout a career in academic research. PEER REVIEW is the
sine qua non for acceptance of a "paper," invitation to career making conferences, or
to the Holy of Holies, TENURE.
This life experience forms and creates CONFORMISTS, people who instinctively boot-lick their
fellows in a search for the "Good Doggy" moments that make up their lives. These people are for
sale. Their price may not be money, but they are still for sale. They want to be accepted as
members of their group. Dissent leads to expulsion or effective rejection from the group.
This mentality renders doubtful any assertion that a large group of academics supports any
stated conclusion. As a species academics will say or do anything to be included in their
caste.
This makes them inherently dangerous. They will support any party or parties, of any
political inclination if that group has the money, and the potential or actual power to
maintain the academics as a tribe. pl
That is the nature of tribes and humans are very tribal. At least most of them.
Fortunately, there are outliers. I was recently reading "Political Tribes" which was written
by a couple who are both law professors that examines this.
Take global warming (aka the rebranded climate change). Good luck getting grants to do any
skeptical research. This highly complex subject which posits human impact is a perfect
example of tribal bias.
My success in the private sector comes from consistent questioning what I wanted to be
true to prevent suboptimal design decisions.
I also instinctively dislike groups that have some idealized view of "What is to be
done?"
As Groucho said: "I refuse to join any club that would have me as a member"
The 'isms' had it, be it Nazism, Fascism, Communism, Totalitarianism, Elitism all demand
conformity and adherence to group think. If one does not co-tow to whichever 'ism' is at
play, those outside their group think are persecuted, ostracized, jailed, and executed all
because they defy their conformity demands, and defy allegiance to them.
One world, one religion, one government, one Borg. all lead down the same road to --
Orwell's 1984.
David Halberstam: The Best and the Brightest. (Reminder how the heck we got into Vietnam,
when the best and the brightest were serving as presidential advisors.)
Also good Halberstam re-read: The Powers that Be - when the conservative media controlled
the levers of power; not the uber-liberal one we experience today.
"... As the Gramscian theorists Chantal Mouffe and Ernesto Laclau observed, our political identities are not a 'given' – something that emerges directly from the objective facts of our situation. We all occupy a series of overlapping identities in our day-to-day lives – as workers or bosses, renters or home-owners, debtors or creditors. Which of these define our politics depends on political struggles for meaning and power. ..."
"... The architects of neoliberalism understood this process of identity creation. By treating people as selfish, rational utility maximisers, they actively encouraged them to become selfish, rational utility maximisers. As the opening article points out, this is not a side effect of neoliberal policy, but a central part of its intention. As Michael Sandel pointed out in his 2012 book 'What Money Can't Buy: The Moral Limits of Markets' , it squeezes out competing values that previously governed non-market spheres of life, such as ethics of public service in the public sector, or mutual care within local communities. But these values remain latent: neoliberalism does not have the power to erase them completely. This is where the hope for the left lies, the crack of light through the doorway that needs to be prised open. ..."
"... More generally, there is some evidence that neoliberalism didn't really succeed in making us see ourselves as selfish rational maximisers – just in making us believe that everybody else was . For example, a 2016 survey found that UK citizens are on average more oriented towards compassionate values than selfish values, but that they perceive others to be significantly more selfish (both than themselves and the actual UK average). Strikingly, those with a high 'self-society gap' were found to be less likely to vote and engage in civic activity, and highly likely to experience feelings of cultural estrangement. ..."
"... Perhaps a rational system is one that accepts selfishness but keeps it within limits. Movements like the Chicago school that pretend to reinvent the wheel with new thinking are by this view a scam. As J.K. Galbraith said: "the problem with their ideas is that they have been tried." ..."
"... They tried running an economy on debt in the 1920s. The 1920s roared with debt based consumption and speculation until it all tipped over into the debt deflation of the Great Depression. No one realised the problems that were building up in the economy as they used an economics that doesn't look at private debt, neoclassical economics. ..."
"... Keynes looked at the problems of the debt based economy and came up with redistribution through taxation to keep the system running in a sustainable way and he dealt with the inherent inequality capitalism produced. ..."
"... Neoliberalism, which has influenced so much of the conventional thinking about money, is adamant that the public sector must not create ('print') money, and so public expenditure must be limited to what the market can 'afford.' Money, in this view, is a limited resource that the market ensures will be used efficiently. Is public money, then, a pipe dream? No, for the financial crisis and the response to it undermined this neoliberal dogma. ..."
"... The financial sector mismanaged its role as a source of money so badly that the state had to step in and provide unlimited monetary backing to rescue it. The creation of money out of thin air by public authorities revealed the inherently political nature of money. But why, then, was the power to create money ceded to the private sector in the first place -- and with so little public accountability? ..."
Lambert here: Not sure the soul is an identity, but authors don't write the headlines. Read
on!
By Christine Berry, a freelance researcher and writer and was previously Director of
Policy and Government for the New Economics Foundation. She has also worked at ShareAction and
in the House of Commons.
Originally published at Open Democracy .
"Economics is the method: the object is to change the soul." Understanding why Thatcher said
this is central to understanding the neoliberal project, and how we might move beyond it.
Carys Hughes and Jim Cranshaw's opening article poses a crucial challenge to the left in
this respect. It is too easy to tell ourselves a story about the long reign of neoliberalism
that is peopled solely with all-powerful elites imposing their will on the oppressed masses. It
is much harder to confront seriously the ways in which neoliberalism has manufactured popular
consent for its policies.
The left needs to acknowledge that aspects of the neoliberal agenda have been overwhelmingly
popular: it has successfully tapped into people's instincts about the kind of life they want to
lead, and wrapped these instincts up in a compelling narrative about how we should see
ourselves and other people. We need a coherent strategy for replacing this narrative with one
that actively reconstructs our collective self-image – turning us into empowered citizens
participating in communities of mutual care, rather than selfish property-owning individuals
competing in markets.
As the Gramscian theorists Chantal Mouffe and Ernesto Laclau observed, our political
identities are not a 'given' – something that emerges directly from the objective facts
of our situation. We all occupy a series of overlapping identities in our day-to-day lives
– as workers or bosses, renters or home-owners, debtors or creditors. Which of these
define our politics depends on political struggles for meaning and power.
Part of the job of politics – whether within political parties or social movements
– is to show how our individual problems are rooted in systemic issues that can be
confronted collectively if we organise around these identities. Thus, debt becomes not a source
of shame but an injustice that debtors can organise against. Struggles with childcare are not a
source of individual parental guilt but a shared societal problem that we have a shared
responsibility to tackle. Podemos were deeply influenced by this thinking when they sought to
redefine Spanish politics as 'La Casta' ('the elite') versus the people, cutting across many of
the traditional boundaries between right and left.
The architects of neoliberalism understood this process of identity creation. By treating
people as selfish, rational utility maximisers, they actively encouraged them to become
selfish, rational utility maximisers. As the opening article points out, this is not a side
effect of neoliberal policy, but a central part of its intention. As Michael Sandel pointed out
in his 2012 book 'What Money Can't Buy: The Moral Limits of Markets' , it squeezes out
competing values that previously governed non-market spheres of life, such as ethics of public
service in the public sector, or mutual care within local communities. But these values remain
latent: neoliberalism does not have the power to erase them completely. This is where the hope
for the left lies, the crack of light through the doorway that needs to be prised open.
The Limits of Neoliberal Consciousness
In thinking about how we do this, it's instructive to look at the ways in which neoliberal
attempts to reshape our identities have succeeded – and the ways they have failed. While
Right to Buy might have been successful in identifying people as home-owners and stigmatising
social housing, this has not bled through into wider support for private ownership. Although
public ownership did become taboo among the political classes for a generation – far
outside the political 'common sense' – polls consistently showed that this was not
matched by a fall in public support for the idea. On some level – perhaps because of the
poor performance of privatised entities – people continued to identify as citizens with a
right to public services, rather than as consumers of privatised services. The continued
overwhelming attachment to a public NHS is the epitome of this tendency. This is partly what
made it possible for Corbyn's Labour to rehabilitate the concept of public ownership, as the
2017 Labour manifesto's proposals for public ownership of railways and water – dismissed
as ludicrous by the political establishment – proved overwhelmingly popular.
More generally, there is some evidence that neoliberalism didn't really succeed in making us
see ourselves as selfish rational maximisers – just in making us believe that
everybody else was . For example, a 2016 survey found that UK citizens
are on average more oriented towards compassionate values than selfish values, but that they
perceive others to be significantly more selfish (both than themselves and the actual UK
average). Strikingly, those with a high 'self-society gap' were found to be less likely to vote
and engage in civic activity, and highly likely to experience feelings of cultural
estrangement.
This finding points towards both the great conjuring trick of neoliberal subjectivity and
its Achilles heel: it has successfully popularised an idea of what human beings are like that
most of us don't actually identify with ourselves. This research suggests that our political
crisis is caused not only by people's material conditions of disempowerment, but by four
decades of being told that we can't trust our fellow citizens. But it also suggests that deep
down, we know this pessimistic account of human nature just isn't who we really are – or
who we aspire to be.
An example of how this plays out can be seen in academic studies showing that, in game
scenarios presenting the opportunity to free-ride on the efforts of others, only economics
students behaved as economic models predicted: all other groups were much more likely to pool
their resources. Having been trained to believe that others are likely to be selfish,
economists believe that their best course of action is to be selfish as well. The rest of us
still have the instinct to cooperate. Perhaps this shouldn't be surprising: after all, as
George Monbiot argues in 'Out of the Wreckage' , cooperation is our species' main
survival strategy.
What's Our 'Right to Buy?'
The challenge for the left is to find policies and stories that tap into this latent sense
of what makes us human – what Gramsci called 'good sense' – and use it to overturn
the neoliberal 'common sense'. In doing so, we must be aware that we are competing not only
with a neoliberal identity but also with a new far-right that seeks to promote a white British
ethno-nationalist group identity, conflating 'elites' with outsiders. How we compete with this
is the million dollar question, and it's one we have not yet answered.
Thatcher's use of flagship policies like the Right to Buy was a masterclass in this respect.
Deceptively simple, tangible and easy to grasp, the Right to Buy also communicated a much
deeper story about the kind of nation we wanted to be – one of private, property-owning
individuals – cementing home-ownership as a cultural symbol of aspiration (the right to
paint your own front door) whilst giving millions an immediate financial stake in her new
order. So what might be the equivalent flagship policies for the left today?
Perhaps one of the strongest efforts to date has been the proposal for ' Inclusive Ownership
Funds ', first developed by Mathew Lawrence in a report for the New Economics Foundation,
and announced as
Labour policy by John McDonnell in 2018. This would require companies to transfer shares
into a fund giving their workers a collective stake that rises over time and pays out employee
dividends. Like the Right to Buy, as well as shifting the material distribution of wealth and
power, this aims to build our identity as part of a community of workers taking more collective
control over our working lives.
But this idea only takes us so far. While it may tap into people's desire for more security
and empowerment at work, more of a stake in what they do, it offers a fairly abstract benefit
that only cashes out over time, as workers acquire enough of a stake to have a meaningful say
over company strategy. It may not mean much to those at the sharpest end of our oppressive and
precarious labour market, at least not unless we also tackle the more pressing concerns they
face – such as the exploitative practices of behemoths like Amazon or the stress caused
by zero-hours contracts. We have not yet hit on an idea that can compete with the
transformative change to people's lives offered by the Right to Buy.
So what else is on the table? Perhaps, when it comes to the cutting edge of new left
thinking on these issues, the workplace isn't really where the action is – at least not
directly. Perhaps we need to be tapping into people's desire to escape the 'rat race'
altogether and have more freedom to pursue the things that really make us happy – time
with our families, access to nature, the space to look after ourselves, connection with our
communities. The four day working week (crucially with no loss of pay) has real potential as a
flagship policy in this respect. The Conservatives and the right-wing press may be laughing it
down with jokes about Labour being lazy and feckless, but perhaps this is because they are
rattled. Ultimately, they can't escape the fact that most people would like to spend less time
at work.
Skilfully communicated, this has the potential to be a profoundly anti-neoliberal policy
that conveys a new story about what we aspire to, individually and as a society. Where
neoliberalism tapped into people's desire for more personal freedom and hooked this to the
acquisition of wealth, property and consumer choice, we can refocus on the freedom to live the
lives we truly want. Instead of offering freedom through the market, we can offer
freedom from the market.
Proponents of Universal Basic Income often argue that it fulfils a similar function of
liberating people from work and detaching our ability to provide for ourselves from the
marketplace for labour. But in material terms, it's unlikely that a UBI could be set at a level
that would genuinely offer people this freedom, at least in the short term. And in narrative
terms, UBI is actually a highly malleable policy that is equally susceptible to being co-opted
by a libertarian agenda. Even at its best, it is really a policy about redistribution of
already existing wealth (albeit on a bigger scale than the welfare state as it stands). To
truly overturn neoliberalism, we need to go beyond this and talk about collective
ownership and creation of wealth.
Policies that focus on collective control of assets may do a better job of replacing
a narrative about individual property ownership with one that highlights the actual
concentration of property wealth in the hands of elites – and the need to reclaim these
assets for the common good. As well as Inclusive Ownership Funds, another way of doing this is
through Citizens' Wealth Funds, which socialise profitable assets (be it natural resources or
intangible ones such as data) and use the proceeds to pay dividends to individuals or
communities. Universal Basic Services – for instance, policies such as free publicly
owned buses – may be another.
Finally, I'd like to make a plea for care work as a critical area that merits further
attention to develop convincing flagship policies – be it on universal childcare, elderly
care or support for unpaid carers. The instinctive attachment that many of us feel to a public
NHS needs to be widened to promote a broader right to care and be cared for, whilst firmly
resisting the marketisation of care. Although care is often marginalised in political debate,
as a new mum, I'm acutely aware that it is fundamental to millions of people's ability to live
the lives they want. In an ageing population, most people now have lived experience of the
pressures of caring for someone – whether a parent or a child. By talking about these
issues, we move the terrain of political contestation away from the work valued by the market
and onto the work we all know really matters; away from the competition for scarce resources
and onto our ability to look after each other. And surely, that's exactly where the left wants
it to be.
The problem is that people are selfish–me included–and so what is needed is
not better ideas about ourselves but better laws. And for that we will need a higher level of
political engagement and a refusal to accept candidates who sell themselves as a "lesser
evil." It's the decline of democracy that brought on the rise of Reagan and Thatcher and
Neoliberalism and not some change in public consciousness (except insofar as the general
public became wealthier and more complacent). In America incumbents are almost universally
likely to be re-elected to Congress and so they have no reason to reject Neoliberal
ideas.
So here's suggesting that a functioning political process is the key to reform and not
some change in the PR.
Carolinian, like you, I try to include myself in statements about "the problem with
people." I believe one of the things preventing progress is our tendency to believe it's only
those people that are the problem.
Human nature people are selfish. It's like the Christian marriage vow – which I understand is a Medieval invention
and not something from 2,000 years ago – for better or worse, meaning, we share (and
are not to be selfish) the good and the bad.
"Not neoliberals, but all of us." "Not the right, but the left as well." "Not just Russia, but America," or "Not just America, but Russia too."
Perhaps a rational system is one that accepts selfishness but keeps it within limits.
Movements like the Chicago school that pretend to reinvent the wheel with new thinking are by
this view a scam. As J.K. Galbraith said: "the problem with their ideas is that they have
been tried."
My small brain got stuck on your reference to a 'Christian marriage vow'. I was just
sitting back and conceiving what a Neoliberal marriage vow would sound like. Probably a cross
between a no-liabilities contract and an open-marriage agreement.
"people are selfish"?; or "people can sometimes act selfishly"? I think the latter is the
more accurate statement. Appeal to the better side, and more of it will be forthcoming.
Neolib propaganda appeals to trivial, bleak individualism..
I'm not sure historic left attempts to appeal to "the better angels of our nature" have
really moved the ball much. It took the Great Depression to give us a New Deal and WW2 to
give Britain the NHS and the India its freedom. I'd say events are in the saddle far more
than ideas.
I rather look at it as a "both and" rather than an "either or." If the political
groundwork is not done beforehand and during, the opportunity events afford will more likely
be squandered.
And borrowing from evolutionary science, this also holds with the "punctuated equilibrium"
theory of social/political change. The strain of a changed environment (caused by both events
and intentionally created political activity) for a long time creates no visible change to
the system, and so appears to fail. But then some combination of events and conscious
political work suddenly "punctuates the equilibrium" with the resulting significant if not
radical changes.
Chile today can be seen as a great example of this: "Its not 30 Pesos, its 30 Years."
Carolinian, you provide a good illustration of the power of the dominant paradigm to make
people believe exactly what the article said–something I've observed more than enough
to confirm is true. People act in a wide variety of ways; but many people deny that altruism
and compassion are equally "human nature". Both parts of the belief pointed out
here–believing other people are selfish and that we're not–are explained by
projection acting in concert with the other parts of this phenomenon. Even though it's flawed
because it's only a political and not a psychological explanation, It's a good start toward
understanding.
"You and I are so deeply acculturated to the idea of "self" and organization and species
that it is hard to believe that man [sic] might view his [sic] relations with the environment
in any other way than the way which I have rather unfairly blamed upon the nineteenth-century
evolutionists."
Gregory Bateson, Steps to an Ecology of Mind, p 483-4
This is part of a longer quote that's been important to me my whole life. Worth looking up.
Bateson called this a mistake in epistemology–also, informally, his definition of
evil. http://anomalogue.com/blog/category/systems-thinking/
"When plunder becomes a way of life for a group of men in a society, over the course of
time they create for themselves a legal system that authorizes it and a moral code that
glorifies it."
― Frédéric Bastiat
Doesn't mean it's genetic. In fact, I'm pretty sure it means it's not.
The Iron Lady once proclaimed, slightly sinisterly: "Economics is the method. The object
is to change the soul." She meant that British people had to rediscover the virtue of
traditional values such as hard work and thrift. The "something for nothing" society was
over.
But the idea that the Thatcher era re-established the link between virtuous effort and
just reward has been effectively destroyed by the spectacle of bankers driving their
institutions into bankruptcy while being rewarded with million-pound bonuses and munificent
pensions.
The dual-truth approach of the Neoliberal Thought Collective (thanks, Mirowski) has been
more adept at manipulating narratives so the masses are still outraged by individuals getting
undeserved social benefits rather than elites vacuuming up common resources. Thanks to the
Thatcher-Reagan revolution, we have ended up with socialism for the rich, and everyone else
at the mercy of 'markets'.
Pretending that there are not problems with free riders is naive and it goes against
people's concern with justice. Acknowledging free riders on all levels with institutions that
can constantly pursue equity is the solution.
At some points in life, everyone is a free rider. As for the hard workers, many of them
are doing destructive things which the less hard-working people will have to suffer under and
compensate for. (Neo)liberalism and capitalism are a coherent system of illusions of virtue
which rest on domination, exploitation, extraction, and propaganda. Stoking of resentment (as
of free riders, the poor, the losers, foreigners, and so on) is one of the ways those who
enjoy it keep it going.
The Iron Lady once proclaimed, slightly sinisterly: "Economics is the method. The object
is to change the soul." She meant that British people had to rediscover the virtue of
traditional values such as hard work and thrift. The "something for nothing" society was
over.
But the idea that the Thatcher era re-established the link between virtuous effort and
just reward has been effectively destroyed by the spectacle of bankers driving their
institutions into bankruptcy while being rewarded with million-pound bonuses and munificent
pensions.
The dual-truth approach of the Neoliberal Thought Collective (thanks, Mirowski) has been
more adept at manipulating narratives so the masses are still outraged by individuals getting
undeserved social benefits rather than elites vacuuming up common resources. Thanks to the
Thatcher-Reagan revolution, we have ended up with socialism for the rich, and everyone else
at the mercy of 'markets'.
Pretending that there are not problems with free riders is naive and it goes against
people's concern with justice. Acknowledging free riders on all levels with institutions that
can constantly pursue equity is the solution.
The Iron Lady had a agenda to break the labor movement in the UK.
What she did not understand is Management gets the Union (Behavior) it deserves. If there
is strife in the workplace, as there was in abundance in the UK at that time, the problem is
the Management, (and the UK class structure) not the workers.
As I found out when I left University.
Thatcher set out to break the solidarity of the Labor movement, and used the neo-liberal
tool of selfishness to achieve success, unfortunately,
The UK's poor management practices, (The Working Class can kiss my arse) and complete
inability to form teams of "Management and Workers" was, IMHO, is the foundation of today's
Brexit nightmare, a foundation based on the British Class Structure.
And exploited, as it ever was, to achieve ends which do not benefit workers in any
manner.
The left needs to acknowledge that aspects of the neoliberal agenda have been
overwhelmingly popular: it has successfully tapped into people's instincts about the kind
of life they want to lead, and wrapped these instincts up in a compelling narrative about
how we should see ourselves and other people.
Sigh, no this is not true. This author is making the mistake that everyone is like the top
5% and that just is not so. Perhaps she should get out of her personal echo chamber and talk
to common people.
In my travels I have been to every state and every major city, and I have worked with just
about every class of people, except of course the ultra wealthy and ultra powerful –
they have people to protect them from the great unwashed like me – and it didn't take
me long to notice that the elite are different from the rest of us but I could never explain
exactly why. After I retired, I started studying and I've examined everything from Adam
Smith, to Hobbes, to Kant, to Durkheim, to Marx, to Ayn Rand, to tons of histories and
anthropologies of various peoples, to you name it and I've come to the conclusion that most
of us are not neoliberal and do not want what the top 5% want.
Most people are not overly competitive and most do not seek self-interest only. That is
what allows us to live in cities, to drive on our roadways, to form groups that seek to
improve conditions for the least of us. It is what allows soldiers to protect each other on
the battlefield when it would be in their self interest to protect themselves. It is what
allowed people in Europe to risk their own lives to save Jews. And it is also what allows
people to live under the worst dictators without rebelling. Of course we all want more but we
have limits on what we will do to get that more – the wealthy and powerful seem to have
no limits. For instance, most of us won't screw over our co-workers to make ourselves look
better, although some will. Most of us won't turn on our best friends even when it would be
to our advantage to do so, although some will. Most of us won't abandon those we care about,
even when it means severe financial damage to us, although some will.
For lack of a better description, I call what the 5% have the greed gene – a gene
that allows them to give up empathy and compassion and basic morality – what some of us
call fairness – in the search for personal gain. I don't think it is necessarily
genetic but there is something in their makeup that cause them to have more than the average
self interest. And because most humans are more cooperative than they are competitive, most
humans just allow these people to go after what they want and don't stand in their way, even
though by stopping them, they could make their own lives better.
Most history and economics are theories and stories told by the rich and powerful to
justify their behavior. I think it is a big mistake to attribute that behavior to the mass of
humanity. Archeology is beginning to look more at how average people lived instead of seeking
out only the riches deposited by the elite, and historians are starting to look at the other
side of history – average people – to see what life was really like for them, and
I think we are seeing that what the rulers wanted was never what their people wanted. It is
beginning to appear obvious that 95% of the people just wanted to live in their communities
safely, to have about what everyone else around them had, and to enjoy the simple pleasures
of shelter, enough food, and warm companionship.
I'm also wondering why the 5% think that all of us want exactly what they want. Do they
really think that they are somehow being smarter or more competent got them there while 95%
of the population – the rest of us – failed?
At this point, I know my theory is half-baked – I definitely need to do more
research, but nothing I have found yet convinces me that there isn't some real basic
difference between those who aspire to power and wealth and the rest of us.
" ..and I've come to the conclusion that most of us are not neoliberal and do not want
what the top 5% want. Most people are not overly competitive and most do not seek
self-interest only. That is what allows us to live in cities, to drive on our roadways, to
form groups that seek to improve conditions for the least of us. It is what allows soldiers
to protect each other on the battlefield when it would be in their self interest to protect
themselves. "
I really liked your comment Historian. Thanks for posting. That's what I've felt in my gut
for a while, that the top 5% and the establishment are operating under a different mindset,
that the majority of people don't want a competitive, dog eat dog, self interest world.
I agree with Foy Johnson. I've been reading up on Ancient Greece and realizing all the
time that 'teh Greeks' are maybe only about thirty percent of the people in Greece. Most of
that history is how Greeks were taking advantage of each other with little mention of the
majority of the population. Pelasgians? Yeah, they came from serpents teeth, the end.
I think this is a problem from the Bronze Age that we have not properly addressed.
Mystery Cycles are a nice reminder that people were having fun on their own.
I have more or less the same view. I think the author's statement about neoliberalism
tapping into what type of life people want to lead is untenable. Besides instinct (are we all
4-year olds?), what people want is also very much socially constructed. And what people do is
also very much socially coerced.
One anecdote: years ago, during a volunteer drive at work, I worked side by side with the
company's CEO (company was ~1200 headcount, ~.5bn revenue) sorting canned goods. The guy was
doing it like he was in a competition. So much so that he often blocked me when I had to
place something on the shelves, and took a lot of space in the lineup around himself while
swinging his large-ish body and arms, and wouldn't stop talking. To me, this was very rude
and inconsiderate, and showed a repulsive level of disregard to others. This kind of behavior
at such an event, besides being unpleasant to be around, was likely also making work for the
others in the lineup less efficient. Had I or anyone else behaved like him, we would have had
a good amount of awkwardness or even a conflict.
What I don't get is, how does he and others get away with it? My guess is, people don't
want a conflict. I didn't want a conflict and said nothing to that CEO. Not because I am not
competitive, but because I didn't want an ugly social situation (we said 'excuse me' and
'sorry' enough, I just didn't think it would go over well to ask him to stop being obnoxious
and dominant for no reason). He obviously didn't care or was unaware – or actually, I
think he was behaving that way as a tactical habit. And I didn't feel I had the authority to
impose a different order.
So, in the end, it's about power – power relations and knowing what to do about
it.
Yep, I think you've nailed it there deplorado, types like your CEO don't care at all
and/or are socially unaware, and is a tactical habit that they have found has worked for them
in the past and is now ingrained. It is a power relation and our current world unfortunately
is now designed and made to suit people like that. And each day the world incrementally moves
a little bit more in their direction with inertia like a glacier. Its going to take something
big to turn it around
I too believe "most of us are not neoliberal". But if so, how did we end up with the kind
of Corporate Cartels, Government Agencies and Organizations that currently prey upon
Humankind? This post greatly oversimplifies the mechanisms and dynamics of Neoliberalism, and
other varieties of exploitation of the many by the few. This post risks a mocking tie to
Identity Politics. What traits of Humankind give truth to Goebbels' claims?
There definitely is "some real basic difference between those who aspire to power and
wealth and the rest of us" -- but the question you should ask next is why the rest of us
Hobbits blindly follow and help the Saurons among us. Why do so many of us do exactly what
we're told? How is it that constant repetition of the Neoliberal identity concepts over our
media can so effectively ensnare the thinking of so many?
Maybe it's something similar to Milgram's Experiment (the movie the Experimenter about
Milgram was on last night – worth watching and good acting by Peter Sarsgaard, my kind
of indie film), the outcome is just not what would normally be expected, people bow to
authority, against their own beliefs and interests, and others interests, even though they
have choice. The Hobbits followed blindly in that experiment, the exact opposite outcome as
to what was predicted by the all the psychology experts beforehand.
people bow to authority , against their own beliefs and interests, and others
interests, even though they have choice
'Don't Make Waves' is a fundamentally useful value that lets us all swim along. This can
be manipulated. If everyone is worried about Reds Under the Beds or recycling, you go along
to get along.
Some people somersault to Authority is how I'd put it.
Yep, don't mind how you put that Mo, good word somersault.
One of the amusing tests Milgram did was to have people go into the lift but all face the
back of the lift instead of the doors and see what happens when the next person got in. Sure
enough, with the next person would get in, face the front, look around with some confusion at
everyone else and then slowly turn and face the back. Don't Make Waves its instinctive to let
us all swim along as you said.
And 'some people' is correct. It was actually the majority, 65%, who followed directions
against their own will and preferred choice in his original experiment.
That's a pretty damn good comment that, Historian. Lots to unpick. It reminded me too of
something that John Wyndham once said. He wrote how about 95% of us wanted to live in peace
and comfort but that the other 5% were always considering their chances if they started
something. He went on to say that it was the introduction of nuclear weapons that made
nobody's chances of looking good which explains why the lack of a new major war since
WW2.
Good comment. My view is that it all boils down to the sociopathic personality disorder.
Sociopathy runs on a continuum, and we all exhibit some of its tendencies. At the highest end
you get serial killers and titans of industry, like the guy sorting cans in another comment.
I believe all religions and theories of ethical behavior began as attempts to reign in the
sociopaths by those of us much lower on the continuum. Neoliberalism starts by saying the
sociopaths are the norm, turning the usual moral and ethical universe upside down.
Your theory is not half-baked; it's spot-on. If you're not the whatever it takes, end
justifies the means type, you are not likely to rise to the top in the corporate world. The
cream rises to the top happens only in the dairy.
Your 5% would correspond to Altemeyer's "social dominators". Unfortunately only
75% want a simple, peaceful life. 20% are looking for a social dominator to follow. It's
psychological.
Excellent comment. Take into consideration the probability that the majority of the top 5%
have come from a privileged background, ensconced in a culture of entitlement. This "greed"
gene is as natural to them as breathing. Consider also that many wealthy families have
maintained their status through centuries of calculated loveless marriages, empathy and other
human traits gene-pooled out of existence. The cruel paradox is that for the sake of riches,
they have lost their richness in character.
This really chimes with me. Thanks so much for putting it down in words.
I often encounter people insisting humans are selfish. It is quite frustrating that this
more predominant side of our human nature seems to become invisible against the
propaganda.
I'm barely into Jeremy Lent's The Patterning Instinct: A Cultural History of Humanity's
Search for Meaning , but he's already laid down his central thesis in fairly complete
form. Humans are both competitive and cooperative, he says, which should surprise no one.
What I found interesting is that the competitive side comes from primates who are more
intensely competitive than humans. The cooperation developed after the human/primate split
and was enabled by "mimetic culture," communication skills that importantly presuppose that
the object(s) of communication are intentional creatures like oneself but with a somewhat
different perspective. Example: Human #1 gestures to Human #2 to come take a closer look at
whatever Human #1 is examining. This ability to cooperate even came with strategies to
prevent a would-be dominant male from taking over a hunter-gatherer band:
[I]n virtually all hunter-gatherer societies, people join together to prevent powerful
males from taking too much control, using collective behaviors such as ridicule, group
disobedience, and, ultimately, extreme sanctions such as assassination [This kind of
society is called] a "reverse dominant hierarchy because rather than being dominated, the
rank and file manages to dominate.
yes, this chimes in with what I`ve been thinking for years after puzzling about why
society everywhere ends up as it does – ie the fact that in small groups as we evolved
to live in, we would keep a check on extreme selfish behaviour of dominant individuals. In
complex societies (modern) most of us become "the masses" visible in some way to the system
but the top echelons are not visible to us and are able to amass power and wealth out of all
control by the rest of us. And yes, you do have to have a very strange drive (relatively
rare, ?pathological) to want power and wealth at everyone else`s expense – to live in a
cruel world many of whose problems could be solved (or not arise in the first place) by
redistributing some of your wealth to little palpable cost to you
Africa over a few million years of Ice Ages seems to have presented our ancestors with the
possibility of reproducing only if you can get along in close proximity to other Hominids
without killing each other. I find that a compelling explanation for our stupidly big brains;
it's one thing to be a smart monkey, it's a whole different solution needed to model what is
going on in the brain of another smart monkey.
And communications: How could spoken language have developed without levels of trust and
interdependence that maybe we can not appreciate today? We have a word for 'Blue' nowadays,
we take it for granted.
There is a theory that language originated between mothers and their immediate progeny,
between whom either trust and benevolence exist, or the weaker dies. The mother's chances for
survival and reproduction are enhanced if she can get her progeny to, so to speak, help out
around the house; how to do that is extended by symbolism and syntax as well as example.
I recall the first day of Econ 102 when the Prof. (damned few adjuncts in those days)
said, "Everything we discuss hereafter will be built on the concept of scarcity." Being a
contrary buggah' I thought, "The air I'm breathing isn't scarce." I soon got with the program
supply and demand upward sloping, downward sloping, horizontal, vertical and who could forget
kinked. My personal favorite was the Giffen Good a high priced inferior product. Kind of like
Micro Economics.
Maybe we could begin our new Neo-Economics 102 with the proviso, "Everything we discuss
hereafter will be based on abundance." I'm gonna' like this class!
Neo-lib Econ does a great job at framing issues so that people don't notice what is
excluded. Think of them as proto-Dark Patternists.
If you are bored and slightly mischievous, ask an economist how theory addresses
cooperation, then assume a can opener and crack open a twist-top beer.
Isn't one of the problems that it's NOT really built on the concept of scarcity? Most
natural resources run into scarcity eventually. I don't know about the air one breaths,
certainly fish species are finding reduced oxygen in the oceans due to climate change.
If you would like that class on abundance you would love the Church of Abundant Life which
pushes Jesus as the way to Abundant Life and they mean that literally. Abundant as in Jesus
wants you to have lots of stuff -- so believe.
I believe Neoliberalism is a much more complex animal than an economic theory. Mirowski
builds a plausible argument that Neoliberalism is a theory of epistemology. The Market
discovers Truth.
Had a lovely Physics class where the first homework problem boiled down to "How often do
you inhale a atom (O or N) from Julius Caesar's last breath". Great little introduction to
the power and pratfalls of 'estimations by Physicists' that xkcd likes to poke at. Back then
we used the CRC Handbook to figure it out.
Anyway, every second breath you can be sure you have shared an atom with Caesar.
I don't think Maggie T. or uncle Milty were thinking about the future at all. Neither one
would have openly promoted turfing quadriplegic 70-year-olds out of the rest home. That's how
short sighted they both were. And stupid. We really need to call a spade a spade here. Milty
doesn't even qualify as an economist – unless economics is the study of the destruction
of society. But neoliberalism had been in the wings already, by the 80s, for 40 years. Nobody
took into account that utility-maximizing capitalism always kills the goose (except Lenin
maybe) – because it's too expensive to feed her. The neoliberals were just plain dumb.
The question really is why should we stand for another day of neoliberal nonsense? Albeit
Macht Frei Light? No thanks. I think they've got the question backwards – it shouldn't
be how should "we" reconstruct our image now – but what is the obligation of all the
failed neoliberal extractors to right society now? I'd just as soon stand back and watch the
dam burst as help the neolibs out with a little here and a little there. They'll just keep
taking as long as we give. This isn't as annoying as Macron's "cake" comment, but it's close.
I did like the last 2 paragraphs however.
Here's a sidebar. A universal one. There is an anomaly in the universe – there is
not enough accumulated entropy. It screws up theoretical physics because the missing entropy
needs to be accounted for for their theories to work to their satisfaction. It seems to be a
phenomenon of evolution. Thus it was recently discovered by a physics grad student that
entropy by heat dissipation is the "creator" of life. Life almost spontaneously erupts where
it can take advantage of an energy source. And, we are assuming, life thereby slows entropy
down. There has to be another similar process among the stars and the planets as well, an
evolutionary conservation of energy. So evolution takes on more serious meaning. From the
quantum to the infinite. And society – it's right in the middle. So it isn't too
unreasonable to think that society is extremely adaptable, taking advantage of any energy
input, and it seems true to think that. Which means that society can go long for its goal
before it breaks down. But in the end it will be enervated by lack of "resources" unless it
can self perpetuate in an evolving manner. That's one good reason to say goodbye to looney
ideologies.
For a view of humanity that is not as selfish, recommend "The Gift" by Marcel Mauss.
Basically an anthropological study of reciprocal gift giving in the oceanic potlatch
societies. My take is that the idea was to re-visit relationships, as giving a gift basically
forces a response in the receiver, "Am I going to respond in kind, perhaps even upping what
is required? Or am I going to find that this relationship simply isn't worth it and walk
away?"
Kind of like being in a marriage. The idea isn't to walk away, the idea is you constantly
need to re-enforce it. Except with the potlatch it was like extending that concept to the
clan at large, so that all the relationships within the clan were being re-enforced.
"Kind of like being in a marriage. The idea isn't to walk away, the idea is you constantly
need to re-enforce it. "
amen.
we, the people, abdicated.
as for humans being selfish by default i used to believe this, due to my own experiences
as an outlaw and pariah.
until wife's cancer and the overwhelming response of this little town,in the "reddest"
congressional district in texas.
locally, the most selfish people i know are the one's who own everything buying up their
neighbor's businesses when things get tough.
they are also the most smug and pretentious(local dems, in their hillforts come a close
second in this regard) and most likely to be gop true believers.
small town and all everybody literally knows everybody, and their extended family and those
connections are intertwined beyond belief.
wife's related, in some way, to maybe half the town.
that matters and explains my experience as an outcast: i never belonged to anything like that
and such fellowfeeling and support is hard for people to extend to a stranger.
That's what's gonna be the hard sell, here, in undoing the hyperindividualist, "there is no
such thing as society" nonsense.
I grew up until Junior High in a fishing village on the Maine coast that had been around
for well over a hundred years and had a population of under 1000. By the time I was 8 I
realized there was no point in being extreme with anyone, because they were likely to be
around for the rest of your life.
I fell in love with sun and warmth when we moved away and unfortunately it's all
gentrified now, by the 90s even a tar paper shack could be sold for a few acres up in
Lamoine.
Yep, small towns are about as close as we get to clans nowadays. And just like clans, you
don't want to be on the outside. Still when you marry in, it would be nice if the town would
make you feel more a member like a clan should / would. ;-)
But outside of the small town and extended families I think that's it. We've been atomized
into our nuclear families. Except for the ruling class – I think they have this quid
pro quo gift giving relationship building figured out quite nicely. Basically they've formed
their own small town – at the top.
By the way, I understand Mauss was an influence on Baudrillard. I could almost imagine
Baudrillard thinking how the reality of the potlatch societies was so different than the
reality of western societies.
That's the big problem I see in this discussion. We know, or at least think we know,
what's wrong, and what would be better; but we can't get other people to want to do something
about it, even those who nominally agree with us. And I sure don't have the answer.
Neoliberalism, in its early guise at least, was popular because politicians like Thatcher
effectively promised something for nothing. Low taxes but still decent public services. The
right to buy your council house without putting your parents' council house house in
jeopardy. Enjoying private medical care as a perk of your job whilst still finding the NHS
there when you were old and sick. And so on. By the time the penny dropped it was too
late.
If the Left is serious about challenging neoliberalism, it has to return to championing the
virtues of community, which it abandoned decades ago in favour of extreme liberal
individualism Unfortunately, community is an idea which has either been appropriated by
various identity warriors (thus fracturing society further) or dismissed (as this author
does) because it's been taken up by the Right. A Left which explained that when everybody
cooperates everybody benefits, but that when everybody fights everybody loses, would sweep
the board.
If the Left is serious about challenging neoliberalism, it has to return to championing
the virtues of community
I agree. The tenuous suggestions offered by the article are top down. But top-down
universal solutions can remove the impetus for local organization. Which enervates the power
of communities. And then you can't do anything about austerity, because your Rep loves the
PowerPoints and has so much money from the Real Estate community.
Before one experiences the virtue, or power, of a community, one has to go through the
pain in the ass of contributing to a community. It has to be rewarding process or it won't
happen.
"An example of how this plays out can be seen in academic studies showing that, in game
scenarios presenting the opportunity to free-ride on the efforts of others, only economics
students behaved as economic models predicted: all other groups were much more likely to pool
their resources. Having been trained to believe that others are likely to be selfish,
economists believe that their best course of action is to be selfish as well. The rest of us
still have the instinct to cooperate. Perhaps this shouldn't be surprising: after all, as
George Monbiot argues in 'Out of the Wreckage', cooperation is our species' main survival
strategy."
Since so many people believe their job is their identity, would be interssting to know
what the job training or jobs were of the "others."
>so many people believe their job is their identity
Only because the social sphere, which in the medium and long term we *all depend
on* to survive, has been debased by 24/7/365 neolib talking points, and their purposeful
economic constrictions..
How many people have spent their lives working for the "greater good"? How many work
building some transcendental edifice from which the only satisfaction they could take away
was knowing they performed a part of its construction? The idea that Humankind is selfish and
greedy is a projection promoted by the small part of Humankind that really is selfish and
greedy.
Where does wealth creation actually occur in the capitalist system?
Nations can do well with the trade, as we have seen with China and Germany, but this comes
at other nation's expense.
In a successful global economy, trade should be balanced over the long term.
Keynes was aware of this in the past, and realised surplus nations were just as much of a
problem as deficit nations in a successful global economy with a long term future.
Zimababwe has lots of money and it's not doing them any favours. Too much money causes
hyper-inflation.
You can just print money, the real wealth in the economy lies somewhere else.
Alan Greenspan tells Paul Ryan the Government can create all the money it wants and there is
no need to save for pensions. https://www.youtube.com/watch?v=DNCZHAQnfGU
What matters is whether the goods and services are there for them to buy with that money.
That's where the real wealth in the economy lies.
Money has no intrinsic value; its value comes from what it can buy.
Zimbabwe has too much money in the economy relative to the goods and services available in
that economy. You need wheelbarrows full of money to buy anything.
It's that GDP thing that measures real wealth creation.
GDP does not include the transfer of existing assets like stocks and real estate.
Inflated asset prices are just inflated asset prices and this can disappear all too easily as
we keep seeing in real estate.
1990s – UK, US (S&L), Canada (Toronto), Scandinavia, Japan
2000s – Iceland, Dubai, US (2008)
2010s – Ireland, Spain, Greece
Get ready to put Australia, Canada, Norway, Sweden and Hong Kong on the list.
They invented the GDP measure in the 1930s, to track real wealth creation in the economy
after they had seen all that apparent wealth in the US stock market disappear in 1929.
There was nothing really there.
How can banks create wealth with bank credit?
The UK used to know before 1980.
https://www.housepricecrash.co.uk/forum/uploads/monthly_2018_02/Screen-Shot-2017-04-21-at-13_53_09.png.e32e8fee4ffd68b566ed5235dc1266c2.png
Before 1980 – banks lending into the right places that result in GDP growth (business
and industry, creating new products and services in the economy)
After 1980 – banks lending into the wrong places that don't result in GDP growth (real
estate and financial speculation)
What happened in 1979?
The UK eliminated corset controls on banking in 1979 and the banks invaded the mortgage
market and this is where the problem starts.
Real estate does make the economy boom, but there is no real wealth creation in inflating
asset prices.
What is really happening?
When you use bank credit to inflate asset prices, the debt rises much faster than GDP.
https://www.housepricecrash.co.uk/forum/uploads/monthly_2018_02/Screen-Shot-2017-04-21-at-13_53_09.png.e32e8fee4ffd68b566ed5235dc1266c2.png
The bank credit of mortgages is bringing future spending power into today.
Bank loans create money and the repayment of debt to banks destroys money.
https://www.bankofengland.co.uk/-/media/boe/files/quarterly-bulletin/2014/money-creation-in-the-modern-economy.pdf
In the real estate boom, new money pours into the economy from mortgage lending, fuelling a
boom in the real economy, which feeds back into the real estate boom.
The Japanese real estate boom of the 1980s was so excessive the people even commented on the
"excess money", and everyone enjoyed spending that excess money in the economy.
In the real estate bust, debt repayments to banks destroy money and push the economy towards
debt deflation (a shrinking money supply).
Japan has been like this for thirty years as they pay back the debts from their 1980s
excesses, it's called a balance sheet recession. https://www.youtube.com/watch?v=8YTyJzmiHGk
Bank loans effectively take future spending and bring it in today.
Jam today, penury tomorrow.
Using future spending power to inflate asset prices today is a mistake that comes from
thinking inflating asset prices creates real wealth.
GDP measures real wealth creation.
Did you know capitalism works best with low housing costs and a low cost of living?
Probably not, you are in the parallel universe of neoliberalism.
William White (BIS, OECD) talks about how economics really changed over one hundred years
ago as classical economics was replaced by neoclassical economics.
He thinks we have been on the wrong path for one hundred years.
Some very important things got lost 100 years ago.
The Mont Pelerin society developed the parallel universe of neoliberalism from
neoclassical economics.
The CBI (Confederation of British Industry) saw the light once they discovered my equation
(Michael Hudson condensed)
Disposable income = wages – (taxes + the cost of living)
"Wait a minute, employees get their money from wages and businesses have to cover high
housing costs in wages reducing profit" the CBI
It's all about the economy, and UK businesses will benefit from low housing costs. High housing costs push up wages and reduce profits. Off-shore to make more profit, you can pay lower wages where the cost of living is lower,
e.g. China; the US and UK are rubbish.
What was Keynes really doing?
Creating a low cost, internationally competitive economy. Keynes's ideas were a solution to the problems of the Great Depression, but we forgot why
he did, what he did.
They tried running an economy on debt in the 1920s. The 1920s roared with debt based consumption and speculation until it all tipped over into
the debt deflation of the Great Depression. No one realised the problems that were building
up in the economy as they used an economics that doesn't look at private debt, neoclassical
economics.
Keynes looked at the problems of the debt based economy and came up with redistribution
through taxation to keep the system running in a sustainable way and he dealt with the
inherent inequality capitalism produced.
The cost of living = housing costs + healthcare costs + student loan costs + food + other
costs of living
Disposable income = wages - (taxes + the cost of living)
High progressive taxation funded a low cost economy with subsidised housing, healthcare,
education and other services to give more disposable income on lower wages.
Employers and employees both win with a low cost of living.
Keynesian ideas went wrong in the 1970s and everyone had forgotten the problems of
neoclassical economics that he originally solved.
Classical economics – observations and deductions from the world of small state,
unregulated capitalism around them
Neoclassical economics – Where did that come from?
Keynesian economics – observations, deductions and fixes for the problems of
neoclassical economics
Neoclassical economics – Why is that back?
We thought small state, unregulated capitalism was something that it wasn't as our ideas
came from neoclassical economics, which has little connection with classical economics.
On bringing it back again, we had lost everything that had been learned in the 1930s, by
which time it had already demonstrated its flaws.
Ultimately, neoliberalism is about privatization and ownership of everything. This is why
it's so important to preserve the Common Good, the vital resources and services that support
earthly existence. The past 40 years has shown what happens when this falls out of balance.
Our value system turns upside down – the sick become more valuable than the healthy, a
violent society provides for the prisons-for-profit system and so on. The biggest upset has
been the privatization of money creation.
This latest secret bank bailout (not really secret as Dodd-Frank has allowed banks to
siphon newly created money from the Fed without Congressional approval. No more public
embarrassment that Hank Paulson had to endure.) They are now up to $690 billion PER WEEK
while the media snoozes. PPPs enjoy the benefits of public money to seed projects for private
gain. The rest of us have to rely on predatory lenders, sinking us to the point of Peak Debt,
where private debt can never be paid off and must be cancelled, as it should be because it
never should've happened in the first place.
"Neoliberalism, which has influenced so much of the conventional thinking about money,
is adamant that the public sector must not create ('print') money, and so public
expenditure must be limited to what the market can 'afford.' Money, in this view, is a
limited resource that the market ensures will be used efficiently. Is public money, then, a
pipe dream? No, for the financial crisis and the response to it undermined this neoliberal
dogma.
The financial sector mismanaged its role as a source of money so badly that the
state had to step in and provide unlimited monetary backing to rescue it. The creation of
money out of thin air by public authorities revealed the inherently political nature of
money. But why, then, was the power to create money ceded to the private sector in the
first place -- and with so little public accountability?And
if money can be created to serve the banks, why not to benefit people and the
environment? "
The Commons should have a shot at revival as the upcoming generation's desires are
outstripped by their incomes and savings. The conflict between desires and reality may give a
boost to alternate notions of what's desirable. Add to this the submersion of cities under
the waves of our expanding oceans, and one gets yet another concrete reason to think that
individual ownership isn't up to the job of inspiring young people.
A Commons of some sort
will be needed to undo the cost of generations of unpaid negative externalities. Fossil
fuels, constant warfare, income inequality, stupendous idiocy of kleptocratic government
these baked in qualities of neo-liberalism are creating a very large, dissatisfied, and
educated population just about anywhere one looks. Suburbia will be on fire, as well as
underwater. Farmlands will be parched, drenched, and exhausted. Where will Larry Summers dump
the garbage?
"... We should also note in passing that the Nobel Prize in Economics is not actually a Nobel Prize. ..."
"... You are right that the Nobel Prize in Economics is not a Nobel Prize and it is awarded by a bank. Plus, Milton Friedman won in 1976: that tells you a lot about why neoclassical economists are mainly chosen. ..."
"... many of the neoclassical models are pseudoscience, unreflective of the real world. ..."
"... Both awards pander to the rentier class. ..."
"... What? Not even a breath about the insane system called globalization, where raw material from all over the world is shipped to China to be processed into finished goods in the most polluting way possible, to have those goods then shipped and trucked to the Amazon horrorhouses and Walmart stores to be bought and then thrown in the trash a few months later. ..."
There is a quote from The Wolf (Harvey Keitel, Pulp Fiction) not apt for a family blog,
but very apt to describe what a Nobel Prize is, and most prizes indeed are. It is about
sucking
Nordhaus reinforces the conservatism of Sveriges Riksbank so he deserves the prize. I
wouldn't ever expect the prize being given to cutting edge studies that question the validity
of day-by-day assumptions embedded in institutions like S.R.
You are right that the Nobel Prize in Economics is not a Nobel Prize and it is awarded
by a bank. Plus, Milton Friedman won in 1976: that tells you a lot about why neoclassical
economists are mainly chosen.
In February 1995, following acrimony within the selection committee pertaining to the
awarding of the 1994 Prize in Economics to John Forbes Nash, the Prize in Economics was
redefined as a prize in social sciences. This made it available to researchers in such
topics as political science, psychology, and sociology.[29][30] Moreover, the composition
of the Economics Prize Committee changed to include two non-economists. This has not been
confirmed by the Economics Prize Committee. The members of the 2007 Economics Prize
Committee are still dominated by economists, as the secretary and four of the five members
are professors of economics.[31] In 1978, Herbert A. Simon, whose PhD was in political
science, became the first non-economist to win the prize,[citation needed] while Daniel
Kahneman, a professor of psychology and international relations at Princeton University is
the first non-economist by profession to win the prize.
It seems strange to me that non-economists would be awarded a prize for the economy. The
bank certainly knows who to select though!
Milton Friedman was monetarist who taught at the premier neoclassical school, the
University of Chicago. Karl Marx was the premier classical (political) economist. The
neoclassical school gradually came to deny land as a distinct factor of production, John
Bates Clark (whom there is an award named after) solidified the conflation of land and
capital.
This is why many of the neoclassical models are pseudoscience, unreflective of the
real world.
What? Not even a breath about the insane system called globalization, where raw
material from all over the world is shipped to China to be processed into finished goods in
the most polluting way possible, to have those goods then shipped and trucked to the Amazon
horrorhouses and Walmart stores to be bought and then thrown in the trash a few months
later.
Cognative dissonanace much? Lots of economic activity there, with nothing to show for it
except a growing heap of trash and Bezos and the Waltons getting richer by hundreds of
millions per day. What a phucking world.
Her premise, that neoliberal economics is past its sell-by date, is almost too little too
late. It was past its sell-by date by 1950 when it was just getting its second foul wind. We
are in this fix because it was so easy to get here. By using oil for energy. Nobody has used
the butterfly metaphor for oil fed climate change, but it describes the mess. Every
individual use of oil/natgas for our modern lifestyle puts a whole series of requirements for
the very maintenance of that lifestyle – which (like her comment that more work hours
propagate not just more emissions but more manufacturing and more consumption is a vicious
circle) expand exponentially. And what she says point blank, "the thing about a sufficiently
high carbon tax is that it is so disruptive of the market that it has to be accompanied by a
robust and comprehensive role for the state" is just pure poetic justice.
We believe this is due to two factors -- the very high carbon footprints of people at
the top and a political economy effect, in which the wealthy have outsized political impact
and are able to forestall effective climate responses.
I have my suspicions about general carbon footprints based on income levels. I suspect
that many less affluent people end up commuting more because of housing usually being more
costly in cities and immediately nearby cities. Think about it for a moment, are all the
affluent neighborhoods close or far from local centers of employment? In my view the
implication is that carbon footprint from driving around is a necessity for large part of
lower income population while car use comes out more as a luxury, a free choice, for more
affluent people – they have the financial means to find housing relatively close to the
work, while lower income people don't have this choice.
Extrapolating more, I would suspect that most of carbon footprint is at least partially a
necessity for lower income people, while the for higher income people the larger carbon
footprint represents free choice and conspicuous consumption – they do it because they
can .
There are really easy ways to decrease carbon footprint: Dense and functional cities to
enable anyone make the climate friendly choices of not driving car around. But there is
extreme opposition to these kind of dense affordable cities, even in my seemingly progressive
nordic home country. Most of all, housing is seen as a open market business instead of
personal right. This is important, as this prevents the EU countries of more forcible
interventions in to the housing markets but this whole situation is just insane right now as
most EU countries get loans at negative rates, they could easily build and rent out housing
at 'market' prices with really low margins and still at profit for the state. In my view
states should intervene forcibly to urban housing markets to push out new quality housing to
disrupt and drop the general market prices at the moment. Many people, and especially working
people, are staying out of larger cities because the general prices are too high for them.
State intervention would enable anyone to make the 'right' choices and then heavier carbon
taxes could be enacted and people would still have free choice to live where they want and
drive car if they want. But this isn't possible because the free market principles are
applied to housing markets by EU antitrust officials and this prevents state
interventions.
The most ridiculous part of this whole thing that ideology of free market capitalism and
how it's applied prevents this, it's more important to preserve the wealth and rights of
owners in the cities instead of doing the right things. Meanwhile neoliberals and european
ordoliberals are shouting with their heads red that debt is bad and demanding that all the
member countries must work hard to reduce their debt levels no matter what happens. These
people say they agree that climate change is real, but his acknowledgement is just cynical
gaslighting from them, as the only actions they will approve are debt reduction, tax
reduction and privatization of public goods. For them, the state is the problem, not the
solution.
Rich and affluent people have hijacked the whole economic discussion and most important is
ideology of protecting property rights and 'individual' freedoms, to the detriment of our
planet and all of us living on it.
Ultimately it's all about population growth, and in particular, government policies aimed
at maximizing population growth, and top-down pressure from the rich to censure any
discussion of this topic.
That's why they recently gave a Nobel Prize to some economists pushing 'solutions' to
poverty in places like India that have been demonstrated over and over not to work: because
the policy that does work is to limit fertility rates (example: China post-Mao), and the the
rich don't want that, because they love cheap labor.
Re: The 'crisis of capitalism' is not the one Europeans think it is.
The article is basically correct but I also think that the author downplays how
devastating these changes have been. It seems like he is arguing that the changes wrought by
capitalism are merely a cultural problem. I think our problems are much worse than just
people being uncomfortable with capitalism invading spheres of life previously left outside
of the market, as important as that issue is.
I think this period is similar to the early modern period where once prosperous peasant
societies were destroyed by policies like the enclosure movement. A recent article in The
Guardian discussed this process.
With subsistence economies destroyed, people had no choice but to work for pennies
simply in order to survive. According to the Oxford economists Henry Phelps Brown and
Sheila Hopkins, real wages declined by up to 70% from the end of the 15th century all the
way through the 17th century. Famines became commonplace and nutrition deteriorated. In
England, average life expectancy fell from 43 years in the 1500s to the low 30s in the
1700s.
The author was discussing Europe so perhaps that explains why he seems to see this as a
cultural issue, but I believe that the United Kingdom is also seeing a rise in deaths of
despair and this trend might spread to the Continent in the future if things get bad
enough.
My point is that the crisis of capitalism is worse than Branko Milanović makes it out
to be. I worry that focusing on things like changing family structure falls into the hands of
left-neoliberals who will say that people just need to be more "progressive" and accept
changes to family life, which is hypocritical given that affluent people are actually
doubling down on the nuclear family model (divorce rates have been dropping among the
well-educated) and the advantages it brings when it comes to life outcomes. It is galling to
hear liberals talk about dysfunction among working-class people as if it were progressive
while they enjoy dual income "power marriages" and make sure their children are given massive
advantages in upbringing.
More generally, the biggest problem is that most people never asked for these changes,
they were forced on ordinary people by elites. It is ridiculous that in the 21st century
humans have to just accept massive and often devastating changes to their lives without
having any voice in the decision to make those changes.
A sense of powerlessness is also driving the widespread populist anger across many
countries. At one time there were powerful labor unions and left-wing political parties that
spoke for ordinary people but these have either declined or disappeared altogether so people
are left looking for allies and populists like Trump and Salvini are happy to benefit from
their anger and desperation.
""Mathematical models demonstrate that far from wealth trickling down to the poor, the
natural inclination of wealth is to flow upward, so that the 'natural' wealth distribution in
a free-market economy is one of complete oligarchy".
I think he's confusing the commercialisation of everyday life with capitalism. The second
is a result of the first looking for new ways of making money out of us, as traditional
options like making things now seem less attractive. So the very fabric of life itself has
now become an endless series of financial calculations, where we are all "customers" instead
of citizens. Even the state now adopts the practices and the vocabulary of the private
sector. But there's no reason why regulated capitalism can't coexist with traditional social
patterns: it's a political choice to allow it to get its greasy fingers on some of the most
important parts of our existence and turn them into financial opportunities.
The real story here is the decline of the extended family, which only really began after
WW2. Previously (and in my experience up until at least the 1960s) different generations
would do different things: grandparents would look after children, grandparents in turn would
be looked after by younger members of the family, uncles would play football with the boys,
aunties would take groups of children to the cinema. There wasn't any other way, really, in
which the basic functions of life could be managed. Members of the family would often live
within walking or cycling distance of each other. Much of this has now been monetised for
profit, but of course only if you have the money to pay for it in the first place. We need to
remember that the "nuclear family" is a very recent development and frankly, only works if
you can somehow buy in the services the extended family used to provide (and people resent
having to do that). And as much as anything else the rise of the nuclear family is the result
of the financialisation of housing, and the destruction of public housing stocks, which
together with the parallel destruction of traditional forms of community employment have
frequently led to families being scattered all over the country, anywhere they can find jobs
and accommodation.
I don't think globalisation has much to do with this, except as an alibi for the
destruction of communities. And I do think it is relatively new, except in the sense that
capitalism has always destroyed everything it touches. For example, clothing was often made
within the family because ready to wear clothing didn't really arrive for ordinary people
until about a century ago. Even then, unless you were wealthy, clothes would be altered to
fit younger children, or modified to suit the latest fashions for adults. Likewise, well
after WW2, many families grew vegetables in their back garden; and cars, washing machines and
even valve radios could be repaired at home if you were reasonably handy.
Its an interesting feature of Asian capitalism in that its been able to 'free ride' on
tight family bonds – extended families have allowed it to avoid the need to provide the
sort of social safety net that even capitalists acknowledged was necessary in Europe to
prevent social unrest (hence Christian Democracy). As Asian countries follow the west in
gradually loosening family bonds (especially in China, where they seem far more delicate than
in Japan/South Korea), etc, I'm curious to see how they'll deal with it.
"(especially in China, where they seem far more delicate than in Japan/South Korea)"
I confess to not knowing as much about China as I should, or at least, not knowing much
about family life there. Why do you suggest the bonds there are weaker? Some sort of systemic
issue?
"There?" Experience as a child in San Francisco witnessing classmates first of generation
Chinese immigrant parents reflects the strength of patience and delayed gratification. Fifty
pound three dollars sack of white rice per month, handful of wilted vegetables bought for
pennies. Meat as a condiment, if at all, working jobs as waiters, busboys, or the real plum,
boring job as warehouseman for government, the entire family living in one basement
apartment. Clothing handed down, no car, nothing new bought. Social services and Great
Society welfare provided by race or language based non-profits, or government, taken full
advantage of for older parents with no reported income.
People from same village in China, possibly related, often not, pool their money, get down
payment on apartment house, entire family moves into bigger apartment, basement rented to
other newly arrived immigrants.
Meanwhile, affluent fourth generation American kids get high and do their own thing,
pursuing a music or art career.
Fast forward fifty years. 70%+ percent of property in city owned by Chinese surnamed
people. Children of original family now sitting on tens of millions of dollars of apartments,
collecting huge rents out of starry eyed techbros and 'bras from Kansas.
Artists and musicians living in cars, if lucky enough to have one, or in a tent on the
street.
Real fundamental reason for the stunning rise of Asia: their values. Hard work, savings,
family, education, and current pleasures foregone in favor of future gains.
The U.S. had a really cushy time, protected by two oceans, with highly navigable rivers,
lots of arable land in a temperate climate zone, and legal structures in place that fostered
industrialization. That enabled us to win WW II and then write the rules afterwards:
everybody else had to work hard, earn a profit, then buy dollars before they could then buy a
barrel of oil. Whereas we could just print oil. Such a tailwind! Kept us ahead for decades.
But alas all good things must end.
'Hard work, savings, family, education, and current pleasures foregone in favor of future
gains.'
Yep, they use to be western values which you could find in the UK, the US, Australia, etc.
In a mostly free economy they were winning values and helped people work their way up the
social ladder.
In the rigged economy that we have these days, they do not work so well so a lot of people
have given up on them. Of course if the economy goes south in a big way, they may once again
become good traits to practice.
400,000 GM-made trucks didn't hurt. A massive and inhospitable, marshy terrain. A
willingness to apply human cannon fodder. A military philosophy that said "quantity has a
quality all its own". Willingness to scorch earth. Willingness to move more than 100,000
factories past the Urals. Dogged courage of the people.
In my experience China has become a much more atomised society since it embarked on its
great experiment with high growth capitalism – exacerbated by the one child policy. Its
a very difficult thing to measure I think, but while there certainly are very tight Chinese
families, I think there are a lot of individual Chinese cast adrift in those huge cities
without the cultural adaption to individualism which is normal in the west.
This system is breaking quickly in Korea. The burden of caring for elders falls on the
oldest son, and there's a lot of chafing at these responsibilities, especially now that women
are equally represented in Korean academic and office spaces. Throw in the increasing age of
marriage and childbearing and you get people aging faster than their offspring can build up a
nest egg.
It's quite common to see elderly people doing bottom-of-the-barrel manual labor to survive
in Seoul. In my neighborhood, an old couple living next door worked from sun-up to sun-down
collecting cardboard with their moped-pulled cart. Collecting trash for recyling is almost
entirely the domain of the over-50 set. Others sell vegetables on sidewalks, and some resort
to Korea's various forms of sex work (I say only half-jokingly that prostitution is the
bedrock of Korea's economy)
I came across this recently, sorry if it was via NC! I found it very interesting, and it's
pertnent to this family stuff.
Western Individualism Arose from Incest Taboo – Researchers link a Catholic Church ban
on cousins marrying in the Middle Ages to the emergence of a way of life that made the West
an outlier https://www.scientificamerican.com/article/western-individualism-arose-from-incest-taboo/
the church's obsession with incest and its determination to wipe out the marriages
between cousins that those societies were built on. The result, the paper says, was the rise
of "small, nuclear households, weak family ties, and residential mobility," along with less
conformity, more individuality, and, ultimately, a set of values and a psychological outlook
that characterize the Western world. The impact of this change was clear: the longer a
society's exposure to the church, the greater the effect.
The West itself is not uniform in kinship intensity. Working with cousin-marriage data from
92 provinces in Italy (derived from church records of requests for dispensations to allow the
marriages), the researchers write, they found that "Italians from provinces with higher rates
of cousin marriage take more loans from family and friends (instead of from banks), use fewer
checks (preferring cash), and keep more of their wealth in cash instead of in banks, stocks,
or other financial assets." They were also observed to make fewer voluntary, unpaid blood
donations.
The Western, educated, industrialized, rich and democratic (WEIRD) societies of Western
Europe and what the authors call "their cultural descendants in North America and Australia"
have long been recognized as outliers among the world's populations for their independence of
thought and other traits, such as a willingness to trust strangers.
(- I'm definitely not sure about that very last bit!)
Contrast with this:
"When brothers dwell together and one of them dies and leaves no son, the wife of the
deceased shall not be married to a stranger, outside the family. Her husband's brother shall
unite with her: he shall take her as his wife and perform the levir's duty. The first son
that she bears shall be accounted to the dead brother.."
Keeping it in the family. Bet that led to a lot of fratricides
Multiple Husbands | National Geographic (the husbands are brothers) https://youtu.be/d4yjrDSvze0
4 minutes – fascinating. A viable birth rate control.
I've also heard of other groups where women marry brothers in regions where the men go off
tending sheep and yaks etc for extended periods.
Polyandry is usually practice in places where it is **very** difficult to make a living;
having multiple brothers marry one woman was sometimes the only to get the resources to have
children. Otherwise, no children for anyone.
I know of two cases where the husband died and the wife married the brother very quickly:
one of these cases was my maternal grandmother, who had children already, and needed the
support. This situation only seems unusual in the modern American cultural bubble.
I'd say the real crisis of capitalism, or the world economic system, isn't the rise of
inequality or the commodification of life (didn't Marx claim that capitalism tears up all
pre-existing social relations?).
It's the climate emergency and environmental collapse, undermining the foundations on which
the entire world economy rests. Without a planet to support us, we can't do much except die,
and the economy is, in a way, the sum of what we do. Death of us, or at any rate our
civilisation, means death of the economy.
My thoughts too, there are several crises converging.
One is what Milanovic is onto, which I would name the commodification of cultural
reproduction, which won't end well, on top of the exhaustion of fossil fuels based
industrialization cubed by climate change.
It's easy to get preoccupied by one, another or the other, but in the end they are all an
integrated reaction to humanity letting it's collective Ego remake the world according to the
dictates of its' collective Id. But we do now have the collective knowledge and wisdom to
confront this reality through a communicative infrastructure finally broad enough to address
the scope of the challenge, if we can act quickly enough.
Ugh, another amp-infested link, this one sneaky, rather than a readily-visible trailing
/amp, we have 'amp' sneaked in in place of the usual 'www' at start of the URL. Thanks, evil
f*ckers at Google! Here is the original uncorrupted link the Guardian article:
That clip of AOC is amazing. She's got a serious talent in public speaking and not just
sounding good. She shows an ability to communicate important ideas and concepts that can
change minds.
It's been very visible at her events for bernie, too.
Maybe young and inexperienced in some cases.
Maybe pushed to go along in some cases in order to get a few crumbs from pelosi AOC base in
congress remains small.
A little like complaints of Bernie maybe he's picking his fights, and maybe he's not perfect.
But they're both way better than a lesser evil, and who else?
She demonstrates her ignorance and political extremism yet again.
From the abstract of "
The value of the world's ecosystem services and natural capital ," Costanza et al., 1996
– a paper which I've heard sort of started the field of ecological economics: For the entire biosphere, the value (most of which is outside the market) is estimated to
be in the range of US$16–54 trillion per year, with an average of US$33 trillion per
year.
Thus we humans, being a part of the biosphere, are collectively worth less than
US$16–54 trillion per year. And Costanza's a professor and vice chancellor, with a PhD.
AOC's got a measly BA, so what does she know about the value of life?
xkeys: You forget the /s sign? What has a "measly BA" got to do with not "know(ing) about
the value of life?" Having a PhD does not necessarily mean a person knows more than a
non-PhD.
I would rather hear about AOC's "ignorance and political extremism" than your take on this
or any subject.
I had been wondering what this /s thing was, but I probably wouldn't have used it if I'd
known. It seemed unnecessary.
Sorry if you took me seriously. I think she not only understands, but promotes the value of
life. Unlike so many critters. It's great she's in there doing what she does. We need more
like her – lots more, fast.
(I would like to hear from NC commenters if I've misunderstood Costanza. Does the paper
really claim that humanity is worth less than $X trillion/year, as the abstract appears to
imply? I've skimmed it for any unusual definitions of biosphere, but noticed none.)
Don't feel bad, it is INCREDIBLY difficult to tell when people are being sarcastic on the
internet because there are no verbal or gesticular cues to it the way there is in person to
person contact. Thats why we use the /sarc tag to indicate sarcasm, because otherwise people
may take the comment at face value. Its not required, of course, but not using it runs the
risk of people taking the comment at face value, which is very easy to do because text
doesn't convey context the way speech does.
Yes, I'm going to use it in future!
I thought "a measly BA" would give the game away, but as you say, it's hard to tell on the
net. It so happens I'm no respecter at all of academic qualifications in and of themselves.
I've known too many idiots with degrees spouting patent nonsense for that. Eg most economists
(NC's economists definitely excepted!)? And vice-versa.
It doesn't have to be Yves, Lambert or an economist. Just someone whose read enough of
this stuff to have a handle on it. I just think it sounds utterly preposterous.
It makes some sort of sense to say that destroying 1% of the biosphere will result in $X/year
loss. Could be a way of evaluating our options, for example.
That does not mean destroying 10% will result in $10 times X/year economic loss; probably
more like $100 times X, whichever way you measure it.
Long before 90%, the only living things left would probably be the deep subterranean bacteria
and archaea, which are relatively insulated from whatever we do to the air, land and oceans.
I doubt if they'd have much room in their economy for dollars or GDP.
At 100% biosphere destruction, the earth is a lifeless planet by definition. Surely the real
cost is infinite? And what conceivable meaning would a financial cost, price or value have by
that stage?
Any offers?
Aaron is no longer with DemocracyNow. He now has a show "PushBack" on The Gray Zone.
https://thegrayzone.com/pushback/ He also disagreed
with DN about their coverage of the RussiaRussiaRussia hoax. IMHO I think DN just wants to be
more about nostalgic and being more mainstream. I no longer rely on it for my news daily.
By "Aaron on DN" I meant, Aaron on the subject of DN.
I know this has the potential to be ageist, but I can't help wondering if this is yet
another case of individuals and entire organizations "evolving" over time in a more
conservative direction based on whatever pressures. The fact that The Intercept has totally
eclipsed them, and in fact the entire left media, when it comes to major stories, should be a
wakeup.
To add to that, I'd also recommend Taibbi and Katie Halper's new podcost "Useful Idiots".
They've had some good guests so far, and lead the show off with some light-hearted
commentary, but from a perspective outside of the acceptable range in most media.
I think Krystal and Saagar are doing the best political commentary anywhere. Her post
yesterday about the long knives coming for Bernie from the Obama and Hilary camps is just
stellar stuff: https://www.youtube.com/watch?v=xfRT7rs2Ea4
I think that you may have a point. If I just followed the main news outlets, I would have
a totally distorted view of what was going on in the world and being led to support causes
that by rights I should be totally against. I too listen to NC, Jimmy Dore, Krystal &
Saager, Katie Halper, Aaron Maté, Caitlin Johnstone and a bunch of others – all
of them prophets without honour.
You see, free markets are a great idea in theory. Or you can call it "capitalism", or
combine the two and say "free market capitalism". There's very little wrong with it in theory.
You have an enormous multitude of participants in an utterly complex web of transitions, too
complex for the human mind to comprehend, and in the end that web figures out what values all
sorts of things, and actions etc., have.
I don't think capitalism in itself is a bad thing; what people don't like is when it veers
into neo-liberalism, when everything is for sale, when communities or their governments no
longer own anything, when roads and hospitals and public services and everything that holds
people together in a given setting is being sold off to the highest bidder. There are many
things that have values other than monetary ones, and neo-liberalism denies that. Capitalism in
itself, not so much.
It's like nature, really, like evolution, but it's Darwin AND empathy, individuals AND
groups. The problem is, and this is where it diverges from nature, you have to make sure the
markets remain free, that certain participants -or groups thereof- don't bend the rules in
their own favor. In that sense it's very similar to what the human race has been doing to
nature for a long time, and increasingly so.
Now, if you limit the discussion to finance and economics, there would appear to be one
institution that's in an ideal place to make sure that this "rule-bending" doesn't take place,
that markets are fair and free, or as free as can be. That institution is a central bank. But
whaddaya know, central banks do the exact opposite: they are the ones making sure markets are
not free.
In the ideal picture, free markets are -or would be- self-correcting, and have an inbuilt
self-regulating mechanism. If and when prices go up too much, the system will make sure they go
lower, and vice versa. It's what we know from physics and biology as a negative -self
correcting- feedback loop. The self-correcting mechanism only activates if the system has
veered too much in one direction, but we fail to see that as good thing when applied to both
directions, too high and too low (yes, Goldilocks, exactly).
It's only when people start tweaking and interfering with the system, that it fails.
Negative feedback vs positive feedback are misunderstood terms simply because of their
connotation. After all, who wants anything negative? But this is important in the free markets
topic, because as soon as a central bank starts interfering in, name an example, housing prices
in a country, the system automatically switches from negative feedback to positive -runaway-
feedback, there is no middle ground and there is no way out anymore, other than a major crash
or even collapse.
Well, we're well on our way to one of those. Because the Fed refused to let the free market
system work. They, and the banks they represent, wanted the way up but then refused the way
down. And now we're stuck in a mindless positive feedback loop (new highs in stocks on a daily
basis), and there's nothing Jay Powell and his minions can do anymore to correct it.
The system has its own correction mechanism, but Greenspan, Bernanke, Yellen and now Powell
thought they could do better. Or maybe they didn't and they just wanted their banker friends to
haul in all the loot, it doesn't even matter anymore. They've guaranteed that there are no free
markets, because they murdered self-correction.
Same goes, again, for ECB and BOJ; they're just Fed followers (only often even crazier). In
fact since they have no petrodollar, they don't just follow, they have to do the Fed one
better. Which is why they have negative interest rates -and the US does not -yet-: it's the
only way to compete with the reserve currency. Of course today even the Fed, and "even even"
the PBOC, are discussing moving to negative rates, and by now we're truly talking lemmings on
top of a cliff.
"Let's throw $10 trillion at the wall just so home prices or stock prices don't go down!"
Yeah, but if they've been rising a lot, maybe that's the only direction they can and should go.
It may not be nice for banks and so-called "investors", but it's the only way to keep the
system healthy. If you don't allow for the negative feedback self-correction, you can only
create much bigger problems than you already have. And then you will get negative feedback
squared and cubed.
Author conflicts himself in the article. This paragraph is utterly stupid:
"I don't think capitalism in itself is a bad thing; what people don't like is when it veers
into neo-liberalism, when everything is for sale, when communities or their governments no
longer own anything, when roads and hospitals and public services and everything that holds
people together in a given setting is being sold off to the highest bidder. There are many
things that have values other than monetary ones, and neo-liberalism denies that. Capitalism in
itself, not so much."
We have a healthcare cartel and massively subsidized costs (medicare, etc). It's not a free
market at all. It's a cartel. The Fed is a true monopoly. Free markets would be much better for
roads, hospitals and public services - all of those are horrible everywhere I've lived.
Investing is the biggest scam this side of the milkyway. I see it all the time and its
nailing future generations to the deck of a sinking ship.
Everytime I see one of those multi million or multi billion jobs, like a shopping mall or
some resort going up all I can say is, "Its never going to get paid off in the investors
lifetime. Since most of the people that invested in them are in their 60's, 70's and 80's.
They just skim the money off the top until the day they die and all that will be left are
hollowed out abandoned shells for the next generations to pay taxes on just to have them torn
down and the whole polluted mess cleaned up.
NO WAY most of these projects will ever get paid off before they're totally useless to
society. Look at all those falling down apartment buildings in the cities. Once a great
investment now a great pile of worthless junk.
" In the ideal picture, free markets are -or would be- self-correcting"
Yeppers. That is why when globalists exclaim "we have a LABOR SHORTAGE in ________
industry", it's b.s.
If you have a labor shortage, the rules of supply and demand would dictate that the company
owners must pay higher prices (wages) to employees to retain them, and attract new ones. It's
exactly what happens to consumers when there is a lemon, tomato or gas shortage -- prices go up
and we all pay. When companies attract employees with higher wages, the market responds -- kids
in school realize if they want a job, they could go into that industry and get snapped up
easily -- since there's a supposed "labor shortage". And voila, no more "labor shortage" and
the market corrects itself.
That should happen, but it doesn't, as globalists manipulate the market by allowing in more
surplus labor (mass immigration) from developing countries, which is labor market manipulation
-- forever gaming the system so they always have more leverage and the upper-hand in wage
negotiations. If you have a "labor shortage" and are offering minimum wage, no one is going to
step up for those jobs, other than the immigrants you just flooded into your country.
"Ruthless Quotas at Amazon Are Maiming Employees" [
The Atlantic ].
"[Candice Dixon] started the job in April 2018, and within two months, or nearly 100,000
items, the lifting had destroyed her back.
An Amazon-approved doctor said she had bulging discs
and diagnosed her with a back sprain, joint inflammation, and chronic pain, determining that
her injuries were 100 percent due to her job. She could no longer work at Amazon. Today, she
can barely climb stairs.
Walking her dog, doing the dishes, getting out of her chair --
everything is painful. According to her medical records, her condition is unlikely to improve.
So this holiday-shopping season, as Amazon's ferocious speed is on full display, Dixon is at a
standstill.
She told Reveal in mid-October that her workers'-compensation settlement was about
to run out. She was struggling to land a new job and worried she'd lose her home." •
However, Dixon can take comfort in the knowledge that she's done her little bit to send Jeff
Bezos to the moon. So there's that.
The problem is compounded by the lousy reputation Economics has acquired among proponents of
an inclusive economy. Too often the discipline is viewed as the source of the policies that
have produced the excesses and fragilities of our time. Mainstream economics and neoliberalism
are viewed as one and the same.
We beg to differ:
Many of the dominant policy ideas of the last few decades are supported neither by sound
economics nor by good evidence. Neoliberalism – or market fundamentalism, market
fetishism, etc. -- is a perversion of mainstream economics, rather than an application
thereof. And contemporary economics research is rife with new ideas for creating a more
inclusive society. But it is up to us economists to convince their audience about the merits
of these claims.
As important as specific policy prescriptions in different domains of economics are, we also
have a bigger claim: our essays produce overarching themes that taken together provide a
coherent overall vision for economic policy that stands as a genuine alternative to market
fundamentalism. This is a vision that rejects the reliance on competitive equilibrium as a
realistic benchmark, understands that the world is always second-best, highlights the role of
power imbalances in shaping existing institutional arrangements, and emphasizes the need for
imagination in devising alternatives that are both more inclusive and more conducive to
prosperity. We strive for a whole that is greater than the sum of the parts.
We do not intend to duplicate the excellent work being done in policy think tanks in
Washington, D.C. and elsewhere. Many economists engage with these think tanks and their ideas
get airing through them. Our initiative is different in that it is a network of academic
economists. We are committed to policy proposals based on sound scholarship. But we also care
about what these policy ideas imply in turn for the way in which we should practice Economics
in the class room and in the seminar room. And we are less influenced by immediate political
constraints or opportunities of the policy scene in Washington, D.C.
We believe Economics can be an ally of inclusive prosperity. That is why we have embarked on
this project. The initial set of policy briefs on the EfIP website is our first step. We hope
they will stimulate and accelerate academic economists' sustained engagement with creative
ideas for inclusive prosperity and that we will be able to follow up soon with an even richer
set of policy discussions.
"... Despite massive amounts of evidence to the contrary, such people now enthusiastically whitewash the decades preceding Trump to turn it into a paragon of human liberty, justice and economic wonder. You don't have to look deep to understand that resistance liberals are now actually conservatives, brimming with nostalgia for the days before significant numbers of people became wise to what's been happening all along. ..."
"... Lying to yourself about history is one of the most dangerous things you can do. If you can't accept where we've been, and that Trump's election is a symptom of decades of rot as opposed to year zero of a dangerous new world, you'll never come to any useful conclusions ..."
"... Irrespective of what you think of Bernie Sanders and his policies, you can at least appreciate the fact his supporters focus on policy and real issues ..."
"... An illiberal democracy, also called a partial democracy, low intensity democracy, empty democracy, hybrid regime or guided democracy, is a governing system in which although elections take place, citizens are cut off from knowledge about the activities of those who exercise real power because of the lack of civil liberties; thus it is not an "open society". There are many countries "that are categorized as neither 'free' nor 'not free', but as 'probably free', falling somewhere between democratic and nondemocratic regimes". This may be because a constitution limiting government powers exists, but those in power ignore its liberties, or because an adequate legal constitutional framework of liberties does not exist. ..."
From a big picture perspective, the largest rift in American politics is between those
willing to admit reality and those clinging to a dishonest perception of a past that never
actually existed. Ironically, those who most frequently use "post-truth" to describe our
current era tend to be those with the most distorted view of what was really happening during
the Clinton/Bush/Obama reign.
Despite massive amounts of evidence to the contrary, such people now enthusiastically
whitewash the decades preceding Trump to turn it into a paragon of human liberty, justice and
economic wonder. You don't have to look deep to understand that resistance liberals are now
actually conservatives, brimming with nostalgia for the days before significant numbers of
people became wise to what's been happening all along.
They want to forget about the bipartisan coverup of Saudi Arabia's involvement in 9/11, all
the wars based on lies, and the indisputable imperial crimes disclosed by Wikileaks, Snowden
and others. They want to pretend Wall Street crooks weren't bailed out and made even more
powerful by the Bush/Obama tag team, despite ostensible ideological differences between the
two. They want to forget Epstein Didn't Kill Himself.
Lying to yourself about history is one of the most dangerous things you can do. If you can't
accept where we've been, and that Trump's election is a symptom of decades of rot as opposed to
year zero of a dangerous new world, you'll never come to any useful conclusions. As such, the
most meaningful fracture in American society today is between those who've accepted that we've
been lied to for a very long time, and those who think everything was perfectly fine before
Trump. There's no real room for a productive discussion between such groups because one of them
just wants to get rid of orange man, while the other is focused on what's to come. One side
actually believes a liberal world order existed in the recent past, while the other
fundamentally recognizes this was mostly propaganda based on myth.
Irrespective of what you think of Bernie Sanders and his policies, you can at least
appreciate the fact his supporters focus on policy and real issues. In contrast, resistance
liberals just desperately scramble to put up whoever they think can take us back to a
make-believe world of the recent past. This distinction is actually everything. It's the
difference between people who've at least rejected the status quo and those who want to rewind
history and perform a do-over of the past forty years.
A meaningful understanding that unites populists across the ideological spectrum is the
basic acceptance that the status quo is pernicious and unsalvageable, while the status
quo-promoting opposition focuses on Trump the man while conveniently ignoring the worst of his
policies because they're essentially just a continuation of Bush/Clinton/Obama. It's the most
shortsighted and destructive response to Trump imaginable. It's also why the Trump-era alliance
of corporate, imperialist Democrats and rightwing Bush-era neoconservatives makes perfect
sense, as twisted and deranged as it might seem at first. With some minor distinctions, these
people share nostalgia for the same thing.
This sort of political environment is extremely unhealthy because it places an intentional
and enormous pressure on everyone to choose between dedicating every fiber of your being to
removing Trump at all costs or supporting him. This anti-intellectualism promotes an ends
justifies the means attitude on all sides. In other words, it turns more and more people into
rhinoceroses.
Eugène Ionesco's masterpiece, Rhinoceros, is about a central European town where
the citizens turn, one by one, into rhinoceroses. Once changed, they do what rhinoceroses do,
which is rampage through the town, destroying everything in their path. People are a little
puzzled at first, what with their fellow citizens just turning into rampaging rhinos out of
the blue, but even that slight puzzlement fades quickly enough. Soon it's just the New
Normal. Soon it's just the way things are a good thing, even. Only one man resists the siren
call of rhinocerosness, and that choice brings nothing but pain and existential doubt, as he
is utterly profoundly alone.
A political environment where you're pressured to choose between some ridiculous binary of
"we must remove Trump at all costs" or go gung-ho MAGA, is a rhinoceros generating machine. The
only thing that happens when you channel your inner rhinoceros to defeat rhinoceroses, is you
get more rhinoceroses. And that's exactly what's happening.
The truth of the matter is the U.S. is an illiberal democracy in practice,
despite various myths to the contrary.
An illiberal democracy, also called a partial democracy, low intensity democracy, empty
democracy, hybrid regime or guided democracy, is a governing system in which although
elections take place, citizens are cut off from knowledge about the activities of those who
exercise real power because of the lack of civil liberties; thus it is not an "open society".
There are many countries "that are categorized as neither 'free' nor 'not free', but as
'probably free', falling somewhere between democratic and nondemocratic regimes". This may be
because a constitution limiting government powers exists, but those in power ignore its
liberties, or because an adequate legal constitutional framework of liberties does not
exist.
It's not a new thing by any means, but it's getting worse by the day. Though many of us
remain in denial, the American response to various crises throughout the 21st century was
completely illiberal. As devastating as they were, the attacks of September 11, 2001 did
limited damage compared to the destruction caused by our insane response to them. Similarly,
any direct damage caused by the election and policies of Donald Trump pales in comparison to
the damage being done by the intelligence agency-led "resistance" to him.
So are we all rhinoceroses now?
We don't have to be. Turning into a rhinoceros happens easily if you're unaware of what's
happening and not grounded in principles, but ultimately it is a choice. The decision to
discard ethics and embrace dishonesty in order to achieve political ends is always a choice. As
such, the most daunting challenge we face now and in the chaotic years ahead is to become
better as others become worse. A new world is undoubtably on the horizon, but we don't yet know
what sort of world it'll be. It's either going to be a major improvement, or it'll go the other
way, but one thing's for certain -- it can't stay the way it is much longer.
If we embrace an ends justifies the means philosophy, it's going to be game over for a
generation. The moment you accept this tactic is the moment you stoop down to the level of your
adversaries and become just like them. It then becomes a free-for-all for tyrants where
everything is suddenly on the table and no deed is beyond the pale. It's happened many times
before and it can happen again. It's what happens when everyone turns into rhinoceroses.
* * *
If you enjoyed this, I suggest you check out the following 2017 posts. It's never been more
important to stay conscious and maintain a strong ethical framework.
In the past, I thought that Hong Kong was dominated by a narrow rich oligarchy with rules
that kept the input from hoi-polloi to the minimum, which meant low taxes for business and the
rich etc. From the point of view of Cato Institute it is the definition of paradise, but the
life in paradise may have its discontent.
Compare with Chile that has exemplary record of "property rights" since Pinochet era with a
constitution that makes it very hard to change, and yet, the locals are not happy and neither
Russian nor Bolivarian agitators were identfied.
Or Colombia, another shiny bastion of democracy, allowing very wide spectrum of relationship
between bosses and workers (assassinations of uppity organizers included). I would be curious
if systematic and widespread murder in the defense of freedom merits downgrading in Cato
Institute world freedom index.
Here's a handy piece of advice for non-American nations around the world: Whenever some
American starts running its mouth about crusading for Freedom, Democracy, Human Rights, or
similar propaganda slogans, get ready to defend your nation. These slogans are merely the
American version of the White Man's Burden and Western Civilizing Mission.
They are a clear and present threat that the American predator is slouching towards
you.
So Trump is coaching us deplorables that freedom is literally nonsense unless we say
"freedom from ____ ". [we have to fill in the blank space to make any sense!]
I am sure he knows that. Doesn't he? I am sure you, dear reader,knows it, too.
Trump wants freedom from taxation. And he wants to be free to oppress others. Also, see
Hudson's definition of the term in his J is for Junk Economics as Trump was totally
schooled in neoliberal economics.
"Hong Kong is a repressive police state" says Joshua Wong, and yet it is consistently near
the top of the list in the Cato Institute world freedom index.
Chris Hedges is our very own modern day Thomas Paine. Too bad most the sheep don't even
know he exists let alone be fired by his deeply powerful words and ideas. He is so dangerous
he is universally banned by any and all major media. He is so smart, so well read and so
incredibly morally powerful, they make sure only those few who like myself, go looking can
actually find him.
I only recently discovered Hedges myself. Needless to say, his speeches have blown my
mind. It only requires one to take a look at the world around us to see he speaks the truth.
If only more would wake up to this truth.
renderer-text-content expanded"> There is this Frank Zappa quote, I keep thinking of
when listening to Chris Hedges "The illusion of freedom will continue as long as it's
profitable to continue the illusion. At the point where the illusion becomes too expensive to
maintain, they will just take down the scenery, they will pull back the curtains, they will
move the tables and chairs out of the way and you will see the brick wall at the back of the
theater." The illusion is hastily crumbling ... thanks CH for wording the decay so
clearly
Four cops were recently indicted for beating an under cover cop posing as a protester
during the recent St Louis race riots. Chris is absolutely correct when he says antifa is
half cops. The oligarchs want Marshall Law. And cops are playing their part in seeing that it
comes to pass.
Bill Clinton destroyed the USA economy and middle class like no president has ever done.
Bush II and Obama exacerbated the destruction by the hundred folds.
I believe Hedges statement that "the true correctives to society were social movements
that never achieved formal political power" is perhaps one of the most important things for
each of us to understand.
I watched this with interest and curiosity and growing skepticism although he makes some
killer points and cites some extremely disturbing facts; above all he accepts and
uncritically so the American narrative of history.
The message from democrats is "hey we're not bigots". Most people (repubs+dems) aren't. If
they keep calling on that for energy the Dems will forever continue to lose. If they don't
come back to the working class they might as well just call themselves conservatives.
Those of us who seek the truth can't stop looking under every stone. The truth will set
you free but you must share it with those who are ready to hear it and hide it from those who
can hurt you for exposing it. MT
"A Society that looses the capacity for the sacred cannibalizes itself until it dies
because it exploits the natural world as well as human beings to the point of collapse."
I believe Hedges statement that "the true correctives to society were social movements
that never achieved formal political power" is perhaps one of the most important things for
each of us to understand.
I watched this with interest and curiosity and growing skepticism although he makes some
killer points and cites some extremely disturbing facts; above all he accepts and
uncritically so the American narrative of history. The Progressive movement, for example,
(written into American history as being far more important that it ever really was,) unlike
Socialism or Communism was primarily just a literary and a trendy intellectually movement
that attempted, (unconvincingly,) to persuade poor, exploited and abused Americans that non
of those other political movements, (reactive and grass-roots,) were needed here and that
capitalism could and might of itself, cure itself; it conceded little, promised much and
unlike either Communism or Socialism delivered fuck all. Personally I remain unconvinced also
by, "climate science," (which he takes as given,) and which seems to to me to depend far too
much on faith and self important repeatedly insisting that it's true backed by lurid and
hysterical propaganda and not nearly enough on rational scientific argument, personally I
can't make head nor tail of the science behind it ? (it may well be true, or not; I can't
tell.) But above all and stripped of it his pretensions his argument is just typical theist,
(of any flavor you like,) end of times claptrap all the other systems have failed, (China for
example somewhat gives the lie to death of Communism by the way and so on,) the end is neigh
and all that is left to do is for people to turn to character out of first century fairly
story. I wish him luck with that.
The message from democrats is "hey we're not bigots". Most people (repubs+dems) aren't. If
they keep calling on that for energy the Dems will forever continue to lose. If they don't
come back to the working class they might as well just call themselves conservatives.
I have always loved Chris Hedges, but ever since becoming fully awake it pains me to see
how he will take gigantic detours of imagination to never mention Israel, AIPAC or Zionism,
and their complete takeover of the US. What a shame.
The continued growth of unproductive debt against the low or nonexistent growth of GDP is
the recipe for collapse, for the whole world economic system.
I agree with Chris about the tragedy of the Liberal Church. Making good through identity
politics however, is every bit as heretical and tragic as Evangelical Republican corrupted
church think, in my humble, Christian opinion.
The death of the present western hemisphere governments and "democratic" institutions must
die right now for humanity to be saved from the zombies that rule it. 'Cannibalization" of
oikonomia was my idea, as well as of William Engdahl. l am glad hearing Hedges to adopt the
expression of truth. ( November 2019. from Phthia , Hellas ).
ass="comment-renderer-text-content expanded"> Gosh , especially that last conclusion
,was terrific so I want to paste the whole of that Auden poem here:- September 1, 1939 W. H.
Auden - 1907-1973
... ... ...
I sit in one of the dives
On Fifty-second Street
Uncertain and afraid
As the clever hopes expire
Of a low dishonest decade:
Waves of anger and fear
Circulate over the bright
And darkened lands of the earth,
Obsessing our private lives;
The unmentionable odour of death
Offends the September night.
Political theorist Wendy Brown's latest book, In the Ruins of
Neoliberalism: The Rise of Antidemocratic Politics in the West , traces the intellectual
roots of neoliberalism and reveals how an anti-democratic project unleashed monsters –
from plutocrats to neo-fascists – that its mid-20 th century visionaries
failed to anticipate. She joins the Institute for New Economic Thinking to discuss how the
flawed blueprint for markets and the less-discussed focus on morality gave rise to threats to
democracy and society that are distinct from what has come before.
Lynn Parramore: To many people, neoliberalism is about economic agendas. But your book
explores what you describe as the moral aspect of the neoliberal project. Why is this
significant?
Wendy Brown: Most critical engagement with neoliberalism focuses on economic policy
– deregulation, privatization, regressive taxation, union busting and the extreme
inequality and instability these generate. However, there is another aspect to neoliberalism,
apparent both in its intellectual foundations and its actual roll-out, that mirrors these moves
in the sphere of traditional morality. All the early schools of neoliberalism (Chicago,
Austrian, Freiburg, Virginia) affirmed markets and the importance of states supporting without
intervening in them.
But they also all affirmed the importance of traditional morality (centered in the
patriarchal family and private property) and the importance of states supporting without
intervening in it. They all supported expanding its reach from the private into the civic
sphere and rolling back social justice previsions that conflict with it. Neoliberalism thus
aims to de-regulate the social sphere in a way that parallels the de-regulation of markets.
Concretely this means challenging, in the name of freedom, not only regulatory and
redistributive economic policy but policies aimed at gender, sexual and racial equality. It
means legitimating assertions of personal freedom against equality mandates (and when
corporations are identified as persons, they too are empowered to assert such freedom). Because
neoliberalism has everywhere carried this moral project in addition to its economic one, and
because it has everywhere opposed freedom to state imposed social justice or social protection
of the vulnerable, the meaning of liberalism has been fundamentally altered in the past four
decades.
That's how it is possible to be simultaneously libertarian, ethnonationalist and patriarchal
today: The right's contemporary attack on "social justice warriors" is straight out of
Hayek.
LP: You discuss economist and philosopher Friedrich von Hayek at length in your book.
How would you distribute responsibility to him compared to other champions of conservative
formulations for how neoliberalism has played out? What were his blind spots, which seem
evidenced today in the rise of right-wing forces and angry populations around the world?
WB: Margaret Thatcher thumped Hayek's The Constitution of
Liberty and declared it the bible of her project. She studied it, believed it, and
sought to realize it. Reagan imbibed a lot of Thatcherism. Both aimed to implement the Hayekian
view of markets, morals and undemocratic statism. Both accepted his demonization of society
(Thatcher famously quotes him, "there's no such thing") and his view that state policies aimed
at the good for society are already on the road to totalitarianism. Both affirmed traditional
morality in combination with deregulated markets and attacks on organized labor.
I am not arguing that Hayek is the dominant influence for all times and places of
neoliberalization over the past four decades -- obviously the Chicago Boys [Chilean economists of the '70s
and '80s trained at the University of Chicago] were key in Latin America while Ordoliberalism [a German
approach to liberalism] has been a major influence in the European Union's management of the
post-2008 crises. "Progressive neoliberals" and neoliberalized institutions hauled the project
in their own direction. But Hayek's influence is critical to governing rationality of
neoliberalism in the North and he also happens to be a rich and complex thinker with a fairly
comprehensive worldview, one comprising law, family, morality, state, economy, liberty,
equality, democracy and more.
The limitations? Hayek really believed that markets and traditional morality were both
spontaneous orders of action and cooperation, while political life would always overreach and
thus required tight constraints to prevent its interventions in morality or markets. It also
needed to be insulated from instrumentalism by concentrated economic interests, from aspiring
plutocrats to the masses. The solution, for him, was de-democratizing the state itself. He was,
more generally, opposed to robust democracy and indeed to a democratic state. A thriving order
in his understanding would feature substantial hierarchy and inequality, and it could tolerate
authoritarian uses of political power if they respected liberalism, free markets and
individual freedom.
We face an ugly, bowdlerized version of this today on the right. It is not exactly what
Hayek had in mind, and he would have loathed the plutocrats, demagogues and neo-fascist masses,
but his fingerprints are on it.
LP: You argue that there is now arising something distinct from past forms of fascism,
authoritarianism, plutocracy, and conservatism. We see things like images of Italian right groups giving Fascist
salutes that have been widely published. Is that merely atavism? What is different?
WB: Of course, the hard right traffics in prior fascist and ultra-racist iconography,
including Nazism and the Klan. However, the distinctiveness of the present is better read from
the quotidian right than the alt-right.
We need to understand why reaction to the neoliberal economic sinking of the middle and
working class has taken such a profoundly anti-democratic form. Why so much rage against
democracy and in favor of authoritarian statism while continuing to demand individual freedom?
What is the unique blend of ethno-nationalism and libertarianism afoot today? Why the
resentment of social welfare policy but not the plutocrats? Why the uproar over [American
football player and political activist] Colin Kaepernick but not the Panama Papers [a massive
document leak pointing to fraud and tax evasion among the wealthy]? Why don't bankrupt workers
want national healthcare or controls on the pharmaceutical industry? Why are those sickened
from industrial effluent in their water and soil supporting a regime that wants to roll back
environmental and health regulations?
Answers to these questions are mostly found within the frame of neoliberal reason, though
they also pertain to racialized rancor (fanned by opportunistic demagogues and our mess of an
unaccountable media), the dethronement of white masculinity from absolute rather than relative
entitlement, and an intensification of nihilism itself amplified by neoliberal
economization.
These contributing factors do not run along separate tracks. Rather, neoliberalism's aim to
displace democracy with markets, morals and liberal authoritarian statism legitimates a white
masculinist backlash against equality and inclusion mandates. Privatization of the nation
legitimates "nativist" exclusions. Individual freedom in a world of winners and losers assaults
the place of equality, access and inclusion in understandings of justice.
LP: Despite your view of democratized capitalism as an "oxymoron," you also observe that
capitalism can be modulated in order to promote equality among citizens. How is this feasible
given the influence of money in politics? What can we do to mitigate the corruption of
wealth?
WB: Citizens United certainly set
back the project of achieving the political equality required by and for democracy. I
wrote about this in a previous book, Undoing the Demos , and Timothy
Kuhner offers a superb account of the significance of wealth in politics in Capitalism V. Democracy: Money in Politics
and the Free Market Constitution. Both of us argue that the Citizens
United decision, and the several important campaign finance and campaign speech decisions
that preceded it, are themselves the result of a neoliberalized jurisprudence. That is,
corporate dominance of elections becomes possible when political life as a whole is cast as a
marketplace rather than a distinctive sphere in which humans attempt to set the values and
possibilities of common life. Identifying elections as political marketplaces is at the heart
of Citizens United.
So does a future for democracy in the United States depend on overturning that decision?
Hardly. Democracy is a practice, an ideal, an imaginary, a struggle, not an achieved state.
It is always incomplete, or better, always aspirational. There is plenty of that aspiration
afoot these days -- in social movements and in statehouses big and small. This doesn't make the
future of democracy rosy. It is challenged from a dozen directions – divestment
from public higher education, the trashing of truth and facticity, the unaccountability of
media platforms, both corporate and social, external influence and trolling, active voter
suppression and gerrymandering, and the neoliberal assault on the very value of democracy we've
been discussing. So the winds are hardly at democracy's back.
I think Milton Friedman was vastly more important than Hayek is shaping the worldview of
American conservatives on economic policy. Until Hayek won the Nobel he was virtually
forgotten in the US. Don't know about the UK, but his leaving the London School of Economics
undoubtedly reduced his influence there. Hayek was very isolated at the University of Chicago
even from the libertarians at the Department of Economics, largely due to methodological
issues. The Chicago economists thought was really more of as philosopher, not a real
economist like them.
Friedman was working for Hayek, in the sense that Hayek instigated the program that
Friedman fronted.
I was amused by a BBC radio piece a couple of years ago in which some City economist was
trying to convince us that Hayek was a forgotten genius who we ought to dig up and worship,
as if he doesn't already rule the World from his seat at God's right hand.
Citizens United: The conservative originalists keep whining about activist judges making
up rights, like the "right to privacy" in Roe v. Wade. Yet they were able to come up with
Citizens United that gave a whole new class of rights to corporations to effectively give
them the rights of individuals (the People that show up regularly in the Constitution,
including the opening phrase). If you search the Constitution, "company", "corporation" etc.
don't even show up as included in the Constitution. "Commerce" shows up a couple of times,
specifically as something regulated by Congress. Citizens United effectively flips the script
of the Constitution in giving the companies doing Commerce the ability to regulate Congress.
I think Citizen's United is the least conservative ruling that the conservative court could
have come up with, bordering on fascism instead of the principles clearly enunciated
throughout the Constitution. It is likely to be the "Dred Scott" decision of the 21st
century.
2. Neo-liberalism is like Marxism and a bunch of other isms, where the principles look
fine on paper until you apply them to real-world people and societies. This is the difference
between Thaler's "econs" vs "humans". It works in theory, but not in practice because people
are not purely rational and the behavioral aspects of the people and societies throw things
out of kilter very quickly. That is a primary purpose of regulation, to be a rational
fly-wheel keeping things from spinning out of control to the right or left. Marxism quickly
turned into Stalinism in Russia while Friedman quickly turned into massive inequality and
Donald Trump in the US. The word "regulate" shows up more frequently in the Constitution than
"commerce", or "freedom" (only shows up in First Amendment), or "liberty" (deprivation of
liberty has to follow due process of law which is a form of regulation). So the Constitution
never conceived of a self-regulating society in the way Hayek and Friedman think things
should naturally work – writing court rulings on the neo-liberal approach is a radical
activist departure from the Constitution.
The foundation was laid for Citizens United long before, I think, when the Supreme
Court decided that corporations were essentially people, and that money was essentially
speech. It would be nice if some justice started hacking away at those erroneous decisions
(along with what they did with the 2nd Amendment in D.C. v Heller .)
I honestly think the corporations are people was good and the money is speech is terrible.
If most of the big corporations were actually treated like people those people would be in
jail. They are treated better than people are now. Poor people, anyway. When your corporation
is too big not to commit crimes, it's too big and should go in time out at least.
My understanding is that corporate personhood arose as a convenience to allow a
corporation to be named as a single entity in legal actions, rather than having to name every
last stockholder, officer, employee etc. Unfortunately the concept was gradually expanded far
past its usefulness for the rest of us.
"If most of the big corporations were actually treated like people those people would be
in jail."
Thats part of the problem: Corporations CANNOT be put in jail because they are
organizations, not people, but they are given the same 'rights' as people. That is
fundamentally part of the problem.
True, but corporations are directed by people who *can* be jailed. Often they are
compensated as if they were taking full liability when in fact they face none. I think its
long past time to revisit the concept of limited liability.
"Limited Liability" is basic to the concept of the corporation. How about some "limited
liability" for individuals? The whole point of neo-liberalism is "lawlessness" or the "Law of
the Jungle" in unfettered markets. The idea is to rationalize raw power, both over society
and the family, the last stand of male dominance, the patriarchy. The women who succeed in
this eco-system, eschew the nurturing feminine and espouse the predatory masculine. "We came,
we saw, he died." Psychopaths all!
The executives need to go to jail. Until then, corporate fines are just a cost of doing
business and white collar lawbreaking will continue. Blowing up the world's financial system
has less legal consequence than doing 80 in a 65 mph zone. Even if they just did civil asset
forfeiture on executives based on them having likely committed a crime while in their house
and using their money would go along ways to cleaning things up.
The whittling away of white collar crime by need to demonstrate intent beyond reasonable
doubt means the executives can just plead incompetence or inattention (while collecting their
$20 million after acquittal). Meanwhile, a poor person with a baggie of marijuana in the
trunk of their car goes to jail for "possession" where intent does not need to be shown, mere
presence of the substance. If they used the same standard of the mere presence of a fraud to
be sufficient to jail white collar criminals, there wouldn't be room in the prisons for poor
people picked up for little baggies of weed.
Actually, if you research the history, the court DID NOT decide that corporations are
people. The decision was made by the secretary to the court, who included the ruling in the
headnote to Santa Clara County v. Southern Pacific Railroad, 1886. The concept was not
considered in the case itself nor in the ruling the judges made. However, it was so
convenient for making money that judges and even at least one justice on the supreme court
publicized the ruling as if it were an actual legal precedent and have followed it ever
since. I am not a lawyer, but I think that ruling could be changed by a statute, whereas
Citizens United is going to require an amendment to the constitution. On the other hand, who
knows? Maybe the five old, rich, Republican, Catholic Men will rule that it is embedded in
the constitution after all. I think it would be worth a try.
"Neo-liberalism is like Marxism and a bunch of other isms, where the principles look fine
on paper until you apply them to real-world people and societies."
Marx analysed 19th Century capitalism; he wrote very little on what type of system should
succeed capitalism. This is in distinct contrast to neo-liberalism which had a well plotted
path to follow (Mirowski covers this very well). Marxism did not turn into Stalinism; Tsarism
turned into Leninism which turned into Stalinism. Marx had an awful lot less to do with it
than Tsar Nicholas II.
+1000. I think it was Tsar Nicholas II who said, L'etat, c'est moi"./s; Lenin just
appropriated this concept to implement his idea of "the dictatorship of the proletariat."
"Neo-liberalism is like Marxism and a bunch of other isms, where the principles look fine
on paper until you apply them to real-world people and societies."
I'm sorry, but this is fundamentally intellectually lazy. Marxism isn't so much a way to
structure the world, like Neoliberalism is, but a method of understanding Capitalism and
class relations to capitalism.
Edit: I wrote this before I saw New Wafer Army's post since I hadnt refreshed the page
since I opened it. They said pretty much what I wanted to say, so kudos to them.
These critiques of neoliberalism are always welcome, but they inevitably leave me with
irritated and dissatisfied with their failure or unwillingness to mention the political
philosophy of republicanism as an alternative, or even a contrast.
The key is found in Brown's statement " It also needed to be insulated from
instrumentalism by concentrated economic interests, from aspiring plutocrats to the masses.
The solution, for him [von Hayek], was de-democratizing the state itself. He was, more
generally, opposed to robust democracy and indeed to a democratic state."
Contrast this to Federalist Paper No. 10, Madison's famous discourse on factions.
Madison writes that 1) factions always arise from economic interests ["But the most common
and durable source of factions has been the various and unequal distribution of property."],
and 2) therefore the most important function of government is to REGULATE the clash of these
factions ["The regulation of these various and interfering interests forms the principal task
of modern legislation, and involves the spirit of party and faction in the necessary and
ordinary operations of the government."
In a very real sense, neoliberalism is an assault on the founding principles of the
American republic.
Which should not really surprise anyone, since von Hayek was trained as a functionary of
the Austro-Hungarian empire. And who was the first secretary of the Mont Pelerin Society that
von Hayen founded to promote neoliberalist doctrine and propaganda? Non other than Max Thurn,
of the reactionary Bavarian Thurn und Taxis royal family.
Madison's Federalist 10 is much like Aristotle's Politics and the better Roman historians
in correctly tracing back the fundamental tensions in any political community to questions of
property and class.
And, much like Aristotle's "mixed regime," Madison proposes that the best way of
overcoming these tensions is to institutionalize organs of government broadly representative
of the two basic contesting political classes–democratic and oligarchic–and let
them hash things out in a way that both are forced to deal with the other. This is a
simplification but not a terribly inaccurate one.
The problem though so far as I can tell is that it almost always happens that the
arrangement is set up in a way that structurally privileges existing property rights
(oligarchy) over social freedoms (democracy) such that the oligarchic class quickly comes to
dominate even those governmental organs designed to be "democratic". In other words, I have
never seen a theorized republic that upon closer inspection was not an oligarchy in
practice.
1) Support welfare for the banks (e.g. deposit guarantees) and the rich (e.g. non-negative
yields and interest on the inherently risk-free debt of monetary sovereigns).
2) Seek to regulate the thievery inherent in 1).
3) Bemoan the inevitable rat-race to the bottom when 2) inevitably fails because of
unenforceable laws, such as bans on insider trading, red-lining, etc.
Shorter: Progressives ENABLE the injustice they profess, no doubt sincerely at least in
some cases, to oppose.
Rather stupid from an engineering perspective, I'd say. Or more kindly, blind.
I'm fine with the federal government providing basic banking services (which would
inherently protect depositors) but your initial post didn't say anything about that. If we
continue with a private banking system I want deposit guarantees even if they somehow
privilege the banks better than nothing
I have read that originally conservatives (including many bankers) opposed deposit
insurance because it would lead people to be less careful when they evaluated the banking
institution they would entrust with their money. They did not seem to notice that however
much diligence depositors used, they ended up losing their life's savings over and over. Just
as they do not seem to notice that despite having employer-provided insurance tens of
thousands of people every year go bankrupt because of medical bills. Funny how that
works.
Adding that rather than deposit guarantees, the US government could have expanded the
Postal Savings Service to provide the population with what private banks had so miserably
failed to provide – the safe storage of their fiat.
The banking system was failing in 1932, as was the financial system in 2008, not
necessarily because of any lack of solvency of an individual business although some were, but
because of the lack of faith in the whole system; bank panics meant that every depositor was
trying to get their money out at the same time. People lost everything. It is only the faith
in the system that enables the use of bits of paper and plastic to work. So having a
guarantee in big, bold letters of people's savings is a good idea.
Personally, I see little distance between the Neo Liberal treatment of Market and Naked
Greed, coupled with a complete rejection of Rule of Law for the Common Good.
" It means legitimating assertions of personal freedom against equality mandates (and when
corporations are identified as persons, they too are empowered to assert such freedom)."
"We need to understand why reaction to the neoliberal economic sinking of the middle and
working class has taken such a profoundly anti-democratic form." Really? Does anybody here
believe that? This reads like another clumsy attempt to dismiss actual popular anger against
neoliberalism in favour of pearl-clutching progressive angst, by associating this anger with
the latest target for liberal hate, in this case blah blah patriarchy blah blah. The reality
is that liberalism has always been about promoting the freedom of the rich and the strong to
do whatever they feel like, whilst keeping the ordinary people divided and under control.
That's why Liberals have always hated socialists, who think of the good of the community
rather than of the "freedom" of the rich, powerful and well connected.
The "democracy" that is being defended here is traditional elite liberal democracy, full of
abstract "rights" that only the powerful can exert, dominated by elite political parties with
little to choose between them, and indifferent or hostile to actual freedoms that ordinary
people want in their daily lives. Neoliberalism is simply a label for its economic views
(that haven't changed much over the centuries) whereas social justice is the label for its
social wing (ditto).
I think of this every time I wall home through the local high street, where within thirty
metres I pass two elderly eastern European men aggressively begging. (It varies in France,
but this is slightly closer than the average for a city). I reflect that twenty years of
neoliberal policies in France have given these people freedom of movement, and the freedom to
sit there in the rain with no home, no job and no prospects. Oh, and now of course they are
free to marry each other.
I agree with your analysis and assessment of Wendy Brown, as she is portrayed in her
statements in this post. However I quibble your assertion: "Neoliberalism is simply a label
for its economic views (that haven't changed much over the centuries) whereas social justice
is the label for its social wing (ditto)." The word "Neoliberalism" is indeed commonly used
as a label as you assert but Neoliberalism as a philosophy is obscured in that common
usage.
At its heart I believe Neoliberalism might best be characterized as an epistemology based
on the Market operating as the all knowing arbiter of Truth. Hayek exercises notions of
'freedom' in his writing but I believe freedom is a secondary concern once it is defined in
terms of its relation to the decisions of the Market. This notion of the Market as
epistemology is completely absent from Wendy Brown's discussion of her work in this post.
Her assertion that "neoliberalism's aim [is] to displace democracy with markets, morals
and liberal authoritarian statism legitimates a white masculinist backlash against equality
and inclusion mandates" collapses once the Market is introduced as epistemology.
Neoliberalism does not care one way or another about any of Wendy Brown's concerns. Once the
Market decides -- Truth is known. As a political theorist I am surprised there is no analysis
of Neoliberalism as a tool the Elite have used to work their will on society. I am surprised
there is no analysis of how the Elites have allowed themselves to be controlled within and
even displaced by the Corporate Entities they created and empowered using their tool. I am
surprised there is no analysis of the way the Corporate Entities and their Elite have worked
to use Neoliberalism to subordinate nation states under a hierarchy driven by the decisions
of the World Market.
[I admit I lack the stomach to read Hayek -- so I am basing my opinions on what I
understand of Phillip Mirowski's analysis of Neoliberalism.]
I don't disagree with you: I suppose that having been involved in practical politics
rather than being a political theorist (which I have no pretensions to being) I am more
interested of the reality of some of these ideas than their theoretical underpinnings. I have
managed to slog my way through Slobodian's book, and I think your presentation of Hayek's
writing is quite fair: I simply wonder how far it is actually at the origin of the
destruction we see around us. I would suggest in fact that, once you have a political
philosophy based on the value-maximising individual, rather than traditional considerations
of the good of society as a whole, you eventually wind up where we are now, once the
constraints of religious belief, fear of popular uprisings , fear of Communism etc. have been
progressively removed. It's for that reason that I argue that neoliberalism isn't really new:
it represents the essential form of liberalism unconstrained by outside forces – almost
a teleological phenomenon which, as its first critics feared, has wound up destroying
community, family, industries, social bonds and even – as you suggest – entire
nation states.
Your response to my comment, in particular your assertion "neoliberalism isn't really new"
coupled with your assertion apparently equating Neoliberalism with just another general
purpose label for a "political philosophy based on the value-maximizing individual, rather
than traditional ", is troubling. When I put your assertions with Jerry B's assertion at 6:58
pm:
" many people over focus on a word or the use of a word and ascribe way to literal view of a
word. I tend to view words more symbolically and contextually."
I am left wondering what is left to debate or discuss. If Neoliberalism has no particular
meaning then perhaps we should discuss the properties of political philosophies based on the
value-maximizing-individual, and even that construct only has meaning symbolically and
contextually, which is somehow different than the usual notion of meaning as a denotation
coupled with a connotation which is shared by those using a term in their discussion -- and
there I become lost from the discussion. I suppose I am too pedantic to deviate from the
common usages of words, especially technical words like Neoliberalism.
Considering how elites throughout history have used religion as a bulwark to guard their
privileges, it should be of no surprise that they are building a new one, only this time they
are building one that appeals to the religious and secular alike. Neoliberalism will be very
difficult to dismantle.
But what ironies we create. Citizens United effectively gave political control to the big
corporations. In a time when society has already evolved lots of legislation to limit the
power and control of any group and especially in commercial/monopoly cases. So that what CU
created was a new kind of "means of production" because what gets "produced" these days is at
least 75% imported. The means of production is coming to indicate the means of political
control. And that is fitting because ordinary people have become the commodity. Like
livestock. So in that sense Marx's view of power relationships is accurate although
civilization has morphed. Politics is, more and more, the means of production. The means of
finance. Just another reason why we would achieve nothing in this world trying to take over
the factories. What society must have now is fiscal control. It will be the new means of
production. I'm a dummy. I knew fiscal control was the most important thing, but I didn't
quite see the twists and turns that keep the fundamental idea right where it started.
Exactly. The writer seems determined to tie in neoliberalism with a broader conservative
opposition to modern social justice movements, when in reality neoliberalism (the 'neo' part
anyway) was more than happy to co-opt feminism, anti-racism, etc., into its narrative. The
more the merrier, as 'rights' became associated entirely with social issues, and not economic
rights.
The co-optation neoliberalism has exacted on rights movements has dovetailed nicely with
postmodernism's social-constructivism, an anti-materialist stance that posits discourse as
shaping the world and one that therefore privileges subjectivity over material reality.
What this means in practice is that "identity" is now a marketplace too, in which
individuals are naming their identities as a form of personal corporate branding. That's why
we have people labeling themselves like this: demisexual queer femme, on the spectrum, saying
hell no to my tradcath roots, into light BDSM, pronouns they/them.
And to prove this identity, the person must purchase various consumer products to garb and
decorate themselves accordingly.
So the idea of civil rights has now become utterly consumerist and about awarding those
rights based on subjective feelings rather than anything to do with actual material
exploitation.
The clue is in the way the words "oppression" and "privilege" are used. Under those words,
exploitation, discrimination, disadvantage, and simple dislike are conflated, though they're
very different and involve very different remedies.
The law in its majestic equality forbids the rich as well as the poor from sleeping under
bridges and stealing bread = classical Liberalism.
The bizarre thing is to meet younger neoliberal middle class people whom neoliberalism has
priced out of major cities, who have hardly any real savings, and who still are on board with
the project. The dream dies hard.
David – I enjoy reading your comments on NC as they are well reasoned and develop an
argument or counter argument. The above comment reads more like a rant. I do not disagree
with most of your comment. From my experience with Wendy Brown's writing your statement below
is not off base.:
This reads like another clumsy attempt to dismiss actual popular anger against
neoliberalism in favour of pearl-clutching progressive angst, by associating this anger with
the latest target for liberal hate, in this case blah blah patriarchy blah blah
However, in reading Wendy Brown's comments I did not have the same emotional reaction that
comes across in your comment. I have read the post twice to make sure I understand the points
Wendy Brown is trying to make and IMO she is "not wrong" either. . I would advise you to not
"throw out the baby with the bathwater".
As KLG mentions below, WB is a very successful academic at Berkeley who worked with
Sheldon Wolin as a graduate student IIRC (Sheldon Wolin wrote a terrific book entitled
Democracy Incorporated), so she is not just some random journalist.
Much of WB's writing has gender themes in it and there are times I think she goes over the
top, BUT, IMO there is also some truth to what she is saying. Much of the political power and
economic power in the US and the world is held by men so that may be where WB's reference to
patriarchy comes in.
How could there be patriarchy with men begging in the streets is a valid point. And that
is where I divert with WB, in that the term patriarchy paints with too broad a brush. But
speaking specifically to neo-liberalism and not liberalism as you refer to it, that is where
WB's reference to patriarchy may have some merit. Yes, there are many exceptions to the
neoliberalism and patriarchy connection such as Hillary Clinton, Margaret Thatcher, etc., so
again maybe painting with too broad a brush, but it would be wise not to give some value.
The sociologist Raewyn Connell has written about the connection between neoliberalism and
version of a certain type of masculinity embedded with neoliberalism. Like Wendy Brown,
Connell seems to gloss over the examples of Hillary Clinton, Margaret Thatcher, and the class
based elite bourgeois feminism as counterpoints to neoliberal patriarchy. There are
exceptions to every rule.
Women have made enormous strides in politics and the boardroom. But in the halls of political
and economic power the majority of the power is still held by men, and until women become
close to 50% or more of the seats of power, to ignore the influence of patriarchy/oligarch
version of masculinity(or whatever term a person is comfortable with) on neoliberalism would
be foolish.
Neoliberalism is simply a label for its economic views (that haven't changed much over
the centuries) whereas social justice is the label for its social wing (ditto).
I disagree. IMO, neoliberalism is a different animal than the "traditional elite liberal
democracy", and neoliberalism is much darker and as WB mentions "Neoliberalism thus aims to
de-regulate the social sphere in a way that parallels the de-regulation of markets".
If you have not I would highly recommend reading Sheldon Wolin's Democracy Incorporated:
Managed Democracy and the Specter of Inverted Totalitarianism It is an excellent book.
I haven't read that book by Wolin, though his Politics and Vision is in the bookcase next
to me. I'll try to get hold of it. I didn't know she was his student either.
I think the issues she raises about gender are a different question from neoliberalism
itself, and that it's not helpful to believe that you can fight neoliberalism by
"legitimating assertions of personal freedom against equality mandates" whatever that means.
Likewise, it's misleading to suggest that "Privatization of the nation legitimates "nativist"
exclusions", since the actual result is the opposite, as you will realise when you see that
London buses have the same logo as the ones in Paris, and electricity in the UK is often
supplied by a French company, EDF. Indeed, to the extent that there is a connection with
"nativism" it is that privatisation has enabled an international network of distant and
unaccountable private companies to take away management of national resources and assets from
the people. Likewise, neoliberalism is entirely happy to trample over traditional gender
roles in the name of efficiency and increasing the number of workers chasing the same
job.
In other words, I was irritated (and sorry if I ranted a bit, I try not to) with what I saw
as someone who already knows what the answer is, independent of what the question may be. I
suspect her analysis of, say, Brexit, would be very similar. I think that kind of person is
potentially dangerous.
==I think the issues she raises about gender are a different question from neoliberalism
itself==
Again as I said in my comment I would agree in a theoretical sense that gender and
neoliberalism are different issues but again I believe there is a thread of gender, i.e.
oligarchic patriarchy, of the type of neoliberalism that WB talks about.
===not helpful to believe that you can fight neoliberalism by "legitimating assertions of
personal freedom against equality mandates" whatever that means===
What I think that means is the more libertarian version of neoliberalism. That maybe where
our differences lie, in that my sense is WB is talking about a specific form of neoliberalism
and your view is broader.
===it's misleading to suggest that "Privatization of the nation legitimates "nativist"
exclusions"===
On this I see your disagreement with WB and understand your reference to "that
privatisation has enabled an international network of distant and unaccountable private
companies to take away management of national resources and assets from the people".
Where I think WB is coming from is the more nationalistic, Anglosphere that the Trump
administration is pushing with his border wall, etc. In this WB does expose her far left
priors but again there is some value in her points. From her far left view my sense it Wendy
Brown is reacting to the sense that Trump wants to turn the US into the US of the 1950's and
60's and on many fronts that ship has sailed.
=== Indeed, to the extent that there is a connection with "nativism" it is that
privatisation has enabled an international network of distant and unaccountable private
companies to take away management of national resources and assets from the people. Likewise,
neoliberalism is entirely happy to trample over traditional gender roles in the name of
efficiency and increasing the number of workers chasing the same job. ===
Excellent point and having read some of Wendy Brown's books and paper is a point she would
agree with while still seeing some patriarchial themes running through neoliberalism. To your
point above I would recommend reading some of Cynthia Enloe's work specifically Bananas,
Beaches and Bases.
====I think that kind of person is potentially dangerous====
Wow. Dangerous??? Clearly the post has hit a nerve. Many people in our current society are
dangerous but IMO Wendy Brown is not one of them. A bit hyperbolic in her focus on gender?
Maybe but not wrong. A bit too far left (of the bleeding heart kind)? Maybe. But to call
someone who worked for Sheldon Wolin dangerous. C'mon man.
I have gotten into disputes on NC as IMO many people over focus on a word or the use of a
word and ascribe way to literal view of a word. I tend to view words more symbolically and
contextually. I do not overreact to the use a word and instead try to step back and glean a
message or the word in context of what is the person trying to say? So for instance when WB
uses the phrase "Privatization of the nation" I am not going to react because my own
interpretation is WB is reacting to Trump's nationalism and not to the type of privatization
that your example of London shows.
I am disappointed that most of the comments to this post seem to take a critical view of
Wendy Brown's comments. Is she a bit too far left and gender focused (identity political) for
my tastes? Yes and that somewhat hurts her overall message and the arguments she is trying to
discuss which are not unlike her mentor Sheldon Wolin.
Thanks for the reply David. My sense is we have what I call a "positional" debate (i.e.
Tastes Great! Less Filling!). And positional debates tend to go nowhere.
When WB speaks of gender, note that she then mentions sex, followed by race. By "gender"
she is NOT talking about the rights and power of female people under neoliberalism.
She is speaking of the rights of people to claim, that they are the opposite sex and
therefore entitled to the rights, set-asides and affirmative discrimination permitted that
sex -- for instance, to compete athletically on that sex's sports teams, to be imprisoned if
convicted in that sex's prisons, to be considered that sex in instances where sex matters in
employment such as a job as a rape counselor or a health care position performing intimate
exams where one is entitled to request a same-sex provider, and to apply for scholarships,
awards, business loans etc. set aside for that sex.
WB, in addition to being a professor at Berkeley, is also the partner of Judith Butler,
whose book "Gender Trouble" essentially launched the postmodern idea that subjective sense of
one's sex and how one enacts that is more meaningful than the lived reality people experience
in biologically sexed bodies.
By this reasoning, a male weightlifter can become a woman, can declare that he's in fact
always been a woman -- and so we arrive at the farce of a male weightlifter (who, granted,
must under IOC policy reduce his testosterone for one year to a low-normal male range that is
5 standard deviations away from the female mean) winning a gold medal in women's
weightlifting in the Pan-Pacific games and likely to win gold again in the 2020 Olympics.
If that's not privileging individual freedom over collective rights, I don't know what
is.
>That's how it is possible to be simultaneously libertarian, ethnonationalist and
patriarchal today: The right's contemporary attack on "social justice warriors" is straight
out of Hayek.
Anyone who could write such a statement understands neither libertarianism nor
ethnonationalism. The last half-decade has seen a constant intellectual attack by
ethnonationalists against libertarianism. An hour's examination of the now-defunct Alt
Right's would confirm this.
Similarly, the contemporary attack on SJW's comes not out of Hayek, but from Gamergate. If
you do not know what Gamergate is, you do not understand where the current rightwing and
not-so-rightwing thrust of contemporary white identity politics is coming from. My guess is
Brown has never heard of it.
Far from trying to uphold patriarchy, Contemporary neoliberalism seeks a total atomization
of society into nothing but individual consumers of product. Thus what passes for
liberalization of a society today consists in little more than staging sham elections,
opening McDonalds, and holding a gay pride parade.
This is why ethnonationalism and even simple nationalism poses a mortal threat to
neoliberalism, in a way that so-called progressives never will: both are a threat to
globalization, while the rainbow left has shown itself to be little more than the useful
idiots of capital.
Brown strikes me as someone who has a worldview and will distort the world to fit that
view, no matter how this jibes with facts or logic. The point is simply to array her bugbears
into a coalition, regardless of how ridiculous it seems to anyone who knows anything about
it.
Actually, maybe not "Bingo," if by that you mean Wendy Brown is a typical representative
of "pearl clutching progressive angst." Yes, WB is a very successful academic at Berkeley who
worked with Sheldon Wolin as a graduate student IIRC (who was atypical in just about every
important way), but this book along with its predecessor Undoing the Demos are much
stronger than the normative "why are the natives so restless?" bullshit coming from my
erstwhile tribe of "liberals," most of whom are incapacitated by a not unrelated case of
Trump Derangement Syndrome.
Hayek was eloquent. Too bad he didn't establish some end goals. Think of all the misery
that would have been avoided. I mean, how can you rationalize some economic ideology to
"deregulate the social sphere" – that's just the snake eating its tail. That's what
people do who don't have boundaries. Right now it looks like there's a strange bedfellowship,
a threesome of neoliberal nazis, globalists, and old communists. Everybody and their dog
wants the world to work – for everyone. But nobody knows how to do it. And we are
experiencing multiple degrees of freedom to express our own personal version of Stockholm
syndrome. Because identity politics. What a joke. Maybe we need to come together over
something rational. Something fairly real. Instead of overturning Citizens United (which is
absurd already), we should do Creatures United – rights for actual living things on
this planet. And then we'd have a cause for the duration.
Well stated. The -isms seem like distractions, almost red herrings leading us down the
primrose path to a ceaseless is/ought problem. Rather than discuss the way the world is, we
argue how it ought to be.
Not to say theory, study, and introspection aren't important. More that we appear
paralyzed into inaction since everyone doesn't agree on the One True Way yet.
Let us not get to simplistic here. It helps to understand the origins of political,
economic, and even social ideals. The origin of modern capitalism, for there were
different and more limited earlier forms, was in the Dutch Republic and was part of the
efforts of removing and replacing feudalism; liberalism arose from the Enlightenment, which
itself was partly the creation of the Wars of Religion, which devastated Europe. The Thirty
Years War, which killed ½ of the male population of the Germanies, and is considered
more devastating to the Germans than both world wars combined had much of its energy from
religious disagreements.
The Age of Enlightenment, along with much of political thought in the Eighteenth Century,
was a attempt to allow differences in belief, and the often violent passions that they can
cause, to be fought by words instead of murder. The American Constitution, the Bill of
Rights, the whole political worldview, that most Americans unconsciously have, comes from
from those those times.
Democracy, Liberalism, even Adam Smith's work in the Wealth of Nations were
attempts to escape the dictatorship of kings, feudalism, serfdom, violence. Unfortunately,
they have all been usurped. Adam Smith's life's work has been perverted, liberalism has been
used to weaken the social bonds by making work and money central to society. Their evil child
Neoliberalism, a creation of people like Hayek, was supposed to reduce wars (most of the
founders were survivors of the world wars) and was supposed to be be partly
antidemocratic.
Modern Neoliberalism mutates and combines the partly inadvertent atomizing effects of the
ideas of the Enlightenment, Liberalism, Dutch and British Capitalism, the Free Markets of
Adam Smith, adds earlier mid twentieth century Neoliberalism as a fuel additive, and creates
this twisted flaming Napalm of social atomizing; it also clears out any challenges to money
is the worth of all things. Forget philosophy, religion, family, government, society. Money
determines worth. Even speech is only worth the money spent on it and not any inherent worth.
Or the vote.
"liberalism has been used to weaken the social bonds by making work and money central to
society"
I think you may have swapped the cart and the horse.
Money evolved as a way of aiding and organizing useful interactions within groups larger
than isolated villages of a hundred people.
It also enabled an overall increase in wealth through specialization.
Were it not for money, there would be a difficult mismatch between goods of vastly
differing value. A farmer growing wheat and carrots has an almost completely divisible supply
of goods with which to trade. Someone building a farm wagon a month, or making an iron plough
every two weeks has a problem exchanging that for items orders of magnitude less
valuable.
Specialization is a vital step in improving resources and capabilities within societies.
I've hung out with enough friends who are blacksmiths to know that every farmer hammering out
their own plough is a non-starter, for many reasons.
And I've followed enough history to know that iron ploughs mean a lot more food, which
allows someone to specialize in making ploughs rather than growing food for personal
consumption.
The obvious need is for a way of dividing the value of the plough into many smaller
amounts that can be used to obtain grain, cloth, pottery, and so on.
While the exact form of money is not rigidly fixed, at lower technological levels one
really needs something that is portable, doesn't spontaneously self destruct, and has a
clearly definable value . and exists in different concentrations of worth, to allow
flexibility in transport and use.
Various societies have come up with various tokens of value, from agricultural products to
bank drafts, each with different advantages and disadvantages, but for most of history,
precious metals, base metals, and coinage have been the most practical representation of
exchangeable value.
Money is almost certainly an inevitable and necessary consequence of the invention of
agriculture, and the corresponding increase in population density.
Agreed, but as I've suggested elsewhere liberalism always had the capacity within it to
destroy social bonds, societies and even nations, it's just that, at the time, this was
hidden behind the belief that a just God would not allow it to happen. I see liberalism less
as mutating or being usurped than finally being freed of controls. Paradoxically, of course,
this "freedom" requires servitude for others, so that no outside forces (trades unions for
example) can pollute the purity of the market. It's the same thing with social justice:
freedom for identity group comes through legal controls over the behaviour of others, which
is why the contemporary definition of a civil rights activist is someone who wants to
introduce lots of new laws to prevent people from doing things.
frankly, I don't believe the "monsters" neoliberalism has helped create are an unwanted
side effect of their approach, on the contrary, neoliberalism needs those "monsters", like
the authoritarian state, to impose itself on society (ask the mutilated gilets jaunes).
Repression, inequality, poverty, abuse, dispossession, disfranchisement, enviromental
degradation are certainly "monstrous" to those who have to endure them, but not to those who
profit the most from the system and sit on the most powerful positions. Of course, the degree
of exposure to those monstrosities is dependent on the relative position in the pyramid
shaped neoliberal society, the bottom has to endure the most. On the other side, the middle
classes tend to support the neoliberal model as long as it ensures them a power position
relative to the under classes, and the moment those middle classes feel ttheir position
relative to the under classes threatened, the switch to open fascism is not far, we can see
this in Bolivia.
"neoliberalism needs those "monsters", like the authoritarian state, to impose itself on
society"
If I understood Quinn Slobodian's "Globalists" correctly it was precisely this -- that the
neoliberal project while professing that markets were somehow "natural" spent an inordinate
amount of time working to ensure that legal structures be created to insulate them from the
dirty demos.
Their actions in this respect don't square with a serious belief that markets are natural
at all -- if they were, they wouldn't need so damned much hothousing, right?
I think the argument was that markets were "natural", but vulnerable to interference, and
so had to be protected by these legal structures. There's a metaphor there, but it's too late
here for me to find it.
===spent an inordinate amount of time working to ensure that legal structures be created
to insulate them from the dirty demos===
I enjoyed Slobodian's book as well. Interestingly, there is a new book out called The Code
of Capital: How the Law Creates Wealth and Inequality by Katharina Pistor that discusses
those "legal structures".
If you check out Katharina Pistor on Twitter, you can also find good commentaries and even
videos of talks discussing the book and the matter – it is very edifying to open your
eyes to the fundamental role of law in creating such natural phenomena as markets and, among
other things, billionaires.
Thanks deplorado. I do not frequent Pistor's twitter page as much as I would like.
In reading Pistor's book and some of the interviews with Pistor and some of her papers
discussing the themes in the book, I had the same reaction as when I read some of Susan
Strange's books such as The Retreat of the State: complete removal of any strand of
naïveté I may have had as to how the world works. And how hard it will be to undo
the destruction.
As you mention the "dirty demos" above, one of Wendy Brown's recent books was Undoing the
Demos: Neoliberalism's Stealth Revolution.
Never having read any of Susan Strange's writings, I decided to find a book review of The
Retreat of the State. I found this one and found it very interesting, enough so that I'll go
to abebooks.com and get a copy to read.
Hmm. Definitely Monsters from the Id at work here. I am going with the theory that the
wealthier class pushed this whole project all along. In the US, Roosevelt had cracked down
and imposed regulations that stopped, for example, the stock market from being turned into a
casino using ordinary people's saving. He also pushed taxes on them that exceeded 90% which
tended to help keep them defanged.
So lo and behold, after casting about, a bunch of isolated rat-bag economic radicals was
found that support getting rid of regulations, reducing taxes on the wealthy and anything
else that they wanted to do. So money was pumped into this project, think tanks were taken
over or built up, universities were taken over to teach this new theories, lawyers and future
judges were 'educated' to support their fight and that is what we have today.
If WW2 had not discredited fascism, the wealthy would have use this instead as both Mussolini
and Hitler were very friendly to the wealthy industrialists. But they were so instead they
turned to neoliberalism instead. Yes, definitely Monsters from the Id.
William White (BIS, OECD) talks about how economics really changed over one hundred years
ago as classical economics was replaced by neoclassical economics. https://www.youtube.com/watch?v=g6iXBQ33pBo&t=2485s
He thinks we have been on the wrong path for one hundred years.
This is why we think small state, unregulated capitalism is something it never was when it
existed before.
We don't understand the monetary system or how banks work because:
Our knowledge of privately created money has been going backwards since 1856.
Credit creation theory -> fractional reserve theory -> financial intermediation
theory
"A lost century in economics: Three theories of banking and the conclusive evidence" Richard
A. Werner http://www.sciencedirect.com/science/article/pii/S1057521915001477
This is why we come up with crazy ideas like "financial liberalisation".
If corporations are to be people, then they, like the extremely wealthy, need to be reined
in politically. One step we could take is to only allow money donations to political
campaigns to take place when the person is subject or going to be subject to the politicians
decisions. I live in Illinois, I should be able to donate money to the campaigns of those
running for the U.S> Senate from Illinois, but Utah? If I donate money to a Utah candidate
for the Senate, I am practicing influence peddling because that Senator does not represent
me.
If corporations are to be people, they need a primary residence. The location of their
corporate headquarters should suffice to "place" them, and donations to candidates outside of
their set of districts would be forbidden.
Of course, we do have free speech, so people are completely free to speak over the
Internet, TV, hire halls in the district involved and go speak in person. They just couldn't
pay to have someone else do that for them.
To allow unfettered political donations violates the one ma, one vote principle and also
encourages influence peddling. In fact, it seems as if our Congress and Executive operates
only through influence peddling.
No! But there will be a new "civil war" in the US around the mid of the next decade. Split
occuring not south to north, but west to east; chaos further increased by immigrants from the
middle & south Americas with their own agenda.
Forces (land & air), militia & DHS people of the eastern party may seek secure
backing near frontier to Canada (area of Great Lakes therefore save). Some of the 'big
capitalists' who feel more international than patriot will flee to outer South America
(Argentinia, Chile).
Eventually a dead president (for that and for the civil war please look into cycles of
US-history). Peace will come with the first female president. Keep watch on Tulsi Gabbard
(but may be also another lady - as I am in Europe I am not familiar with all probable coming
female candidates).
Why no permanent split of the States? There are internal benefits (common traffic, markets
etc.) but more it is the outside pressure: to be able to compete with China it is a necessity
for the States to remain united. Also the coming chaos in Europe and Russia demands
unification of the US.
Now a very strange remark: some elites in the US have already accepted, even promote the
tendency toward "civil war" to enable a 'reset' of the political, economical and social
structure of the country. Furthermore, a seemingly weak US with a split in the military may
lead Russia in temptation to make some mistake (towards Ukraine and Europe). And now a very,
very strange remark: while some forces in the homeland are caught in civil disorder some
other forces in the overseas may be involved in a foreign war. Extremely pointed out: the
coming civil war in a very specific manner is a fake (to deceive and trap Russia - of course
not Putin but his followers).
Today I had a look into George Friedman's book about the next hundred years. For the first
view there is a lot of nonsense (disintegration of China etc.). But I agree that the power of
the US will be restored during the century. And if not the same power as it was in the 1990s,
then in every case the internal stability of the USA is completely guaranteed.
With greetings from Germany and with thanks to Bernhard for his valuable work, Gerhard
I see a civil war in the USA as highly unlikely. The upper class has too much common
interest and purpose. The lower classes are divided and powerless and in the near future only
seem to be becoming more so. When the third-worldization reaches a critical point, a staged
and managed revolution may be in the cards. Before a real revolution has any chance, the
elites will have flooded the USA with immigrants from the south, ensuring further division of
the lower classes and postponing any real challenge.
Overall, the societal foundation of the USA looks to have been crumbling for maybe five
decades already and for the next few decades an acceleration of that process is more likely
than a reversal. Don't be on the lookout for leaders or movements to change any of that. Only
when the american people clean up their act, ie. their addiction to numbing drugs, empty
consumerism and false jingoisms, will anything there ever change for good. Until that
happens, the place will be withering more and more.
Not until the American elites start to fail to safeguard their own priviliges at the cost
of the rest of the population will change happen.
I don't see the Russian aggression that you propose to be realistic or likely to happen.
Russia does not need to reach abroad for energy, resources or food. Their main challenge is
to manage the riches of the huge country with the people they have. Already the resurgence
after the post-1990 crash (and the preceding stagnation) is an accomplishment worthy of
admiration.
The Russian interest clearly is consolidation and defence, which is exactly what their
policies have been showing on the international stage. Suggestions of aggression are pure
projection by Atlanticists theselves. Instead of Washington trying to provoke Russian
mistakes, the real game is about Moscow trying to contain NATO's erratic trashing and
carefully preventing any catastrophic escalation.
To wit, what country did recently "update" its nuclear doctrine, suggesting the
possibility of 'limited' use of nuclear weapons? Was it Russia, or ehhm... perhaps the
USA?
The only uncertain factor between Russia and the USA is Europe. I expect a lot more
American craziness towards Europe, as its effective leverage crumbles. Europe has not yet
devolved as badly as the USA and the American implosion is a major risk factor for the
Europeans.
The issue with the Americans is a hyper-partisan mindset has been instilled, akin to duelling
sports teams, so one cheers for their team facts or context be damned. This used to be a Fox
News-Republican phenomenon, but now has infected Dem supporters as well.
Break up of US would mean break up of Canada too. Look to the moves made by province of
Alberta in response to fed election - a sort of firewall is being proposed where Alberta will
take on fed gov responsibilities pension, health care, etc. Alberta is a Koch Bros oil
republic, and any N American melt-down will result in formation of private fiefdoms - i.e.
Alberta-Montana-Wyoming-South Dakota become Kochland.
You'd probably do well to study the history of China after the downfall of the Manchu Qing
dynasty up to the 1930s at least (when Japan began invading the country and bringing its own
forms of chaos, violence and enslavement) to get an idea of where the US might be heading if
and when the Federal government falls. From the 1910s onwards, China was governed by warlords
looking out for No 1, with their own armies.
Not so very different from the situation prevailing in Afghanistan and Libya. Talk about
the chickens coming home to roost.
The other alternative is if the 50 states decide to be self-governing statelets or form
their own federations among themselves or with neighbouring provinces and states in Canada
and Mexico, or even abroad. Alaska may petition Moscow to be accepted back into the Russian
Federation and Hawaii may seek another large patron to attach itself for security reasons.
Washington and Oregon
states may finally form a federation with British Columbia and call it Cascadia.
Gerhard @10;
I agree the US will split up. As a poli sci initiate, i was forced to consider the role of
institutions acting in support of the polis. I wasn't impressed at the time. my disdain for
the rot of leadership in most if not all institutions in the west, it was mostly for the
greed....but i realize the cumulative effect is the fraying of those 'supports' of the nation
itself. Consider:
The 16 intelligence agencies each have their own agendas, the regulatory agencies are
revolving doors for industry placements, the FBI was crooked since the days of Hoover, the
governments agencies are rife with oligarchy quislings .....and in the end the greed of those
in power will be not be held back by any moral force. The police are militarized, murdering
and robbing their own citizens.
Meanwhile, the MSM are owned by the oligarch, so there is no national forum where the
corruption can be addressed on a national level. This leaves the blog sites such as MOA to
lead the fight against the PTB. The problem is in the nature of the internet, which has no
'locus' as in a national voice. The internet has no center. As example, i am not a US
citizen. When the polis finally hit the point where the Rentier economy has driven them to
extreme reaction, they will not be thinking of reclaiming the vast American experiment,
rather they will seek to at least control their little part of the world. I believe you will
see blocs of similar states rising up to control whet they think is in their own best
interests: The mid-west, the west coast and mountain states, the deep south, the eastern
states will find common issues to crytalize around.
That's my read.
As a Canadian, my thoughts are how Canada will negotiate with these remainder blocs of former
US states.
So long as the United States continues to serve its function as the core of the capitalist
empire it will not be allowed to "break up" . Literally $trillions have been invested
in brainwashing conditioning and indoctrinating the American public into
barking (or salivating) on command like Pavlov's dogs. This programming is, like religion,
transgenerational (don't religious people ever wonder how it was that their parents were
indoctrinated into the "one true religion" and not one of all of the fake ones that
everyone else believes in?). The capitalist programming (TV programming) compounds from
generation to generation, becoming more deeply ingrained over the decades in the culture
regardless of the birth and passing away of individuals in that culture. For capitalism to
throw that massive investment away and start over somewhere else is a ludicrous proposition.
That is not going to happen until capitalism itself is dismantled.
Where else in the world can capitalism find a base of support like the American
poopulation? Where else would the capitalists be cheered on for unleashing the fascists
gangsters or imperial stormtroopers on defenseless countries attempting brave experiments to
uplift their people?
As long as capitalism continues to need a home base to operate their death squads from,
and a population to recruit enthusiastic cannon fodder from, then America will be maintained
@ Lurk | 32
@ Jen | 40
@ Breadonwaters |43
Thanks for Your assessments and arguments!
1. In my comment (|10) I have put the term "civil war" in quotation marks to indicate that
it will not be a war with military units against other units, with states against states (as
in the first civil war). In the beginning it will be a very disturbing civil unrest and
complete chaos. Multiple splits and fragmentations will occure throughout all institutions
and all regional corporations, also within the army itself (as far as based on US soil). Only
towards the end of this period (about 2 - 3 years) the shape will evolve as I have described
(east - west; dominant pressure from Latin America; other foreign influences higly probable
...).
2.A. For the neutral geopolitical observer main problem today are the US. For the
observing US elites it is Russia. It was a severe mistake to start the war against 'islamic
terror' before the US grip on Russia was complete. Now Putin has torn his homeland out of the
transatlantic-angloamerican fist. Would Russia still be under dominance of the US (as started
and intended in the 1990s) then the US could face China. Now the US have the problem of
Russia and China combined - besides Islam ...
2.B. I suggest to look on the alliance of Putin and Xi as a new Molotov-Rippentrop-Pact.
It will hold some more years longer but eternally. What if Russia makes a mistake and looks
towards Europe? True, Russia is a very rich and powerful country, but it depends on Europe:
more than half of its trade exchange is with European countries. What if Europe falls into
civil disorder, too? What if US forces leave Europe? Two years ago such questions were
nonsense, but today they are discussed.
3.A. (@ Jen) I am very familiar with Chinese history. I am working on historical cycles,
patterns in time. There was a Spenglerian cultural cycle from ~ 1780 BCE which span to 220
CE. After that, with China in the state of a "civilzation", we only see cycles of maximum 300
years of stability. Such a new cycle has started in the 1920s with the foundation of the
Chinese Communist Party. This party is the new dynasty and will rule till 2220, formally -
becoming weaker and weaker after 2120. But no power on earth can change this cycle, it's too
late. During the 21st century the cylce will experience his height line.
3.B. If Russia makes a mistake and engages in Ukraine and Europe - lead into such a
temptation by civil disorder and fragmentation in the US - , then the new
Molotw-Ribbentrop-Pact between Russia and China will exspire. Because China meanwhile has
strong interests in Europe, too, and will not accept Russian dominance over Europe. Therefore
the Chinese will be open to talks - about Russia - with the restored USA. The Chinese may
even help one of the then US parties to restore internal peace in North America. These future
talks between China and the USA over Russia and Europe will not be talks of politicians but
talks of "capitalists", Chinese and American ones. Both have hundred years of experience with
such bilateral talks ...
My outline is strange and provocative - I know! Keep on watching the changing walk of
history - and remember me! Also my outline is restricted to the sphere of geopolitics. The
main problem of the world is of course the gap between the powerful rich and the helpless
poor. The rich will always fight each other (to get more), but they are also prepared to go
into talks with each other when the proper moment has come. Only the poor have no idea and no
organization to manage their sad destiny.
"... Finally, the Thought Police were also inspired by the human struggle for self-honesty and the pressure to conform. "The individual has always had to struggle to keep from being overwhelmed by the tribe," Rudyard Kipling once observed. ..."
"... The struggle to remain true to one's self was also felt by Orwell, who wrote about "the smelly little orthodoxies" that contend for the human soul. Orwell prided himself with a "power of facing unpleasant facts" -- something of a rarity in humans -- even though it often hurt him in British society. ..."
"... In a sense, 1984 is largely a book about the human capacity to maintain a grip on the truth in the face of propaganda and power. ..."
"... The new Thought Police may be less sinister than the ThinkPol in 1984 , but the next generation will have to decide if seeking conformity of thought or language through public shaming is healthy or suffocating. FEE's Dan Sanchez recently observed that many people today feel like they're "walking on eggshells" and live in fear of making a verbal mistake that could draw condemnation. ..."
"... When the Berlin Wall came down in November 1989, it was revealed that the Stasi , East Germany's secret police, had a full-time staff of 91,000. That sounds like a lot, and it is, but what's frightening is that the organization had almost double that in informants, including children. And it wasn't just children reporting on parents; sometimes it was the other way around." ..."
"... Movies like the Matrix actually helped people to question everything. What is real and not. Who is the enemy, and can we be sure. And when Conspiracy theories become fact, people learn. The problem is in later generations who get indoctrinated at school and college to not think, not question. Rational examination is forbidden. ..."
There are a lot of unpleasant things in George Orwell's dystopian novel 1984 . Spying screens. Torture and propaganda. Victory
Gin and Victory Coffee always sounded particularly dreadful. And there is Winston Smith's varicose ulcer,
apparently a symbol of his humanity (or something),
which always seems to be "throbbing." Gross.
None of this sounds very enjoyable, but it's not the worst thing in 1984 . To me, the most terrifying part was that you couldn't
keep Big Brother out of your head.
Unlike other 20th-century totalitarians, the authoritarians in 1984 aren't that interested in controlling behavior or speech.
They do, of course, but it's only as a means to an end. Their real goal is to control the gray matter between the ears.
"When finally you surrender to us, it must be of your own free will," O'Brien (the bad guy) tells the protagonist Winston Smith
near the end of the book.
We do not destroy the heretic because he resists us: so long as he resists us we never destroy him. We convert him, we capture
his inner mind, we reshape him.
Big Brother's tool for doing this is the Thought Police, aka the ThinkPol, who are assigned to root out and punish unapproved
thoughts. We see how this works when Winston's neighbor Parsons, an obnoxious Party sycophant, is reported to the Thought Police
by his own child, who heard him commit a thought crime while talking in his sleep.
"It was my little daughter," Parsons tells Winston when asked who it was who denounced him.
"She listened at the keyhole. Heard what I was saying, and nipped off to the patrols the very next day. Pretty smart for a
nipper of seven, eh?"
Who Are These Thought Police?
We don't know a lot about the Thought Police, and some of what we think we know may actually not be true since some of what Winston
learns comes from the Inner Party, and they lie.
What we know is this: The Thought Police are secret police of
Oceania -- the fictional land
of 1984 that probably consists of the UK, the Americas, and parts of Africa -- who use surveillance and informants to monitor the
thoughts of citizens. The Thought Police also use psychological warfare and false-flag operations to entrap free thinkers or nonconformists.
Those who stray from Party orthodoxy are punished but not killed. The Thought Police don't want to kill nonconformists so much
as break them. This happens in Room 101 of the Ministry of Love, where prisoners are re-educated through degradation and torture.
(Funny sidebar: the name Room 101
apparently was inspired by a conference room at the BBC in which Orwell was forced to endure tediously long meetings.)
The Origins of the Thought Police
Orwell didn't create the Thought Police out of thin air. They were inspired to at least some degree by
his experiences in
the Spanish Civil War (1936-1939), a complicated and
confusing affair. What you really need to know is that there were no good guys, and it ended with left-leaning anarchists and Republicans
in Spain crushed by their Communist overlords, which helped the fascists win.
Orwell, an idealistic 33-year-old socialist when the conflict started, supported the anarchists and loyalists fighting for the
left-leaning Second Spanish Republic, which received most of its support from the Soviet Union and Josef Stalin. (That might sound
bad, but keep in mind that the Nazis were on the other side.) Orwell described the atmosphere in Barcelona in December 1936 when
everything seemed to be going well for his side.
The anarchists were still in virtual control of Catalonia and the revolution was still in full swing ... It was the first time
that I had ever been in a town where the working class was in the saddle,
he wrote in Homage to Catalonia.
[E]very wall was scrawled with the hammer and sickle ... every shop and café had an inscription saying that it had been collectivized.
That all changed pretty fast. Stalin, a rather paranoid fellow, was bent on making Republican Spain loyal to him . Factions and
leaders perceived as loyal to his exiled Communist rival, Leon
Trotsky , were liquidated. Loyal Communists found themselves denounced as fascists. Nonconformists and "uncontrollables" were
disappeared.
Orwell never forgot the
purges or the steady stream of lies and propaganda churned out from Communist papers during the conflict. (To be fair, their Nationalist
opponents also used propaganda
and lies .) Stalin's NKVD was not exactly like the Thought Police
-- the NKVD showed less patience with its victims --
but they certainly helped inspire Orwell's secret police.
The Thought Police were not all propaganda and torture, though. They also stem from Orwell's ideas on truth. During his time in
Spain, he saw how power could corrupt truth, and he shared these reflections in his work
George Orwell: My Country Right or Left, 1940-1943 .
...I saw newspaper reports which did not bear any relation to the facts, not even the relationship which is implied in an ordinary
lie. I saw great battles reported where there had been no fighting, and complete silence where hundreds of men had been killed.
I saw troops who had fought bravely denounced as cowards and traitors, and others who had never seen a shot fired hailed as the
heroes of imaginary victories; and I saw newspapers in London retailing these lies and eager intellectuals building emotional
superstructures over events that had never happened.
In short, Orwell's brush with totalitarianism left him
worried that "the very concept of objective truth is fading out of the world."
This scared him. A lot. He actually wrote, "This kind of thing is frightening to me."
Finally, the Thought Police were also inspired by the human struggle for self-honesty and the pressure to conform. "The individual
has always had to struggle to keep from being overwhelmed by the tribe," Rudyard Kipling once observed.
The struggle to remain true to one's self was also felt by Orwell, who
wrote about "the smelly little orthodoxies" that contend for the human soul. Orwell prided himself with a "power of facing unpleasant
facts" -- something of a rarity in humans -- even though it often hurt him in British society.
In a sense, 1984 is largely a book about the human capacity to maintain a grip on the truth in the face of propaganda and power.
It might be tempting to dismiss Orwell's book as a figment of dystopian literature. Unfortunately, that's not as easy as it sounds.
Modern history shows he was onto something.
When the Berlin Wall came down in November 1989, it was revealed that the Stasi, East Germany's secret police, had a full-time
staff of 91,000.
When the Berlin Wall came down in November 1989, it was revealed that
the Stasi , East Germany's secret police, had a full-time staff
of 91,000. That sounds like a lot, and it is, but what's frightening is that the organization had almost double that in informants,
including children. And it wasn't just children reporting on parents;
sometimes
it was the other way around.
Nor did the use of state spies to prosecute thoughtcrimes end with the fall of the Soviet Union. Believe it or not, it's still
happening today. The New York Times recently ran
a report featuring one Peng
Wei, a 21-year-old Chinese chemistry major. He is one of the thousands of "student information officers" China uses to root out professors
who show signs of disloyalty to President Xi Jinping or the Communist Party.
The New Thought Police?
The First Amendment of the US Constitution, fortunately, largely protects Americans from the creepy authoritarian systems found
in 1984 , East Germany, and China; but the rise of "cancel culture" shows the pressure to conform to all sorts of orthodoxies (smelly
or not) remains strong.
The new Thought Police may be less sinister than the ThinkPol in 1984 , but the next generation will have to decide if seeking
conformity of thought or language through public shaming is healthy or suffocating. FEE's Dan Sanchez
recently observed
that many people today feel like they're "walking on eggshells" and live in fear of making a verbal mistake that could draw condemnation.
That's a lot of pressure, especially for people still learning the acceptable boundaries of a new moral code that is constantly
evolving. Most people, if the pressure is sufficient, will eventually say "2+2=5" just to escape punishment. That's exactly what
Winston Smith does at the end of 1984 , after all. Yet Orwell also leaves readers with a glimmer of hope.
"Being in a minority, even a minority of one, did not make you mad," Orwell wrote.
"There was truth and there was untruth, and if you clung to the truth even against the whole world, you were not mad."
In other words, the world may be mad, but that doesn't mean you have to be.
" When the Berlin Wall came down in November 1989, it was revealed that the Stasi, East Germany's secret police, had a full-time
staff of 91,000.
When the Berlin Wall came down in November 1989, it was revealed that
the Stasi , East Germany's secret police, had a full-time staff
of 91,000. That sounds like a lot, and it is, but what's frightening is that the organization had almost double that in
informants,
including children. And it wasn't just children reporting on parents;
sometimes
it was the other way around."
Confidential informants should be illegal.
How many people are employed by the various Federal intelligence agencies, of which there are 17 the last time I heard. Hundreds
of thousands of Federal employees, protected by strong government employee unions.
When this shitshow goes live, it will only take a small team to shut off the water that is necessary to keep the NSA servers
cool in Utah.
Movies like the Matrix actually helped people to question everything. What is real and not. Who is the enemy, and can we be sure. And when Conspiracy theories become fact, people learn. The problem is in later generations who get indoctrinated at school and college to not think, not question.
Rational examination
is forbidden.
"... Neoliberalism became an incubator for a growing authoritarian populism fed largely by economic inequality. ..."
"... This apocalyptic populism was rooted in a profound discontent for the empty promises of a neoliberal ideology that made capitalism and democracy synonymous, and markets the model for all social relations. In addition, the Democratic proponents of neoliberalism, such as Bill Clinton and Barack Obama, participated in the dismantling of the social contract, widening economic inequality, and burgeoning landscapes of joblessness, misery, anger and despair. ..."
"... Liberal democracies across the globe appeared out of touch with not only the misery and suffering caused by neoliberal policies, they also produced an insular and arrogant group of politicians who regarded themselves as an enlightened political formation that worked " on behalf of an ignorant public ." ..."
"... As a regime of affective management, neoliberalism created a culture in which everyone was trapped in his or her own feelings, emotions and orbits of privatization. One consequence was that legitimate political claims could only be pursued by individuals and families rather than social groups. ..."
Talk of a looming recession is heating up as the global economy slows and President Trump's tiff with China unsettles financial
markets. As world trade contracts, stock markets drop, the manufacturing sector in the United States is
in decline for the first time in a decade , and farmers and steel workers continue losing their income and jobs.
Rumors of a coming recession accentuate fears about the further deterioration of conditions faced by workers and the poor, who
are already suffering from precarious employment, poverty, lack of meaningful work and dwindling pensions. A global economic slump
would make living standards for the poor even worse. As
Ashley Smith points out
, levels of impoverishment in the United States are already shocking, with "four out of every ten families [struggling] to meet the
costs of food, housing, health care, and utilities every month."
Just as the 2008 global economic crisis revealed the failures of liberal democracy and the scourge of neoliberalism, a new economic
recession in 2019 could also reveal how institutions meant to serve the public interest and offer support for a progressive politics
now serve authoritarian ideologies and a ruling elite that views democracy as the enemy of market-based freedoms and white nationalism.
What has not been learned from the 2008 crisis is that an economic crisis neither unites those most affected in favor of a progressive
politics nor does it offer any political guarantees regarding the direction of social change. Instead, the emotions that fueled massive
public anger toward elites and globalization gave rise to the celebration of populist demagogues and a right-wing tsunami of misdirected
anger, hate and violence toward undocumented immigrants, refugees, Muslims and people of color.
The 2008 financial crisis wreaked havoc in multiple ways. Yet there was another crisis that received little attention: a crisis
of agency. This crisis centered around matters of identity, self-determination and collective resistance, which were undermined in
profound ways, giving rise to and legitimating the emergence of authoritarian populist movements in many parts of the world, such
as United States, Hungary, Poland and Brazil.
At the heart of this shift was the declining belief in the legitimacy of both liberal democracy and its pledges about trickle-down
wealth, economic security and broadening equal opportunities preached by the apostles of neoliberalism. In many ways, public faith
in the welfare state, quality employment opportunities, institutional possibilities and a secure future for each generation collapsed.
In part, this was a consequence of the post-war economic boom giving way to massive degrees of inequality, the off-shoring of wealth
and power, the enactment of cruel austerity measures, an expanding regime of precarity, and a cut-throat economic and social environment
in which individual interests and needs prevailed over any consideration of the common good. As liberalism aligned itself with corporate
and political power, both the Democratic and Republican Parties embraced financial reforms that increased the wealth of the bankers
and corporate elite while doing nothing to prevent people from losing their homes, being strapped with chronic debt, seeing their
pensions disappear, and facing a future of uncertainty and no long-term prospects or guarantees.
Neoliberalism became an incubator for a growing authoritarian populism fed largely by economic inequality.
In an age of economic anxiety, existential insecurity and a growing culture of fear, liberalism's overheated emphasis on individual
liberties "made human beings subordinate to the market, replacing social bonds with market relations and sanctifying greed," as
noted by Pankaj Mishra. In this instance, neoliberalism became an incubator for a growing authoritarian populism fed largely
by economic inequality. The latter was the outcome of a growing cultural and political polarization that made "it possible for haters
to come out from the margins, form larger groups and make political trouble." This toxic polarization and surge of right-wing populism
produced by casino capitalism was accentuated with the growth of fascist groups that
shared a skepticism
of international organizations, supported a militant right-wing nationalism, and championed a surge of anti-immigrant, anti-Muslim
and anti-democratic values.
This apocalyptic populism was rooted in a profound discontent for the empty promises of a neoliberal ideology that made capitalism
and democracy synonymous, and markets the model for all social relations. In addition, the Democratic proponents of neoliberalism,
such as Bill Clinton and Barack Obama, participated in the dismantling of the social contract, widening economic inequality, and
burgeoning landscapes of joblessness, misery, anger and despair.
At the same time, they enacted policies that dismantled civic culture and undermined a wide range of democratic institutions that
extended from the media to public goods such as public and higher education. Under such circumstances, democratic narratives, values
and modes of solidarity, which traded in shared responsibilities and shared hopes, were replaced by a market-based focus on a regressive
notion of hyper-individualism, ego-centered values and a view of individual responsibility that eviscerated any broader notion of
social, systemic, and corporate problems and accountability.
Ways of imagining society through a collective ethos became fractured, and a comprehensive understanding of politics as inclusive
and participatory morphed into an anti-politics marked by an investment in the language of individual rights, individual choice and
the power of rights-bearing individuals.
Under the reign of neoliberalism, language became thinner and more individualistic, detached from history and more self-oriented,
all the while undermining viable democratic social spheres as spaces where politics bring people together as collective agents and
critically engaged citizens. Neoliberal language is written in the discourse of economics and market values, not ethics. Under such
circumstances, shallowness becomes an asset rather than a liability. Increasingly, the watered-down language of liberal democracy,
with its over-emphasis on individual rights and its neoliberal coddling of the financial elite, gave way to a regressive notion of
the social marked by rising authoritarian tendencies, unchecked nativism, unapologetic expressions of bigotry, misdirected anger
and the language of resentment-filled revolt. Liberal democracies across the globe appeared out of touch with not only the misery
and suffering caused by neoliberal policies, they also produced an insular and arrogant group of politicians who regarded themselves
as an enlightened political formation that worked "
on behalf of an ignorant public ."
The ultimate consequence was to produce later what Wolfgang Merkel describes as "a rebellion of the disenfranchised." A series
of political uprisings made it clear that neoliberalism was suffering from a crisis of legitimacy further accentuated by the Brexit
vote in the United Kingdom, the election of Donald Trump, support for the National Rally (
formerly known as the
National Front ) in France, and the emergence of powerful right-wing populist movements across the globe.
What has been vastly underestimated in the rise of right-wing populism is the capture of the media by authoritarian populists.
As a regime of affective management, neoliberalism created a culture in which everyone was trapped in his or her own feelings,
emotions and orbits of privatization. One consequence was that legitimate political claims could only be pursued by individuals and
families rather than social groups. In this instance, power was removed from the social sphere and placed almost entirely in
the hands of corporate and political demagogues who used it to enrich themselves for their own personal gain.
Power was now used to produce muscular authority in order "to secure order, boundaries, and to divert the growing anger of a declining
middle and working-class," Wendy Brown observes . Both
classes increasingly came to blame their economic and political conditions that produced their misery and ravaged ways of life on
"'others': immigrants, minority races, 'external' predators and attackers ranging from terrorists to refugees." Liberal-individualistic
views lost their legitimacy as they refused to indict the underlying structures of capitalism and its winner-take-all ethos.
Functioning largely as a ruthless form of social Darwinism, economic activity was removed from a concern with social costs, and
replaced by a culture of cruelty and resentment that disdained any notion of compassion or ethical concern for those deemed as "other"
because of their class, race, ethnicity, sexual orientation and religion. This is a culture marked by gigantic hypocrisies, "the
gloomy tabulation of unspeakable violent events," widespread viciousness, "great concentrations of wealth," "surveillance overkill,"
and the "unceasing despoliation of biospheres for profit."
George Monbiot sums up well some of the more toxic elements of neoliberalism, which remained largely hidden since it was in the
mainstream press less as an ideology than as an economic policy. He
writes :
Neoliberalism sees competition as the defining characteristic of human relations. It redefines citizens as consumers, whose
democratic choices are best exercised by buying and selling, a process that rewards merit and punishes inefficiency. It maintains
that "the market" delivers benefits that could never be achieved by planning. Attempts to limit competition are treated as inimical
to liberty. Tax and regulation should be minimized, public services should be privatized. The organization of labor and collective
bargaining by trade unions are portrayed as market distortions that impede the formation of a natural hierarchy of winners and
losers. Inequality is recast as virtuous: a reward for utility and a generator of wealth, which trickles down to enrich everyone.
Efforts to create a more equal society are both counterproductive and morally corrosive. The market ensures that everyone gets
what they deserve.
In the neoliberal worldview, those who are unemployed, poor consumers or outside of the reach of a market in search of insatiable
profits are considered disposable. Increasingly more people were viewed as anti-human, unknowable, faceless and symbols of fear and
pathology. This included undocumented immigrants in the United States and refugees in Europe, as well as those who were considered
of no value to a market society, and thus eligible to be deprived of the most basic rights and subject to the terror of state violence.
Marking selected groups as disposable in both symbolic and material forms, the neoliberal politics of disposability became a machinery
of political and social death -- producing spaces where undesirable members are abused,
put in cages
, separated from their children and subject to a massive violation of their human rights. Under a neoliberal politics of disposability,
people live in spaces of ever-present danger and risk where nothing is certain; human beings considered excess are denied a social
function and relegated to what Étienne Balibar calls the "death zones
of humanity." These are the 21st century workstations designed for the creation and process of elimination; a death-haunted mode
of production rooted in the "absolute triumph of irrationality."
Economic and cultural nationalism has become a rallying cry to create the conditions for merging a regressive neoliberalism and populism
into a war machine.
Within this new political formation, older forms of exploitation are now matched, if not exceeded, by a politics of racial and
social cleansing, as entire populations are removed from ethical assessments, producing zones of social abandonment. In this new
world, there is a merging of finance capital and a war culture that speaks to a moral and political collapse in which the welfare
state is replaced by forms of economic nationalism and a
burgeoning carceral state .
Furthermore, elements of this crisis can be seen in the ongoing militarization of everyday life as more and more institutions
take on the model of the prison. Additionally, there is also the increased arming of the police, the criminalization of a wide range
of behaviors related to social problems, the rise of the surveillance state, and the ongoing war on youth, undocumented immigrants,
Muslims and others deemed enemies of the state.
Under the aegis of a neoliberal war culture, we have witnessed increasing immiseration for the working and middle classes, massive
tax cuts for the rich, the outsourcing of public services, a full-fledged attack on unions, the defunding of public goods, and the
privatization of public services extending from health and education to roads and prisons. This ongoing transfer of public resources
and services to the rich, hedge fund managers, and corporate elite was matched by the corporate takeover of the commanding institutions
of culture, including the digital, print and broadcast media. What has been vastly underestimated in the rise of right-wing populism
is the capture of the media by authoritarian populists and its flip side, which amounts to a full-fledged political attack on independent
digital, online and oppositional journalists.
While it is generally acknowledged that neoliberalism was responsible for the worldwide economic crisis of 2008, what is less
acknowledged is that structural crisis produced by a capitalism on steroids was not matched by subjective crisis and consequently
gave rise to new reactionary political populist movements. As economic collapse became visceral, people's lives were upended and
sometimes destroyed. Moreover, as the social contract was shredded along with the need for socially constructed roles, norms and
public goods, the "social" no longer occupied a thick and important pedagogical space of solidarity, dialogue, political expression,
dissent and politics.
As public spheres disappeared, communal bonds were weakened and social provisions withered. Under neoliberalism, the social sphere
regresses into a privatized society of consumers in which individuals are atomized, alienated, and increasingly removed from the
variety of social connections and communal bonds that give meaning to the degree to which societies are good and just.
Establishment politics lost its legitimacy, as voters rejected the conditions produced by financialized capitalism.
People became isolated, segregated and unable "
to negotiate democratic dilemmas in a democratic
way " as power became more abstract and removed from public participation and accountability. As the neoliberal net of privilege
was cast wider without apology for the rich and exclusion of others, it became more obvious to growing elements of the public that
appeals to liberal democracy had failed to keep its promise of a better life for all. It could no longer demand, without qualification,
that working people should work harder for less, and that democratic participation is exclusively about elections. What could not
be hidden from many disenfranchised groups was that ruling elites produced what
Adam Tooze describes
as "a disastrous slide from the hypocrisies and compromises of the previous status quo into something even [more dangerous]."
As the global crisis has intensified since 2008, elements of a political and moral collapse at the heart of an authoritarian society
are more obvious and find their most transparent expression of ruthlessness, greed and unchecked power in the rule of Donald Trump.
As Chris Hedges points out :
The ruling corporate elites no longer seek to build. They seek to destroy. They are agents of death. They crave the unimpeded
power to cannibalize the country and pollute and degrade the ecosystem to feed an insatiable lust for wealth, power and hedonism.
Wars and military "virtues" are celebrated. Intelligence, empathy and the common good are banished. Culture is degraded to patriotic
kitsch . Those branded as unproductive or redundant are discarded and left to struggle in poverty or locked away in cages.
The slide into authoritarianism was made all the easier by the absence of a broad-based left mass movement in the United States,
which failed to provide both a comprehensive vision of change and an alignment of single-issue groups and smaller movements into
one mass movement. Nancy Fraser
rightly observes that following Occupy, "potential links between labour and new social movements were left to languish. Split
off from one another, those indispensable poles of a viable left were miles apart, waiting to be counterposed as antithetical."
Since the 1970s, there has been a profound backlash by economic, financial, political and religious fundamentalists and their
allied media establishments against labor, an oppositional press, people of color and others who have attempted to extend the workings
of democracy and equality.
As the narrative of class and class struggle disappeared along with the absence of a vibrant socialist movement, the call for
democracy no longer provided a unifying narrative to bring different oppressed groups together. Instead, economic and cultural nationalism
has become a rallying cry to create the conditions for merging a regressive neoliberalism and populism into a war machine. Under
such circumstances, politics is imagined as a form of war, repelling immigrants and refugees who are described by President Trump
as "invaders," "vermin" and "rapists." The emergence of neoliberalism as a war machine is evident in the current status of the Republican
Party and the Trump administration, which wage assaults on anything that does not mimic the values of the market. Such assaults take
the form of fixing whole categories of people as disposable, as enemies, and force them into conditions of extreme precarity -- and
in increasingly more instances, conditions of danger. Neoliberal capitalism radiates violence, evident in its endless instances of
mass shooting, such as those that took place most recently in El Paso, Texas, and Dayton, Ohio. This should not be surprising for
a society that measures power by the speed that it removes itself from any sense of ethical and social responsibility. As Beatrix
Campbell puts it ,
The richest society on the planet is armed. And it invests in one of the largest prison systems in the world. Violence circulates
between state and citizen. Drilled to kill, doomed to die: mastery and martyrdom is the heartbreaking dialectic of the manufacture
of militarized, violent masculinity . The making and maintaining of militarised masculinities is vital to these new modes of armed
conflict that are proliferating across the flexible frontiers of globalized capitalism, between and within states.
What has become clear is that
the neoliberal agenda has been a spectacular failure . Moreover, it has mobilized on a global level the violent political, social,
racial and economic energies of a resurgent fascist politics. Across the globe, right-wing modes of governance are appearing in which
the line collapses between "outside foreign enemies" such as refugees and undocumented immigrants, on the one hand, and on the other,
inside "dangerous" or "treasonous" classes such as critical journalists, educators and dissidents.
As neoliberal economies increasingly resort to violence and repression, fear replaces any sense of shared responsibilities, as
violence is not only elevated to an organizing principle of society, but also expands a network of extreme cruelty. Imagining politics
as a war machine, more and more groups are treated as excess and inscribed in an order of power as disposable, enemies, and [forced]
into conditions of extreme precarity. This is a particularly vicious form of state violence that undermines and constrains agency,
and subjects individuals to zones of abandonment, as evident in the growth of immigrant jails and an expanding carceral complex in
the United States and other countries, such as Hungary.
As neoliberalism's promise of social mobility and expanding economic progress collapsed, it gave way to an authoritarian right-wing
populism looking for narratives on which to pin the hatred of governing elites who, as Paul Mason
notes , "capped health and welfare
spending, [imposed] punitive benefit withdraws [that] forced many families to rely on food banks [and] withdraw sickness and disability
benefits from one million former workers below retirement age."
Across the globe, a series of uprisings have appeared that signal new political formations that rejected the notion that there
was no alternative to neoliberal hegemony. This was evident not only with the election of Donald Trump and the Brexit vote in the
United Kingdom, but also with the election of Jair Bolsonaro in Brazil and support for popular movements such as the National Rally
in France. Establishment politics lost its legitimacy, as voters rejected the conditions produced by financialized capitalism.
In the United States, both major political parties were more than willing to turn the economy over to the bankers and hedge fund
managers while producing policies that shaped radical forms of industrial and social restructuring, all of which caused massive pain,
suffering and rage among large segments of the working class and other disenfranchised groups. Right-wing populist leaders across
the globe recognized that national economies were in the hands of foreign investors, a mobile financial elite and transnational capital.
In a masterful act of political diversion, populist leaders attacked all vestiges of liberal capitalism while refusing to name neoliberal
inequities in wealth and power as a basic threat to their societies. Instead of calling for an acceleration of the democratic ideals
of popular sovereignty and equality, right-wing populist leaders, such as Trump, Bolsonaro and Hungary's Viktor Orbán defined democracy
as the enemy of those who wish for unaccountable power. They also diverted genuine popular anger into the abyss of cultural chauvinism,
anti-immigrant hatred, a contempt of Muslims and a targeted attack on the environment, health care, education, public institutions,
social provisions and other basic life resources. As Arjun Appadurai
observes , such authoritarian leaders
hate democracy, capture the political emotions of those treated as disposable, and do everything they can to hide the deep contradictions
of neoliberal capitalism.
In this scenario, we have the resurgence of a fascist politics that capitalizes on the immiseration, fears and anxieties produced
by neoliberalism without naming the underlying conditions that create and legitimate its policies and social costs. While such populists
comment on certain elements of neoliberalism such as globalization, they largely embrace those ideological and economic elements
that concentrate power and wealth in the hands of a political, corporate and financial elite, thus reinforcing in the end an extreme
form of capitalism. Moreover, right-wing populists may condemn globalization, but they do so by blaming those considered outside
the inclusive boundaries of a white homeland even though
the same forces victimize them . At the same
time, such leaders mobilize passions that deny critical understanding while simultaneously creating desires and affects that produce
toxic and hypermasculine forms of identification.
Authoritarian leaders hate democracy and do everything they can to hide the deep contradictions of neoliberal capitalism.
In this instance, an oppressive form of education becomes central to politics and is
used as a tool of power in the struggle over
power, agency and politics. What is at stake here is not simply a struggle between authoritarian ideas and democratic ideals, but
also a fierce battle on the part of demagogues to destroy the institutions and conditions that make critical thought and oppositional
accounts of power possible. This is evident, for example, in Trump's constant attack on the critical media, often
referring to them as "'the enemy of the people' pushing 'Radical Left Democrat views,'" even as journalists are subject to expulsion,
mass jailing and assassination across the world by some of Trump's allies.
Waging war on democracy and the institutions that produce it, neoliberalism has tapped into a combination of fear and cathartic
cruelty that has once again unleashed the mobilizing passions of fascism, especially the historically distinct registers of extreme
nationalism, nativism, white supremacy, racial and ethnic cleansing, voter suppression, and an attack on a civic culture of critique
and resistance. The result is a new political formation that I have called neoliberal fascism, in which the principles and practices
of a fascist past and neoliberal present have merged, connecting the worst dimensions and excesses of gangster capitalism with the
fascist ideals of white nationalism and racial supremacy associated with the horrors of a fascist past.
Neoliberal fascism hollows out democracy from within, breaks down the separation of power while increasing the power of the presidency,
and saturates cultural and social life with its ideology of self-interest, a survival-of-the-fittest ethos, and regressive notions
of freedom and individual responsibility.
What needs to be acknowledged is that neoliberalism as an extreme form of capitalism has produced the conditions for a fascist
politics that is updated to serve the interest of a concentrated class of financial elite and a rising tide of political demagogues
across the globe.
The mass anger fueling neoliberal fascism is a diversion of genuine resistance into what amounts to a pathology, which empties
politics of any substance. This is evident also in its support of a right-wing populism and its focus on the immigrants and refugees
as "dangerous outsiders," which serves to eliminate class politics and camouflage its own authoritarian ruling class interests and
relentless attacks on social welfare.
A new economic slump would further fuel forces of repression and strengthen the forces of white supremacy.
In the face of a looming global recession, it is crucial to understand the connection between the rise of right-wing populism
and neoliberalism, which emerged in the late 1970s as a commanding ideology fueling a punitive form of globalization. This historical
moment is marked by unique ideological, economic and political formations produced by ever-increasing brutal forms of capitalism,
however diverse.
Governing economic and political thinking everywhere, neoliberalism's unprecedented concentration of economic and political power
has produced a toxic state modeled after the models of finance and unchecked market forces. It has also produced a profound shift
in human consciousness, agency and modes of identification. The consequences have become familiar and include cruel austerity measures,
adulation of self-regulating markets, the liberating of capital from any constraints, deregulation, privatization of public goods,
the commodification of everyday life and the gutting of environmental, health and safety laws. It has also paved the way for a merging
of extreme market principles and the sordid and mushrooming elements of white supremacy, racial cleansing and ultranationalism that
have become specific to updated forms of fascist politics.
Such policies have produced massive inequities in wealth, power and income, while further accelerating mass misery, human suffering,
the rise of state-sanctioned violence and ever-expanding sites of terminal exclusion in the forms of walls, detention centers and
an expanding carceral state. An impending recession accentuates the antagonisms, instabilities and crisis produced by the long history
and reach of neoliberal ideologies and policies.
A new economic slump would further fuel forces of repression and strengthen the forces of white supremacy, Islamophobia, nativism
and misogyny. In the face of such reactionary forces, it is crucial to unite various progressive forces of opposition into a powerful
anti-capitalist movement that speaks not only to the range of oppressions exacerbated by neoliberalism, but also to the need for
new narratives that speak to overturning a system steeped in the machineries of war, militarization, repression and death.
Henry A. Giroux currently holds the McMaster University Chair
for Scholarship in the Public Interest in the English and Cultural Studies Department and is the Paulo Freire Distinguished Scholar
in Critical Pedagogy. His most recent books include: Neoliberalism's War on Higher Education (Haymarket 2014), The Violence of Organized
Forgetting (City Lights 2014), Dangerous Thinking in the Age of the New Authoritarianism (Routledge, 2015), America's Addiction to
Terrorism (Monthly Review Press, 2016), America at War with Itself (City Lights, 2017), The Public in Peril (Routledge, 2018) and
American Nightmare: Facing the Challenge of Fascism (City Lights, 2018) and The Terror of the Unforeseen (LARB Books, 2019). Giroux is also a member of Truthout 's Board of Directors.
"... The credibility of neoliberalism's faith in unfettered markets as the surest road to shared prosperity is on life-support these days. And well it should be. The simultaneous waning of confidence in neoliberalism and in democracy is no coincidence or mere correlation. Neoliberalism has undermined democracy for 40 years. ..."
"... The effects of capital-market liberalization were particularly odious: If a leading presidential candidate in an emerging market lost favor with Wall Street, the banks would pull their money out of the country. Voters then faced a stark choice: Give in to Wall Street or face a severe financial crisis. It was as if Wall Street had more political power than the country's citizens. 1 ..."
"... Even in rich countries, ordinary citizens were told, "You can't pursue the policies you want" – whether adequate social protection, decent wages, progressive taxation, or a well-regulated financial system – "because the country will lose competitiveness, jobs will disappear, and you will suffer." 1 ..."
"... How can wage restraint – to attain or maintain competitiveness – and reduced government programs possibly add up to higher standards of living? Ordinary citizens felt like they had been sold a bill of goods. They were right to feel conned. ..."
"... If the 2008 financial crisis failed to make us realize that unfettered markets don't work, the climate crisis certainly should: neoliberalism will literally bring an end to our civilization. But it is also clear that demagogues who would have us turn our back on science and tolerance will only make matters worse. ..."
"... The sad truth is, human nature is selfish, and the elites will always do whatever it takes to protect their own interests. With this being the basis of all political systems, it only comes down to how the elites can best serve their own interests. In democracies, it relies on creating an illusion of people's power. ..."
For 40 years, elites
in rich and poor countries alike promised that neoliberal policies would lead to faster economic growth, and that the benefits would
trickle down so that everyone, including the poorest, would be better off. Now that the evidence is in, is it any wonder that trust
in elites and confidence in democracy have plummeted?
NEW YORK – At the end of the Cold War, political scientist
Francis Fukuyama wrote a celebrated essay
called " The End of History?
" Communism's collapse, he argued, would clear the last obstacle separating the entire world from its destiny of liberal democracy
and market economies. Many people agreed.
Today, as we face a retreat from the rules-based, liberal global order, with autocratic rulers and demagogues leading countries
that contain well over half the world's population, Fukuyama's idea seems quaint and naive. But it reinforced the neoliberal economic
doctrine that has prevailed for the last 40 years.
The credibility of neoliberalism's faith in unfettered markets as the surest road to shared prosperity is on life-support these
days. And well it should be. The simultaneous waning of confidence in neoliberalism and in democracy is no coincidence or mere correlation.
Neoliberalism has undermined democracy for 40 years.
The form of globalization prescribed by neoliberalism left individuals and entire societies unable to control an important part
of their own destiny, as Dani Rodrik of Harvard
University has explained
so clearly , and as I argue in my recent books Globalization and Its Discontents
Revisited and People, Power, and Profits
. The effects of capital-market liberalization were particularly odious: If a leading presidential candidate in an emerging
market lost favor with Wall Street, the banks would pull their money out of the country. Voters then faced a stark choice: Give in
to Wall Street or face a severe financial crisis. It was as if Wall Street had more political power than the country's citizens.
1
Even in rich countries, ordinary citizens were told, "You can't pursue the policies you want" – whether adequate social protection,
decent wages, progressive taxation, or a well-regulated financial system – "because the country will lose competitiveness, jobs will
disappear, and you will suffer." 1
In rich and poor countries alike, elites promised that neoliberal policies would lead to faster economic growth, and that the
benefits would trickle down so that everyone, including the poorest, would be better off. To get there, though, workers would have
to accept lower wages, and all citizens would have to accept cutbacks in important government programs.
The elites claimed that their promises were based on scientific economic models and "evidence-based research." Well, after 40
years, the numbers are in: growth has slowed, and the fruits of that growth went overwhelmingly to a very few at the top. As wages
stagnated and the stock market soared, income and wealth flowed up, rather than trickling down.
How can wage restraint – to attain or maintain competitiveness – and reduced government programs possibly add up to higher standards
of living? Ordinary citizens felt like they had been sold a bill of goods. They were right to feel conned.
We are now experiencing the political consequences of this grand deception: distrust of the elites, of the economic "science"
on which neoliberalism was based, and of the money-corrupted political system that made it all possible.
The reality is that, despite its name, the era of neoliberalism was far from liberal. It imposed an intellectual orthodoxy whose
guardians were utterly intolerant of dissent. Economists with heterodox views were treated as heretics to be shunned, or at best
shunted off to a few isolated institutions. Neoliberalism bore little resemblance to the "open society" that Karl Popper had advocated.
As George Soros has
emphasized , Popper
recognized that our society is a complex, ever-evolving system in which the more we learn, the more our knowledge changes the behavior
of the system. 2
Nowhere was this intolerance greater than in macroeconomics, where the prevailing models ruled out the possibility of a crisis
like the one we experienced in 2008. When the impossible happened, it was treated as if it were a 500-year flood – a freak occurrence
that no model could have predicted. Even today, advocates of these theories refuse to accept that their belief in self-regulating
markets and their dismissal of externalities as either nonexistent or unimportant led to the deregulation that was pivotal in fueling
the crisis. The theory continues to survive, with Ptolemaic attempts to make it fit the facts, which attests to the reality that
bad ideas, once established, often have a slow death. 3
If the 2008 financial crisis failed to make us realize that unfettered markets don't work, the climate crisis certainly should:
neoliberalism will literally bring an end to our civilization. But it is also clear that demagogues who would have us turn our back
on science and tolerance will only make matters worse.
The only way forward, the only way to save our planet and our civilization, is a rebirth of history. We must revitalize the Enlightenment
and recommit to honoring its values of freedom, respect for knowledge, and democracy.
Follow Joseph E. Stiglitz, University Professor at Columbia University, is the co-winner of the 2001 Nobel Memorial Prize, former
chairman of the President's Council of Economic Advisers, and former Chief Economist of the World Bank. His most recent book is People, Power, and Profits: Progressive Capitalism for an Age
of Discontent .
In his 'After
Neoliberalism' essay of May 30, 2019, Joseph Stiglitz (like many PS contributors) excoriated the 4-decade neoliberal episode in
the US and many other Western Democracies. He advocated development of a progressive capitalism focusing on true sources of national
wealth built on public investment in education, health, research and other basic functions of government. This time (PS, November
4, 2019, 'The End of Neoliberalism') )in a similar vein, he describes how neoliberalism has "undermined democracy for the last
40 years," and advocates a 'rebirth of history as the only way forward. I, like many others, wholly agree with his characterization
of the economics profession's descent into neoliberal ideology and generally admire his body of work. However, the calls to 'progressive
capitalism' and even more to a 'rebirth of history' are quite puzzling. A much more detailed development of the challenges to
be overcome and the steps to be taken is sorely needed.
Regrettably, Stiglitz and his eminent colleagues Amartya Sen, and Jean-Paul Fitoussi failed to propose what could have been a
body blow to neoliberal theory and practice -- an in-depth revision of the concept and accounting measures embedded in the System
of National Accounts (SNA) measure of GDP. But the Stiglitz-led report, issued in 2009 -- only shortly after the GFC -- avoided
direct criticism of neoliberal failures and shied away from proposing fundamental reform to GDP accounting and consequent biased
decision processes. The report did identify major problems with current GDP accounting, but tamely recommended only to supplement
current GDP measures with a dashboard of supplementary indicators. An opportunity badly missed. Stiglitz' December 2018 essay
"Beyond GDP," (on which I commented), however, extolled the virtues, and indeed the necessity, of accurate measures of social
impact of government and economic activity, but a critical follow-through has been lacking. Though a range of alternative measures
of social wellbeing are being used by a several countries none have had much impact on the centrality of GDP growth and stability
as the measure of social policy success or failure. Current GDP measures allow neoliberal values, based on promotion of commercial
capitalism and reduction of public-interest spending by government, to continue to dominate US Republican policies -- taken to
near-incredible extremes by the Trump administration -- as well as condone austerity policies in much of the western world.
As I advocated in my 2018 comment on Stiglitz PS essay and in more detail in my 2017 book, responsibility for outputs and outcomes
from use of all forms of capital (commercial, environmental, human, and social and relationship) should be borne by all public
and private enterprises, results of all uses of these capitals should be incorporated in annual reports, and ultimately should
be incorporated in the SNA to guide economic, social and security policies nationally and internationally. Promotion of these
concepts has been taken up by a not-for-profit organization the International Integrated Reporting Council (IIRC). Stiglitz and
like-minded economists would do well to examine these issues further via readily accessible internet sites.
In support
of Stiglitz' Theory, I would note that the power of the combined of the US Middle Class and Upper Middle class still supersedes
the power of the combined wealth of the US 1% and the lower 50%. This is enough wealth and power to defeat Centrism (the rule
of the 1% by appeasing the lower 50% through subsidies (think the current Egyptian government ruled by Assisi in support of Egyptian
Elites.)
With proper organization and political fusion of the middle class and upper middle class in America, they together have the
power to overthrow Centrism controlled by Plutocrats, and re-institute a Democratic State in America.
In this regard, the power of Financialism has reached its limits, but only if the US middle class and upper middle class fusion
can create a political power that opposes Centrism.
The enemy of this theory is that the US upper middle class is so proud of its ability to supersede the middle class that it
cannot fuse with the standard middle class politically, and believes its financial power comes from the condolences of the 1%
upper class in America that supports it because it supports them.
Clearly, the "Responsibility of the Middle Class" to maintain American Idealism will be destroyed if the Upper Middle Class
denigrates its ideal, and the US middle class joins the lower US worker class in demanding revolution against the 1% Elites.
The Responsibility of the Middle Class in America to preserve the American Nation as an affluent class, through its political
power is now sadly waning. The US Middle Class has lost all three sociological important powers: 1) Status; 2) Power; 3) Economic
equality.
The failure of the US Middle Class to re-obtain its previous power as a political/social/economic entity in America would be
the destruction/obviation of the previous American ideal (a house with a white picket fence, a dog or can, children, financial
security and raising children who will do better than their parents).
Nobody in
the World can say that the Civil Rights movement led by Martin Luther King did not succeed in creating a better life for Blacks
and other minorities in the United States.
We now need a Middle Class movement to accomplish the same feat: the politically equivalent equality of the US Middle
Class to the US Upper Class
D. V. Gendre Nov 11, 2019 Only a blind
and ignorant like Mr. Stiglitz (elitist) can claim that we live in a neoliberal world.
In reality there were never so many regulations upon us as today. Not only businesses but also the private person is crushed by
ever more regulations! Year over year those regulations are getting more complex then ever.
In ancient times people lived together only guided by 10 Commandments on two stone tablets. Today the first page of any legal
code contains more then ten commandments, laws etc.
Mr. Stiglitz should be advisor to Kim Jong-un. He certainly beliefs the fairytale of neoliberalims.
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The biggest harm to the capital market was done by two things:
1. The monopoly on money supply, i. e. central banks
2. The abandoning of the gold standard without any adequate replacement
Both measures have nothing to do with neoliberalism or deregulation but with socialistic achievments!
Already in the communist manifesto from 1848 the monopoly on the money supply was a central goal.
Both measures have been introduced without resistance because not only banks were benefitig but more so politicians!
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Animesh Ghoshal Nov 11, 2019 I read
with interest Prof. Stiglitz's assertion that in "economists with heterodox views were treated as heretics to be shunned, or at
best shunted off to a few isolated institutions". These institutions presumably include Columbia University, the World Bank, and
the Council of Economic Advisors.
John Hansen Nov 11, 2019 Excellent,
timely, and thought-provoking. Thank you.
As you note, "The credibility of neoliberalism's faith in unfettered markets as the surest road to shared prosperity is on
life-support these days," and, "The effects of capital-market liberalization [have been] particularly odious."
I totally agree. In fact, I spent thirty years at the World Bank fighting for "shared prosperity" in countries around the world
and was always concerned that excessive capital market liberalization could be a serious barrier to balanced, sustainable growth.
(By the way, I am still most grateful to you for speaking out against the Washington Consensus and other neoliberal ideas that
don't work while you were our Chief Economist.)
Since retiring, I have focused on fighting inequality in America. A major source of our inequality is the overvalued dollar
that destroys farms, factories, jobs, and entire communities by destroying the international competitiveness of America's producers
and workers.
The overvalued dollar is caused by excessive inflows of foreign capital seeking to purchase dollars and dollar-based assets
-- a reflection to the excessive global demand for dollars that is part of today's globalization. This overvaluation makes our
exports artificially expensive and our imports artificially cheap. Thus, for example, we borrow money from China to pay them to
make things for us that we could be making for ourselves at internationally competitive prices -- were it not for the dollar's
overvaluation.
The overvalued dollar shifts both domestic and foreign demand from made-in-America to foreign-made goods, leaving American
producers without the demand needed to grow, invest, employ more workers, and boost wages. Hence our increased inequality and
polarization.
You rightly conclude that the "belief in self-regulating markets and [the] dismissal of externalities as either nonexistent
or unimportant led to the deregulation that was pivotal in fueling the [2008] crisis" and that "unfettered markets don't work."
I am pleased to note that a new macroeconomic policy, which is designed to put appropriate fetters on excessive capital flows
into our financial markets, is central to the "Competitive Dollar for Jobs and Prosperity Act" (S. 2357) that Senators Baldwin
and Hawley recently presented to the US Senate on a bipartisan basis.
This legislation will implement a Market Access Charge (MAC). The MAC will restore the long-broken link between exchange rates
and balanced trade by imposing a moderate charge on foreign capital inflows whenever America is suffering job-killing, wage-killing
trade deficits -- a clear indication that the dollar is overvalued.
By dampening foreign demand for dollars and dollar-based assets, the MAC will allow the USD to return to a rate that balances
trade. With a fully competitive dollar, Americans will be able to earn as much producing exports as they spend on imports. And
because the size of the MAC charge will be linked to the size of the trade deficit, the MAC will always work to keep the dollar
at a trade-balancing level.
In addition to the higher output, employment, and wages that the MAC will make possible for America's producers and workers,
the MAC will help moderate the out-of-control financialization that will continue to cause serious damage like the Crash of 2008
unless appropriate regulations are put in place.
On the international front, eliminating US trade deficits will reduce the trade surpluses of mercantilist countries like China
and Germany. In fact, the MAC will help pave the way to the long-held goal of the G-8 and other international bodies -- growth
for all nations that is stable, balanced, sustainable, and equitably shared.
Thanks again for your thought-provoking article. Let us hope that, with the support of concrete proposals such as the Market
Access Charge, your article will become the clarion call to action that our country so urgently needs to take.
The sad truth is,
human nature is selfish, and the elites will always do whatever it takes to protect their own interests. With this being the basis
of all political systems, it only comes down to how the elites can best serve their own interests. In democracies, it relies on
creating an illusion of people's power.
The electorate is of average intelligence and education, by definition, whereas the elites
are superior. It goes without saying that the electorate would be played like a fiddle by the elites whilst believing that they
are acting out of their own free will. In an autocracy, the populace is either subdued by the threats of violence, or brainwashed
into believing that those in power act for the good of the whole society. On rare occasions, this might even be true, such as
Lee Kuan Yew in Singapore, and the various noble emperors throughout Chinese history. In democracies, this is more difficult,
as those seduced by power are often more ruthless and more ready to deceive the public than those with noble intentions, and consequently
always have the upper hand.
There is a far deeper
and more profound issues that underlies the ills wrought by Neoliberalism, but which is not limited to Neoliberalism.
That great issue facing the world today is that a significant portion of the population, if not the vast majority of the population
and including the Elite, appear to be unable to distinguish between reality, and the abstractions/tools/models that we create
for ourselves in order to be able to manipulate and or predict future events.
We have enough experimental experience to know that that given a certain specific and limited set of input conditions that
Neoliberalism has a pretty good track record of predicting what will happen next. We also have the experimental data that shows
that outside of the abovementioned narrow range of input conditions, the ability of Neoliberalism to predict what happens next
in the real world simply sucks balls.
The same is true of socialism. Given an exceedingly narrow and specific set of input conditions, yeah it works OK as a predictor
of future real world events. Anything outside of that input range however is a total train wreck.
The same is true of economics more generally.
And physics, medicine, geology, whatever....
So the real question is why do people feel the need to confuse their abstractions/tools/models, with reality? Why do people
confuse the abstractions/tools/models that we make for ourselves to help us predict what the world will do next, with what the
universe actually is? Why do people write libraries fully of convoluted arguments 'proving' why this or that abstraction/tool/model
must work in reality, when the experimental truth that it simply does not work has been made plain to see by thousands upon thousands
of real world experimental results?
Perhaps the answer to the above question is that most bodies of abstract knowledge, such as economics and political theory
and many of the 'sciences', have more in common to religion than they do to actual science.
Well that's the hypothesis... It would be great to see the experimental results.
Alfred Korzybski
attempted to confront this confusion several decades ago, with little success. But you might enjoy his book, Science and Sanity.
Reply
There is
nothing wrong with neoliberalism!!! Fix the drug problem, fix the education system by getting back to the basics of english grammer,
math and sciences. Create a culture among the young of learning to study and try, try again when they fail a test. Give them generous
amounts one on one tutoring. Teach them social media have destroyed their attention span and that is why they cannot learn from
a book and do their homework. Explain to them that embracing drugs, tattoos and social media is a cancer. Until this happens,
my money is on China winning the race (no drug problem, motivated hard working people).
"Neoliberalism"
is neither. It is not attached to liberty, but to slavery. And it is nothing new. Plutocracy is the cancer of civilizations, and
kills them readily. But this time, the entire biosphere is going down.
A better name for "Neoliberalism" would be "plutophilia", the love of the darkest passions, the love of plutocracy, which is
etymologically and in reality, the rule of evil (as this is exactly what pluto-kratia means: the rule of wealth being a particular
case of Pluto's propensities).
"Neoliberalism", was initially called "trickle down". One of its axioms was as professor Stiglitz says: "the credibility of
neoliberalism's faith in unfettered markets as the surest road to shared prosperity". However, by "markets" one really meant "merchants".
Indeed, what is a market? Who dominates a market? Well, those with enough capital to do so. In other words, the wealthy, or
those that banks have decided to lend to typically, again, those with collateral, namely the wealthy. So the banking system, if
it looks for a profit, makes the wealthy wealthier. Hence the so-called "unfettered markets" were, in truth, the unfettered wealthiest,
while the fetters were put on everybody else.
But, unfettered, wealth grows exponentially (as the wealthiest have nearly all the money and lend it, leveraged, to the wealthiest,
namely themselves).
This is exactly what happened: the wealthy got wealthier. And what is wealth? It is power onto others. So the powers of a few
grew, onto most people, helped along by a government by "representatives" which learned to act in its own best interest, serving
power, that is, wealth.
"Neoliberalism" fostered, in turn, other myths, first of which was that, unfettered globalization, worldwide, was good for
the Republic. Actually, globalization was a disaster: it undermined social rights and taxation.
The last spectacular example of the disaster engineered by unfettered globalization was the Roman Republic. The Roman REPUBLIC,
which lasted 5 centuries, had an absolute wealth limit. And it lasted 5 centuries because it had an absolute wealth limit. The
Florence Republic fell to plutocrats, the Medicis, within three centuries, precisely because it had no wealth limit.
There was an absolute wealth limit, because the wealth tax, during the Roman Republic, was 100% above a threshold (the threshold
was pretty low, at most 30 million 2019 dollars, and maybe as low as ten million).
However, after 200 BCE, and the Second Punic war, having had to fight in Greece, Spain, Africa, the Roman republic became global.
Yet, taxation was still local, so wealthy Romans were able to escape the wealth limit, and Roman billionaires appeared. They immediately
started to plot against the Republic. The best way to do that was to corrupt it, by buying politicians. It took many generations,
but the Republic declined and collapsed, in spite of the life endangering efforts of many heroes, including the Gracchi brothers,
Marius, and his nephew Caesar (Caesar passed a wealth distribution law in 59 BCE).
Plutocracy expects We The People to believe that a few know best, and deserve all the wealth, all the powers. As a result calamitous
policies are engaged into, because only a few brains, without debate, devoured by greed, don't think too well. Moreover, plutocratic
policies look accidentally bad, but they are actually so by design: the worse things get, the more the worst gets going.
A particular example of these satanic policies is the climate catastrophe, which is part of a mass extinction, the likes of
which have not been seen in 70 million years. There were technologies, at the ready already in 1990, to prevent the CO2 catastrophe:
in 2019, France pollutes 5 tons of CO2 per capita (the world average), California 9.2 tons, the USA 16 tons, Canada and Australia
more than 16 So France knows how to do it, and the others chose not to (the UK, Spain and Italy are around 6 tons; whereas hysterically
pro-coal Germany is at 10 tons...) The mood in France is more ecological, more egalitarian, more social... All this is related:
respect the environment, just as, and because, you respect your neighbor. Disrespect the environment, as countries like the US,
Australia and Canada do, disrespect the neighbor.
The global plutocracy is indeed intensely related to its fossil fuel component: fossil fuel money is recycled through Wall
Street. US President FD Roosevelt set-up that system, meeting with Ibn Saud on the Great Bitter lake in Egypt, shortly before
his death. Similarly, when Obama became president, he presented fracking as "the bridge fuel to the future", and Wall Street,
applauding, made massive fracking investments on the lands and water Obama put at its disposal. Thus, once again, the US is the
world's greatest fossil fuel producer: alleluia, say the "America First" crowd, and one expects them to make dark secret masses
to their hero Obama, who made fracking into the lifeblood of the US.
Plutocracy rules through minds. Careful disinformation, and lack of significant information needs to be fed to the masses.
Here is an example:
The New York Times just woke up to the fact that climate scientists systematically underestimated the gravity of the climate
crisis we are in. The paper couldn't explain why this happened, but showed with great clarity how much it happened. I sent a comment
basically explaining that the "Neoliberal" regime paid the salaries of those scientists, so they couldn't be too alarmist, if
they wanted to be employed.
The New York Times apparently found my explanation alarming, and refused to publish it. Just as, over the years, much of the
MainStream Media has found any discourse against the "Neoliberal" order deranged and alarming (and censored thousands of my comments).
Here my comment explaining why scientists were not too alarmed by the climate catastrophe:
The problem has been that scientists are paid by governments which are manipulated by plutocrats, most of them part of the
establishment And the establishment is fossil fuel plutocracy dependent (say, Wall Street, as an example).
So scientists do not want to bite the hand that feed them. And this is still true. The real truth is that the giant masses
of ice of Antarctica will melt with a warming of just a few more degrees. I have explained the exact mechanism in essays on my
site, in great detail, for more than a decade. The reason is that half of Antarctica is under water And the densest water is at
4 degrees Centigrade (roughly 40 Fahrenheit)
Thus a hyper catastrophic melting is entirely possible Millennia before what the old, baseless, "scientific" analyses pretended.
Also a serious diminution of the oxygen content of the atmosphere, ridiculed by well-fed scientists, is actually entirely possible
under very plausible (yet complex) scenarios. And so on.
The plutocracy which rules over us is mostly fossil-fuel based. Any plutocracy knows that it needs to control the minds. Nowadays
this means controlling the scientists. The gross attack, "climate denier" style, are there only to confuse us.
The real danger is the subtle disinformation that the situation is not dire, that we have time, it's a question for the grandchildren.
I have lived in smoke for weeks on end in the tech metropolis of the San Francisco Bay Area: the burning climate catastrophe is
upon us now. One can see it very clearly when one looks outside, and all one sees is smoke.
To free ourselves from "Neoliberalism", which is economic neofascism by another name, will require a great intellectual effort.
I don't see our schools, including universities, committed to it. Yet. Thank, prof. Stiglitz, for the effort!
Your etymology is almost as bad as your economics. In Plato's dialogue Cratylus Socrates argues that the etymology of Hades
is "his knowledge (eidenai) of all noble things" rather than, as widely believed, "unseen."
Later on Greeks began to refer to Hades as Plouton. The root of Plouton is "wealthy" meaning that from below (the soil)
come riches (e.g., fertile crops, metals and so on). Not only that but Plouton became the Roman god Pluto who distributed riches
from below. Call that "trickle up" rather than "trickle down."
So stop maligning plutocrats. It is a vulgar habit.
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Patrice Ayme Nov 11, 2019 Dear
Ian:
Thanks for the comment. It doesn't address any of the very deep reasons I presented to object to have a few individuals
exert huge amounts of power on others, and thus, automatically corrupt democracy, pervert the economic system, and bring
us back to the collapse of the Republic the Romans went through (before the monstrous plutocracy known as the Roman empire
itself collapsed soon afterwards).
Socrates was practicing traditional euphemism science about Hades. The question of the etymology of Hades (Hell, but
also the enemy, in Hebrew, Satan), Pluto, Ploutos, etc. is fascinating. I have long pondered the question, I am a specialist.
I am actually going to write an essay on the subject, just in your honor. The confusion between the god of riches (Ploutos)
and the god of the underground (Pluto) was deliberately made, and as many ways to NOT say the word "Hades" (there were nearly
50 euphemisms for Hades). The New Testament mentions "Hades" in its Greek original many times (now translated as "Hell").
Also Hades is represented as a dark figure, with long wings...
The existence of plutocracy is intrinsically evil, because no species, and certainly no species of primate, is made to
be ruled by a few having the powers of millions. When Obama was president at some point he put the Gates (of hell) in command
of US education. In Obama Reagan perverted mind, the hyper wealthy had, assuredly, achieved supreme wisdom. Never mind that
Gates (of hell) never finished college. Same Gates (of hell) are now telling us they won't work, it they had only ten billion
dollars plus a 50 billion dollar foundation under their command. Such individuals are therefore only motivated by greed,
they have no appreciation for the glory of the human spirit. For them, only greed is the motivation, not care, love, thinking,
etc. And they impose their ways on the entire planet, and their emotional, not to say nervous, system, reduced to greed.
That's evil. Even Jesus noticed. But now, as the biosphere implodes under their greedy blows, we should all be able to notice.
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As the mathematics of economics seldom seems to use complex math (real and imaginary numbers) that is required to properly
describe a system with feedback/feedforward characteristics (ie supply/demand markets where demand drives supply, etc.), the observation
that the models didn't "see" instabilities is a bit of a DUH. Just adding a time delay, like putting a pillow over a thermostat,
will make a feedback control system unstable. Adding bureaucratic delay (zoning, EIR's, etc.) to housing development makes housing
prices unstable creating boom/bust cycles. It is all just simple math but you need a dynamic equation to describe a dynamic problem.
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ron smith Nov 12, 2019 You mistake
complex variables for the mathematics of complexity. Complex variables is standard fare but there has been no Newton to create
a "calculus" of Complexity. The events you describe are real and, it seems, cause probability distribution function instability
which makes a mess of the math tools we now have. Those fond of science fiction often say that we are awaiting Hari Seldon,
who was the creator of an (imaginary -- it is sci fi) approach to statistics that had accurate application to certain social
situations. [Isaac Asimov's "Foundation" trilogy.]
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Jay Kay Nov 11, 2019 More generally,
the most important character of the equation or black-box or digital model or whatever, is that it exhibits a useful degree
of predictive ability as to how the real world will operate given a specific set of input conditions when tested experimentally.
That's what a successful hypothesis is, it's a useful predictor of future events.
Sure, once you have a usefully predictive model of how the real experimental world works, you can open up your model to
investigation to see whether the architecture of the model can give you clues as to what may be in play in the real world,
and what future experiments to design based on that.
However too often what passes for 'science' or economics or politics science modelling:
- has essentially no useful predictive ability when tested experimentally. It just fails constantly. Global Warming models
anyone?
- has no measurable input conditions that can be used to experimentally test the model. It is essentially a philosophy.
Much economic theory falls into this category.
- has a degree of useful predictive ability over a narrow set of input conditions, but then fails miserable in every other
circumstance and yet people insist on constantly applying said model outside of its useful range as a predictor of future events.
Communism works just fine on the nuclear family scale, and implodes at every other scale.
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Most of the so-called Heterodox views are really just warmed-over versions of economic concepts from long-dead economists containing
internal assumptions that "wise economists and politicians" are smart enough to understand and direct the system. Meanwhile, the
complexity of the connection between the economic system and technology is further increasing the rate of change as technology
changes. As none of these heterodox economists seem to have a real understanding of the technology revolution with the creation
of "free" goods and goods with high R&D costs combined with insignificant production costs and how that interacts with economic
statistics and how this all relates to economic growth and its measurement, I am less confident that they can give better results
than markets.
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Raghaba Sahu Nov 10, 2019 The real questions:
1. Are Capitalism and Democracy compatible?
2. What type of economic model will be compatible with Democracy?
3.Should the influence of money on political choices be curbed?
Ian Maitland Nov 10, 2019 "If a leading
presidential candidate in an emerging market lost favor with Wall Street, the banks would pull their money out of the country.
Voters then faced a stark choice: Give in to Wall Street or face a severe financial crisis. It was as if Wall Street had more
political power than the country's citizens" (Stiglitz).
Folks, try a simple thought experiment. For Wall Street substitute "IMF."
Now, do you see any difference? Try this one: "It was as if the IMF had more political power than the country's citizens."
Does Stiglitz propose to put the IMF out of business? No. So why is it OK by Stiglitz if countries get themselves in hock to
the IMF but not if they get themselves in hock to Wall Street? In either case, their people's sovereignty is diluted.
In fact, it gets even worse. Stiglitz has been a consistent advocate of throwing more money at deadbeats. He is a dinosaur
who really believes that foreign aid from rich countries will help poor countries grow rather than encourage them to get deeper
into debt. He has called for debt relief for Puerto Rico to make the island's debt sustainable! Hasn't he heard of moral hazard?
If he gets his way, why should Puerto Rico stop issuing debt to fund its expenses -- something it has done since 1973.
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Patrice Ayme Nov 11, 2019 IMF, under
Lagarde, has forbidden governments to cut down on basic social services when they get help. The IMF functions like a charity.
Wall Street functions like sharks. Greed comes naturally to the lowest critters, and that is very good to make a global ecology,
yet, we, humans, aspire for more. This is the problem with plutocracy: reduction to the lowest, biggest sharks. Reduction not
just of the economy to this lowest realm, but even reductions of highest human aspirations to this. Sharks are hungry, yet,
not too smart, and, in a Pluto economy, they control the flow, and even the genesis, of ideas (or lack thereof).
Another problem is the reduction of incentives: Gates (of hell) just said (semi-joking) he won't work if he had just ten
billion dollars plus a 50 million dollars foundation he controls. Question: what about the rest of us? Should we stop working,
because we have no prospect to make ten billions?
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Patrice Ayme Nov 11, 2019 IMF, under
Lagarde, has forbidden governments to cut down on basic social services when they get help. The IMF functions like a charity.
Wall Street functions like sharks. Greed comes naturally to the lowest critters, we, humans, aspire for more. This the problem
with plutocracy: reduction to the lowest, biggest sharks. Reduction not just of the economy to this lowest realm, but even
reductions of highest human aspirations to this.
Another problem is the reduction of incentives: Gates (of hell) just said he won't work if he had just ten billion dollars
plus a 50 million dollars foundation. Question: what about the rest of us? Should we stop working, because we don't have ten
billions?
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Adrian Wu Nov 11, 2019 IMF, Wall Street,
what is the difference ? Still the same old bunch of elites. Reply
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"Even in rich countries, ordinary citizens were told..." describes what I felt coming back from years abroad: What happened?
Who gave these people authority to tell me what (and especially what not) to think and say? Reply
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David Schraa Nov 10, 2019 That's right,
but watch out for what you ask for. "History" can mean nationalist exaggerations about things such as Kosovo, or unionism in Northern
Ireland, or nostalgia for Russian greatness. We need real, responsible history that would, for example, illuminate the incredible
contributions of the EU to prosperity, solidarity and peace. But in so doing, we need to have history that can not only inform
but touch people emotionally, whereas much academic or "woke" history does the opposite today, in the rare event that it breaks
out of narrow academic or activist discussions. The NYT was right to broaden knowledge about the history of slavery, but utterly
wrong if the conclusion is to take the view that "1619" is the essence of the US story and leave the profoundly important intellectual
history of "1776" and its legacy to the right.
That's absolutely right, but the populist paradox is that "the people" rebel against complexity and the evolution of society
by voting right, not left. The left has to find a voice that reorients the discussion, but hasn't managed to do so in a way that
touches many voters.
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Except that, at least in the US and the UK, and to a certain extent in the rest of Europe as well, people seem to be voting
against "adequate social protection, decent wages, progressive taxation, or a well-regulated financial system" ... those are not
the issues voters are pounding drums about (left-wing activists, yes, but not lots of votes). So how do we overcome the suspicion,
resentment of "elites" and low information that motivates those positions?
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Jonathan Willinger Nov 10, 2019
Part of any reexamination of neo-liberal orthodoxy must be a consideration of Keynes' view that currency exchange rates need to
be controlled to curtail excess trade surplus and deficits. Firstly, if we had listened to Keynes there would be no way that the
American manufacturing base would have been so hollowed out. Secondly, as Keynes foresaw, without an international body controlling
cross currency valuation nations would incur continual surplus and deficits thereby leading to a return to the protectionism of
the '30's. I have never understood why Keynesians like Krugman and Somers have forgotten or dropped this extremely important part
of Keynes' thinking. I would like to know what Prof. Stieglitz' view on this point is....
nigel southway Nov 10, 2019 Stiggy
and the base of economists that went along with global free trade are the main problem. They brainwashed our leadership to allow
the finanialization of our economies now thank god we have some leadership such as trump to call a halt and start the question
of what's next
It's certainly a more nationalistic future and away from multilateralism and we also need to question the myth of man made climate
change which is fast looking like a huge hoax
Joe Ryan Nov 10, 2019 Prof. Stiglitz's essay
recommends discrimination on the basis of national origin as a way of reforming capitalism. Which is a bad idea.
The way the essay ends up in this bad situation is, at least in part, due to poor choice of words.
The essay re-phrases the idea of discrimination on the basis of national origin (which is bad), calling it opposition to globalism
(which is popular).
The essay also falls for the rhetorical trap of identifying capitalism with free markets, a confusion that is inherent in the
term, "neoliberalism." For capitalism, however, "free markets" (and "laissez faire") isn't about "perfectly competitive markets,"
which capitalists hate. It's about delegitimizing any interference in capitalists' control of firms.
We need less inventive vocabulary in order to have clearer thinking about how to both regulate and use the market mechanism.
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John Tegner Nov 10, 2019 Moving quickly
to matters at hand, we know what to do, can we act with urgency?
1. reform the US tax code, dramatically simplifying it and increasing rates of taxation based on income levels to a max rate of
50% for top earners (both income and capital gains)
2. implement strict term limits for politicians
3. make education and health care our nation's top priority after defense leveraging technology to reach the masses (we already
have the tools, we need to apply them with intent)
4. return to a policy of sustainability, deliberately incentivizing and investing to secure the future
Who's ready to take these steps?
Douglas Leyendecker Nov 10, 2019
Maybe Stiglitz wasn't aware that..."Over the last 25 years, more than a billion people have lifted themselves out of extreme poverty,
and the global poverty rate is now lower than it has ever been in recorded history. This is one of the greatest human achievements
of our time," World Bank Group President Jim Yong Kim said.
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nigel southway Nov 10, 2019 This
was at OUR expense.... mass wealth transfer not any wealth creation.... we did not sign up to build a middle class in china
you need to get educated as to how much damage has been done. Reply
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Ian Maitland Nov 10, 2019 Shout it
from the rooftops!
As 2015 economics Nobelist Angus Deaton says: "Life is better now than at almost any time in history. More people are richer
and fewer people live in dire poverty. Lives are longer and parents no longer routinely watch a quarter of their children die."
And little or none of the credit for that belongs to Stiglitz and his fellow mandarins at the World Bank and IMF.
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nigel southway Nov 10, 2019 wealth
transfer.. from us to "them" Reply
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mtcmom222a Loppy Nov 10, 2019 Free
Market? That's a JOKE...ONLY a Superliberal can be so deluded.. Governments consume 40 to 60 % of the People's Time/Money/Resources.....and
over regulate another big chunk... what Planet are you living on?? Reply
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Louis Woodhill Nov 10, 2019 Capitalism
depends upon stable money, which we have not had since 2001. The 2008 financial/economic crisis was the result of the most violent
monetary deflation in U.S. history, and this was 100% the result of Federal Reserve incompetence. Right now, world economic growth
is being suppressed by dollar deflation. Right now, the CRB Index is at 180. If the Fed were to increase total world dollar liquidity
enough to bring it up to 250 (its 10-year average) and keep it there, the problems Stiglitz decries would disappear.
Dirk Faegre Nov 10, 2019 I'm always surprised
when reading (most) economists take on the 2008 financial crisis. From this non-economists view it was shockingly simple and not
some complex, deep gray matter, academic, blah, blah, blah ...
For it to happen it took: Greed on Wall Street, idiocy in the housing market (to include mortgage brokers, retail banks, investment
houses, and the like) and a total collapse of the stated processes by rating agencies, along with a lapse of reason by The Fed
(Greenspan especially, who believed, in the face of the obvious, that banks would never, ever work against their own self interests
-- it took him years to apologize for his willful blindness), and the public who fell for the ponzie scheme of: "housing prices
will soar forever".
It was the perfect storm where almost all involved simply got stupid. Blazingly stupid. A reasonably wise 5th grader could
see and describe why it was going to blow up.
It seems to me Stiglitz got ahead of his skis with overly complex thinking here.
The argument that we can't raise wages so low level earners can make a livable wage is crazy. You want that people should work
hard to become homeless? That's as dumb as the housing crisis! If restaurants and convenience stores were to pay a living wage
the world economy would not collapse in a pile of rubble. They'd just have to raise prices. Full stop. What's so horrible about
that -- we've been doing it for centuries.
Sometimes the obvious is staring us right in the face!
Inflation you say? Tax the hell out of the filthy rich. No one should ever be allowed to become a billionaire - that's simply
a bridge too far and only brings negative value to society. No individual can supply anywhere near enough value to justify having
been paid a thousand millions (or, God forbid, multiples of that!!). Not even close. Check with the 5th grader again. She'll tell
you.
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Waleed Addas Nov 10, 2019 " We are all
Keynesians Now "! If the end (of neoliberalism) is near, then what should or will replace it? The article by of James K. Galbraith
"the new great transformation " may provide a hint (along with my modest comment, as usual :) Reply
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Jose M. R. Nov
10, 2019 Although I do not disagree completely I do see this debate as too western centric. Asia is faring very well, even Latam
despite political chaos. Maybe all that is happening to the West is historical decay: the End of the Roman Empire... Reply
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John Alexander Nov 10, 2019 'Even
in rich countries, ordinary citizens were told, "You can't pursue the policies you want" – whether adequate social protection,
decent wages, progressive taxation, or a well-regulated financial system – "because the country will lose competitiveness, jobs
will disappear, and you will suffer."'
Thomas Piketty has pointed out, and for all I know Prof. Stiglitz has also pointed out, a significant fact regarding the years
1930-1980: the top rate of income tax in the US was on average astronomical by today's standards, but the American economy was
humming very nicely. The idea that progressive taxation would result in all manner of catastrophe is just another of those baseless
dogmas that are perpetuated by rightwing thinkers, or, more accurately, by rightwing propagandists.
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Vincent Catalano Nov 10, 2019 Articulating
the problem is all well and good but not describing (or at least hinting at) the successor to Friedmanism/neoliberalism leaves
the reader no closer to the truth. The only way forward is an economic theory to replace Friedmanism/neoliberalism, not some broad
stroke statements like a rebirth of history. Economists need a justification to act based on a theory for it takes a theory to
beat a theory.
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Andrés Galia Nov 10, 2019 No you are
wrong. It does not take a theory to defeat another theory. It takes empirical evidence that the theory is wrong, and the empirical
evidence is in front of our eyes, unless you are not willing to see it. Reply
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G B Nov 10, 2019 Please go and read all the
related books written by J. Stiglitz and I'm sure you can find good answers for your questions... Reply
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jagjeet sinha Nov 9, 2019 NEOLIBARALISM
PLUS PLUS - CONFIDENCE IN DEMOCRACY
The end of Economics of/for/by The Elite is perhaps more appropriate title.
The Professor as usual hits the nail on its head.
The departures from Neoliberalism rightly reflecting in Democracy.
The Realignment of Economics demanded by The Marginalized Majority.
Both in The West and in The Emerging markets - where Democracy reigns.
The self correction that Neoliberalism ought to possess - was missing.
The Marginalized Majority had enough - Inequalities were bequeathed.
The Marginalized Majority was bypassed - and Democracy gave answers.
Brexit and Trump were inevitable - as were Modi and Macron.
Germany and China, Brussels and Beijing - emerged.
The Rebirth of History that Stiglitz foresees is Return to Enlightenment.
The Elites in America had met their match in Brussels and Beijing.
The Elites in America had found partners in London and Delhi.
Because Brussels and Beijing both never detached from The Church within.
Whereas London and Delhi were semi-detached from their Hinterlands.
Europe's reticence in accepting London over Brussels - rooted in The Church.
India's reticence in accepting its First Family in Delhi - rooted in The Heartlands.
Both Brussels and Beijing - rooted in The Heartlands within.
The Washington Consensus had alienated The Heartlands within.
The Anglosphere however was always underwritten by its Wealth Machine.
Democracy warranted Realignment of Economics within - for sustainability.
The return to Enlightenment that Stiglitz sees - is as inevitable as Brexit n Trump.
The sooner it happens - the better for The Anglosphere.
Having become the World's Economic Epicentre - demands nothing less.
Both Brussels and Beijing - are now being confronted by this Return.
The shape of The Return to Enlightenment - is a correction long overdue.
And Neoliberalism plus plus - is in fact reiterating confidence in Democracy.
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M Guiffre Nov
8, 2019 Professor: It seems that much of the U.S. population may not distinguish between the meaning of terms liberalism and elites.
I suspect this common misunderstanding is used to divide the population. Would you mind distinguishing between social liberalism
and economic liberalism? Would you mind distinguishing between intellectual elites and wealth elites? With respects.
vivek iyer Nov 7, 2019 Voters in emerging
markets- like India or Indonesia- have never heard of 'neo-liberalism' or even 'liberalism' come to that. Stiglitz must be utterly
mad if he really believes that the Bihari peasant votes on the basis of Wall Street's preferences!
Stiglitz writes- ' If a leading presidential candidate in an emerging market lost favor with Wall Street, the banks would pull
their money out of the country. Voters then faced a stark choice: Give in to Wall Street or face a severe financial crisis. It
was as if Wall Street had more political power than the country's citizens.'
I'm Indian. Unlike 99.99 percent of the Indian electorate, I know what Wall Street is. I also know that its preferences are irrelevant
for India. Dr. Manmohan Singh, whatever his other faults, knew this too. If American voters don't care what Wall St. thinks, why
does Stiglitz imagine it can have any power in 'emerging markets' where very few people know anything about it? What is the 'transmission
mechanism' he has in mind? Does he really believe
1) f.d.i is linked to market sentiment?
2) Voters take account of it?
There is no evidence for either view. The truth is f.d.i depends on structural and institutional factors. Short term jitters can
affect hot flows but only if there is structural balance sheet weakness.
Furthermore, in the one case where Stiglitz opposed 'neo-liberalism' with something more than an op-ed - i.e. Indonesia- he
was wrong. The IMF was right to squeeze Suharto and his kleptocrats out. Stiglitz very foolishly argued that the IMF ought to
prop up dictators in the pretense that this helped the poor.
Ordinary citizens everywhere, even in rich countries, know that 'adequate social protection' for every workshy loser and hordes
of bogus asylum seekers means high taxes and national insurance. Working for a living becomes a mug's game. Reagan got voters
to accept high unemployment because he was promising to cut taxes and squeeze the 'Welfare Queens'. Clinton did a U turn on gaining
office and went for 'Workfare'. He was also the 'deporter in chief'.
In rich and poor countries alike, elites did not promise 'neoliberal policies'. What they did was gas on about how we must
spend trillions fighting for democracy and human rights and the environment. Voters didn't want this because it meant higher taxes
and reduced public services. Germany, it is true, did adopt wage-restraint when other European countries were borrowing and spending
like drunken sailors- but that paid off big time! No doubt, the genius of Merkel turned this affluence into a curse. Her own native
East Germany is rife with discontent. But this has nothing to do with 'neo-liberalism' and everything to do with elitist virtue
signalling.
Elites don't talk about 'evidence-based research'. Their paid lackeys do it for them. Instead, elites pretend to be caring and
compassionate and committed to a new world order.
Stiglitz asks how wage restrain can lead to higher standards of living. The Harz reforms in Germany shows how- though of course
Merkel wasted much of the gain. Why ask for a 'rebirth of history' if you can't learn from the one we already have? What 'Enligtenment'
can be rekindled by recycling the same nonsense year after year? Rothbard's Law states that great economists specialize in what
they are worst at. They double down on their greatest follies. When will people stop pretending that ordinary people can be stirred
up against the bogeyman of 'neo-liberalism' rather than immigration or multi-culti or political correctness gone mad?
Read More Reply
G B Nov 10, 2019 With all due respect, Sir,
i think your post is, shall i say, long-winded with twists and turns, difficult to follow and hard to wrap one's head around...
I suggest you read all the related books written by J. Stiglitz and I'm sure you can better understand J. Stiglitz.
Read More Reply
vivek iyer Nov 10, 2019 To understand
an economist's theory it is not sufficient to read his books and articles. You have to be aware of criticisms and refutations
of his theses. You also need to do some empirical work of your own so as to determine how and why that economist has ended
up illustrating Rothbard's Law. In the case of Stiglitz, it is because he genuinely believes that there is a bias within
his profession. However, his profession is not influential. He himself is considered a virtue signaller and polemicist,
not a serious thinker.
Read More Reply
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JOSE GERARDO TRASLOSHEROS
HERNANDEZ Nov 6, 2019 Agree that elites should contribute significantly more to social justice everywhere and be less selfish.
This will help save democracy and open markets. China and many in the developing world did benefit greatly in the process pulling
hundreds of millions out of poverty.
Ariel Tejera Nov 6, 2019 I think there
is a bit more to add: Your honor, the notion that the global trade an finance monster can be tamed by mere nation states, is ...
surreal. And the tragedy is that, so far, the people´ s reaction consists on entrenching themselves, behind increasingly tribal
insularity (literally, Brexit).
If I were ultra-rich, I couldn't ask for more. Real.
Mirek Fatyga Nov 6, 2019 So, as neoliberalism
gets stripped of it's clothes, can we have a return of actual economic science to economic profession?
What is the effect of global resource constraints on attainable world growth, and how does the slow but steady rise of "developing"
countries affect the distribution of the standards of living in "developed" countries?
Please, a return to reality, instead of money games, whether neoliberalism or modern monetary theory (aka burst of inflation)?
Can we return to relity before wars begin? Prof Stiglitz?
john zac Nov 5, 2019 Yes, yes and yes, professor,
you got it right. But you didn't address the issue, or the degree of psychological damage this neoliberal world created. Which
stood as collateral damage in our war against truth. Where "what suits me/us was always favored to what suits you/them" The truth
has now sadly devolved to whatever suits the most powerful narcissist in the room and the rest, preferably outside the room,and
miles away, should not complain, watch Apple TV or Disney, or put headphones on and listen to Eminem, Allison Krause or even Jesus
loving Kanye
Also kindly. We not only take orders from Wall Street and those that have the money, but we also take orders from those that have
the guns.
I seriously doubt the nerds in Silicon Valley can continue to clumsily lead without any muscle and that muscle unfortunately comes
at a price--You must also allow them to create the stories they need in order to help create the world your math calls for. Which
comically dumbs down the narrative (Iran WMD, contras, etc) Anyway, this dangerous alliance of tech/money/guns serves as an imposing,
probably unbeatable force of a managing agent. As this engine manages to build superior narratives as an exhaust,making sure nothing
stands in its way. Professor Fukuyama, I'm sure is tossing and turning but I always thought of him as a man with ethics, so I
feel for him. I don't think he intended it this way.
Stephen Banicki Nov 5, 2019 Well said
and the near depression of 2008 proves that a market not properly regulated can result in a disaster. 2008 was a good example
where sub-prime lending went unregulated, corruption prevailed with the result being a near depression.
Raising the minimum wage, food stamps and other social programs are short term band aids to the real solutions of bringing
back free markets and significantly improving our ability to provide a good education to all Americans.
These social programs should be used to buy time so we can get things right. Getting things right is going to take a while;
at least a generation. There are no quick fixes. The President needs to be like Teddy. Teddy Roosevelt who busted up Standard
Oil and took on the railroads. Free markets help the consumer and worker. More competition keeps prices low and increases the
demand for labor which will raise wages. For that to happen Citizens United needs to be reversed.
The Supreme Court recently said that limiting what one can spend on elections goes against free speech. I say uncontrolled
spending by the rich on elections drowns out my right to voice my opinion. We were a nation based on the principle of one man,
one vote. Today we are a nation living by the motto one dollar, one vote. If you don't have lots of dollars too bad. Your vote
does not count for much. So I am in favor of raising the minimum wage as long as we will also address the longer term problems
of improving education and truly seeking free markets. Just like the vote, free markets have been bought. ... http://lstrn.us/1hkN2ll
Yoshimichi Moriyama Nov 5, 2019
We must not be deceived by economics theories; they are more often than not propaganda selfishly committed to protecting class
or group interests.
Excuse me for my senile nostalgia for the days at college. In my first year I had to attend two English classes and the reading
assignment for one of them was Henry S. Commager/The American Mind. "The most realistic of American economists, he (Veblen) never
failed to ask of the institutions which he examined: how do they work? This question he aske explicitly; it is relevant to add
that he asked only implicitly: how should they work?"
A friend of my wife's brought a lot of books a month ago, said his father had bought them and asked if I was interested in
any of them; she told me to dispose of the rest. The following is from Samuel Koenig/Sociology:An Introduction to the Science
of Society, published in 1964.
"The structure of economic institutions and the ideas upon which they are based are the primary concern of economics. Economic
institutions, however, do not have a separate, independent existence. They are part and parcel of the culture of a society, being
influenced by the other constituents of a culture and, in turn, influencing them. In other words, economic activities are inseparable
from social life and cannot be understood apart from it. Many economic activities are themselve social in character..."
Alongside respect for knowledge, knowledge of respect might be useful at some point, as it is often difficult to build a second
floor before the first floor is build. Reply
Yes, the US and the EU betrayed the Iran deal the moment the ink was on the page and Trump's
actions merely formalized an open betrayal. However, with respect to Russia and China's
intentions regarding Iran, I surmise that they have realised that a bifurcation of the world
economy into a US sphere and a non-US sphere is now unavoidable and they are playing the long
game. By allowing the US/EU to continue threaten and harass Iran, violating their own
agreement, they are in effect allowing the Europeans to slit their own throats with respect
to their trustworthiness and independence, after all why sign an agreement with the EU if
they fold like a wet tissue the moment the Americans change their minds. Whereas the Russians
and Chinese give iron-clad guarantees and are dependable allies.
Further, the Russians and Chinese are under no formal obligations to defend Iran's
interest (and both states have prior, though minor, issues with Iran), so I imagine they see
the American's actions as useful for indirectly pressuring the Iranians into more favorable
trade and security relations. That having been said, I imagine the Chinese and Russians have
jointly agreed to some non-negotiable redlines regarding US actions towards Iran that they
will allow. Namely, I think if the US were to attack Iran they would start funneling arms to
them immediately and turn a blind eye towards Iranian counter moves in the rest of the Middle
East. Though I'm curious as to b's opinion on this matter, what does he think the Russians
and Chinese would do if the US attacked Iran or were crazy enough to invade?
I imagine the Chinese and Russians have jointly agreed to some non-negotiable redlines
regarding US actions towards Iran that they will allow.
I agree with that...
I imagine they [Russia and China] see the American's actions as useful for indirectly
pressuring the Iranians into more favorable trade and security relations.
I don't see this at all...I don't think trade has anything to do with it...security only
indirectly...
I think Russia and China would like to see Iran move toward a more mature diplomacy, that
is more in alignment with the impeccably legalistic position of the two powers that are
shaping the emerging new order...
The overarching aim for the duo is to restore a functioning international legal
order, as embodied in the creation of the UN and its charter...as well as the supreme
authority of the Security Council...
This order was the outcome of WW2 in which both China and Russia suffered greatly...and
both are adamant about restoring a genuine legal order where outlaw states cannot thumb their
nose with impunity...
The key here is the Shanghai Cooperation Organization...which is clearly the most
important supranational 'club' in the world...and only getting stronger...
Iran has been in the SCO 'waiting room' for a long time now...even Turkey will likely get
in sooner...
A couple of reasons for that, and it has to do with Iran's politics...
First, Iran is a theocracy at bottom...the state embodies many desirable aspects of
socialism in its functioning, but it also views itself as the 'defender' of world
Islam...anywhere, anytime...
This is not up to par to the diplomacy practiced by the likes of Putin and Xi...
For instance, the Iranians were quick to jump into the manufactured 'Rohingya crisis' in
Burma...which is clearly an agitation project designed to put a stick in the spokes of the
BRI...
China was surely irritated...
For Russia, another irritant coming from Iran is its maximalist approach to Israel...we
note that a large population of Israel is Russian-speaking...
Israel does have the right to exist in its pre-1967 borders, as established by UNSC 242
and other subsequent resolutions...[it must also withdraw unconditionally from those occupied
territories as per those resolutions, but, with the US backing, is ignoring international
law]...
So Iran is not quite up to par diplomatically as far as the two big powers shaping the new
world order are concerned...
However...I do not think that either Russia or China would try to exploit the pressure
on Iran by steering it towards the path they would like...I don't think they would make such
a linkage, as this itself is bad diplomacy...
The bottom line is that there is probably zero desire on either Russia or China's part to
exploit Iran's situation...this is not how these two powers operate...
"... From the 1950s, the anti-Soviet fervor of these New York City-based intellectuals prompted support for the early United States intervention in Vietnam. In the 1970s, the Socialist Party split up as some factions aligned with the New Left. The neocons formed the Social Democrats USA (SDUSA), only later abandoning their socialist party-building in favor of penetrating both the Democratic and Republican parties. In the 1970s, Senators Daniel Patrick Moynihan, Henry "Scoop" Jackson and Representative William Hughes hired some leading second-generation neocons as foreign policy staffers, beginning a long, steady penetration of key Congressional committees. ..."
"... Does the permanent warfare of today's neocons differ in any real way from the Trotsky idea of permanent world revolution? Socialism has been replaced by democracy-promotion but that difference is small, particularly as the consequences continue to play out on the world stage. ..."
"... Antonio Gramsci quote" Trotskyist are the whores of the fascists". Globalist are modern day or post modern Trotskyist ..."
As the happy marriage of neoconservatives and Obama-era humanitarian interventionists continues to flourish in defense of American
permanent war deployments around the globe, it is a worthwhile moment to recall the roots of the neocons in the old left of the 1930s.
Neocon founders like Irving Kristol, Norman Podhoretz, Max Schachtman, Seymour Martin Lipset, Irving Howe, Nathan Glazer, and Gertrude
Himmelfarb were all anti-Soviet socialists from the 1930s, many of whom were followers of Leon Trotsky. Trotsky broke with Stalin
in the late 1930s over his emphasis on permanent world socialist revolution, as Stalin concentrated on the consolidation of "socialist
in one country"--the USSR.
From the 1950s, the anti-Soviet fervor of these New York City-based intellectuals prompted support for the early United States
intervention in Vietnam. In the 1970s, the Socialist Party split up as some factions aligned with the New Left. The neocons formed
the Social Democrats USA (SDUSA), only later abandoning their socialist party-building in favor of penetrating both the Democratic
and Republican parties. In the 1970s, Senators Daniel Patrick Moynihan, Henry "Scoop" Jackson and Representative William Hughes hired
some leading second-generation neocons as foreign policy staffers, beginning a long, steady penetration of key Congressional committees.
At the Gerald Ford White House, successive chiefs of staff Donald Rumsfeld and Dick Cheney organized a series of "intellectual
seminars" by Irving Kristol, further spreading neocon ideology within the foreign policy establishment. As Defense Secretary and
later as Vice President, Cheney continued to promote neocons to key posts and to advocate for neocon permanent warfare.
Early in the 1980s President Ronald Reagan launched "Project Democracy," to spread democracy around the globe through well-funded
programs including the National Endowment for Democracy, led by Carl Gershman, who has headed the NED since its founding in 1984
through to the present. Gershman was previously Executive Director of Social Democrats USA. NED has been a stronghold of neocons
from its inception.
While the anti-Soviet outlook of the neocons continued even after the Berlin Wall and the fall of Soviet communism, the focus
increasingly was on permanent warfare to promote democracy around the globe.
Does the permanent warfare of today's neocons differ in any real way from the Trotsky idea of permanent world revolution? Socialism
has been replaced by democracy-promotion but that difference is small, particularly as the consequences continue to play out on the
world stage.
"Does the permanent warfare of today's neocons differ in any real way from the Trotsky idea of permanent world revolution? Socialism
has been replaced by democracy-promotion but that difference is small, particularly as the consequences continue to play out on
the world stage."
I don't think the Democracy bit is much more than a fig leaf, it can quickly be discarded if votes do not
go as required. The aim seems to have more to do with removing unfriendly regimes and replacing them with compliant ones. It does
not work because the people/'voters' do not like the imposed elites and are inclined to vote by tribe/clan/religion, rather than
any western concept of party, the biggest block wins and lords it over the minority.
Irving was quite a character. A socialist who's eyes were not totally closed to the um, "contradictions" and stagnation inherent
in socialist economies. He spun his wheels mightily in the pages of Dissent trying to reconcile his socialist ideals with it's
fundamental conflict with human nature.
Ok, thus the essence of neoconism is Trotzkism and not Straussianism?
In other words, concerning the neoconservatives it makes no sense to look at the (Leo) Straussian angle? Arbitarily?
Now, considering their (not so prominent???) part in the US Culture War (still ongoing???) I am admittedly puzzled. If they
were leaning towards Strauss at one point in time, they may well have shifted from revolutionaries to counterevolutionaries at
one point in time. No?
They never did? They weren't impressed by their heroes death, but carried his legacy on? Nevertheless?
Actually, this is a recasting of the old Muslim idea of Dar al Salam and Dar al Harb. Western Diocletian states embodying the
House of Peace while the rest of mankind lives in the House of War. For Muslims, the idea was to bring the benefits of Islam to
non-Muslims. Here, it is to bring the benefits of Civilization to the barbarian hordes.
Fundamentally, neocon and their fellow travellers - an assortment of Protestants, Jews, Nihilists, Democrats, and Shoah Cultists
- are waging a relugious war that has failed and will fail against the particularities of mankind. Just like Islam failed to destroy
either Christianity or Hinduism, this Western errand will fail too.
I think these people are the type, subset pseudointellectuals, that just enjoy power and using it to stir the pot of humanity
for self-glorification.
IMO, they really believe in nothing else. They are, by nature, miserable craven control freaks that justify their activities
by hijacking whatever ideology is floating around in the zeitgeist that the dupes will follow; could be Islam, could be Christianity,
could be democracy, could be socialism. Makes no difference to them as long as they get to experience themselves as superior masters
of the world.
In Libya, in 2011, Democracy-promoters destroyed her so that Sarkozy and others in France, Spain, Italy, UK could steal her
wealth; reminiscent of Muslim invasions of India in search of war booty, rapine, and slaves, in the name of Islam.
So? This review of (important) history gives us no insight into why it happened or why we should care today. Yes, I agree that
these were bad people in the 1930s and they remained bad people when they moved (in theory) from the left wing to the right wing.
But that is all you have said. What were the motives? How was it done? Why were they able to find acceptance in both parties with
such a lousy history? How are they able to continue being accepted after such a lousy continuing history.
This account is all ad hominem, all about how a certain strain of ideologue has consistently advocated for policies of world-wide
control. The logical back story would be a Trotskyite coordinating presence, something I don't for a minute believe. Yet people
of this description are undeniably pervasive in the councils of state.
So what is the connection between advocates of US dominion and former advocates of world wide revolution? And, if it is just
a matter of attitudes toward power, why should we care? So some people 70 years ago (bad people, admittedly) had an influence
of some people today (also in my mind bad people). So? Were they the only people from that era who held such attitudes? Could
we not just as easily trace other genealogies for ideas of US domination? Do such ideas ever in history fail to materialize when
the power balances enable them?
So you don't like these people and you don't like where you think they came from. But do you have anything to say about why
they are so pervasive and what could be done about it?
Ah, the good old days. In the early 80's I would stop after work at the local newsstand and pick up Commentary, Dissent, Partisan
Review, National Interest, and so on. Whatever struck my fancy and for some reason, these did even though their circulation was
quite small. At the time I didn't not realize their commonality which came to me later in the 80's. The PBS movie/book, "Arguing
the World," which came out about 20 years ago, has a lot of the backstory.
A common thread is the desire to change the world though they had different views of what that "change" should be.
As for me, I was an accidental entrepreneur and generally liked Hayek's economic views. I'm also highly skeptical of idealist
and messianic movements like Mao's which the 60's had been rife with. But I loved readings all these rags with somewhat different
perspectives but a common thread that each seemed to think their "Truth" should rule. Seems to me the greatest evil gets perpetrated
by those that think they have found "The Way."
How much of neoconservatism cum liberal internationalism (foreign policy idealism aka Wilsonianism) is "spreading freedom and
democracy" and now much is neoliberal globalization as "making the world safe for capitalism"?
In either case the end in view is a Pax Americana where the US has permanent global dominance in accordance with the Wolfowitz
doctrine of not permitting a challenger to arise as a competitor.
If you go no further than Marxism, you will not understand what is happening. But to go further is to engage in thoughtcrime.
Fortunately, the Catholic scholar E. Michael Jones has written a great book on this. It is called The Jewish Revolutionary
Spirit: And Its Impact on World History. Incredibly, it has not been banned from Amazon yet. It is exhaustive, encyclopedic and
documented.
Jones has developed a following among young Catholics appalled at both the corruption in Rome and the corruption in American
society. These kids are the ones digging conservatism's grave, not the left. The left needs Conservative Inc to plays its role
and keep the show going for the benefit of older people who get all their information from television.
It has not been covered much by the media but TPUSA, a Trump-aligned youth organization, has been battered by audience after
audience on its recent campus tour. Yesterday in Los Angeles Donald Trump Jr was booed off the stage as he tried to promote his
latest book.
At first, TPUSA tried to blame campus leftwingers. This was an obvious lie, and so they began to call the audience Nazis. Then,
they accused them of being virgins. They tried to vet and plant questioners but when this failed they eliminated the Q&A altogether.
A similar episode happened the week before when Sebastian Gorka stupidly took on a 20 year-old Youtube personality with an audience
ten times larger than his own.
Post-WW2 Conservatives failed because they never understood what they were fighting, failed to wage culture war, and fooled
themselves into thinking that the fall of the Berlin Wall meant the end of struggle, when it only meant a change of theater.
"...appeared to have fallen from a balcony." I somehow doubt that.
"The NGO's funders currently include the British and German governments. The Trump administration froze US funding, which made
up about one-third of the total, without public explanation in early 2018, but resumed giving financial aid last month amid criticism
of its decision to withdraw US troops from north-eastern Syria."
I bet that pissed off the neocons to no end. He should stop it again. We can use the money at home.
"Does the permanent warfare of today's neocons differ in any real way from the Trotsky idea of permanent world revolution?"
Yes, profoundly. For starters, Permanent Revolution and world revolution were two separate Trotskyist doctrines.
Permanent Revolution was a doctrine eschewing the mainstream social-democratic strategy of supporting bourgeois-democratic revolutions
until the proletariat gained sufficient strength to gain state power. Trotsky contended that socialist - capitalist alliances
were inherently unstable and that bourgeois-democratic forces would inevitably align with the existing ruling order against the
proletariat. World revolution was a doctrine that a socialist revolution in Russia could not survive in isolation and revolutions
had to take place in more advanced countries, particularly Germany. That was given a messianic veneer of "proletarian internationalism"
and "world revolution." Such maximalism was opposed to realist expedients such as the New Economic Policy and the Rapallo Treaty
of 1924 that fostered economic relations between the Soviet Union and capitalist Germany.
Revolutionary movements have always drawn opportunists who saw them mainly as a shortcut to gaining power for themselves. The
ur-neocons were such a group. Their loyalty to Trotskyist ideology only lasted as long as they saw it as something that could
boost them into power. When better means in various apparatuses of US power presented themselves, they latched onto them under
the guise of "spreading democracy." That seems a cynical formulation, since the most consistent neocon ideological theme is that
the great unwashed masses are not to be trusted, so power must be arrogated to themselves.
"... the most consistent neocon ideological theme is that the great unwashed masses are not to be trusted, so power must be arrogated
to themselves." Isn't that the real ideology of all these factions? To my mind the rest is all just tactics.
I am genuinely unsure what the real distinctions are. The present American "conservative" idolizing of democracy and free market
economics seems about as sincere as the Communist ideal of economic control by the working classes. Many years ago I argued with
a (captured) VC political officer that the Vietnam war was just a fight between two elites over who would get to run things. He
was appalled by the idea. His claim to the moral high ground was based on two factors: the personal honesty of the Viet Cong cadre
and the party discipline that that guaranteed it. These seemed plausible at the time. Both went up in smoke almost as soon as
the victory had been won.
How different were the results of the war from those to be expected from a Southern victory? I haven't followed the subsequent
history in detail, but American Vietnamese acquaintances tell me that 40 years later everything is being run by Southerners. Not
identically the same Southerners, but ... And does anyone believe that a southern government securely established would not have
set about expelling the Chinese population that had accumulated during the years when the Vietnamese could not control their own
borders? (American media never said much about it, but the boat people were overwhelmingly Chinese victims of longstanding hatreds.)
So how different is the neocon vision from a Trotskyist vision in a world where direct control is no longer possible?
The dots I have yet to connect are those that trace the path by which the neoconservatives wandered from their socialist roots
to become the enforcers of the Western world's fundamentalist neoliberal ideology of political economy. How many of the dots pertaining
to the latter came to be embedded in the western industrialized world and most of the Global South were tied together for me by
the recent book Globalists: The End of Empire and the Birth of Neoliberalism , by Quinn Slobodian. Several points jump
from the author's narrative. The neoliberal movement traces its origins to two citizens of the Austrian Empire who came of age
in the decades immediately before its collapse: Ludwig von Mises* (b 1881) and Frederick Hayek (b 1899). Both were of un-landed
noble families that had been promoted to that status just a generation or two before. Slobodian argues that the Empire's uniqueness
as a multi-cultural, multi-national entity held together by a common market with no internal tariffs and free migration within
the empire led them (and especially Hayek) to envision a similarly structured world economy. They and their disciples and successors
saw the making of that structure happen as their lives' work. The goal remained constant but the means of achieving it changed
with the times. First they saw the League of Nations as the potential vehicle until its collapse during the Second World War.
Next was the United Nation until it was "overrun" by new nations emerging from colonialism. The goal was largely achieved in the
late 20th century when General Agreement on Tariffs and Trade (GATT) morphed into the World Trade Organization (WTO) in 1994.
The most salient features of a neoliberal political economy are: free movement and safety of capital and protections for the ownership
rights of investors across borders; free migration of people across those same borders; also tariff-free trade among countries;
and the removal of economic policies and relationships from the purviews of sovereign countries and subordinate jurisdictions
within them.
Slobodian elaborates how as the neoliberal ideology became embedded in the world economy during the 20th century it was believed
by the movers and shakers (mostly implicitly but in some cases explicitly) that the lagging development status of the peoples
of the recently decolonized emerging countries were the results of racial and/or cultural weaknesses. There was little recognition
of the impacts of the cultural carnage and wealth extraction that were part and parcel of colonial enterprise. As a result, as
the institutions of radical neoliberalism took shape they consigned a secondary economic status to the countries of what is now
known as the Global South. The USA has been the leader in putting this ideology in place and has been aggressively looking out
for its own interests in the process, which is understandable.* However an unintended consequence has been an economically lagging
global south that has been prevented from industrializing enough to employ the millions of people whose farms have become uncompetitive
with highly industrialized USA and European agribusiness. These folks move off the land either to the growing megacities of the
Global South or, increasingly, into countries of the Global North by means either legal or illegal. Thus the Democratic Party
establishment's Kumbaya on immigration is not all sweetness, light and harmony. They're also doing the bidding of their neoliberal
masters.
Quote: "A recent Global Times editorial ( .. ) the West was incapable of seeing and thus
appreciating the critical role of the Communist Party of China in directing China's success
since Western dogma says government's incapable of being dynamic or innovative -- that only
the private sector is capable of being that and doing so. And thanks to the teaching of the
false Neoliberal doctrine as truth in schools and universities, Western governments and their
publics will continue to do the wrong thing by following a false path.." -- karlof1 @ 60
Quote: "If you read many who come and comment at MoA that supposedly are "educated" you
will notice that they continue to think and write in terms of the conflict being between
socialism and capitalism (...) China is 80% capitalistic as are other "socialistic" countries
but what matters is what part of the social economy is socialism versus capitalism." --
psychohistorian @ 72
Even long-ago groups (1) set aside 'capital to invest' in the shape of making tools
(costly in materials, expertise, time ), keeping seeds (ditto), training children/youth to
hunt, build shelter, give warnings, etc. Accumulating one good or another for a reserve store
in slim times, for transformation at a later date - commodities - (reeds,coverings, etc.) or
for favorable exchange, or even for coercion. By necessity, all such societies were
socialistic, in the sense that sharing and re-distribution played a vital part, without which
all would have collapsed.
Rent seeking or monopolisitic capture existed in the sense of a powerful ppl claiming a
stipend (rake-off?), leaders lived better / had more wives / more space / whatever because of
decisionary power, status, built on 'skill' or 'success' or 'x', perhaps merely dynastic,
(small tribe), or, later, because of supervision and control posts that were needed to enable
larger societies to function (Priest administration which regulated stores, exchanges,
contracts - Sumeria), often resting on an over-arching narrative like a religious one. Here
too socialism was at the core: without re-distribution to the poor, perhaps for their work,
care offered to women and children, and regular debt forgiveness (formalised in Sumeria but
existing before of course, in the 'buddy no prob' style) the society would have broken
down.
Capitalism and socialism are modern terms (18th, 19th? cent.) and are strands that exist
in all human and maybe even some animal groups. Meme key-words (i.e. not needed when
analysing how one society functions, any will be both in part) that serve today as a rallying
cry:
"Sorry...but the conflict is between socialism and capitalism...between the rich and the
working masses, especially those who work and still they remain poor....as has always
been....who says otherwise is only trying to fool the masses " Sasha 76.
Yes, a class struggle between the working 'poor' and rentier domineering 'rich' is boiling
over now.
Noirette...thanks for an interesting and informative comment...
Also for calling attention to Karlof's comment at 60...
Utilization of the Entrepreneurial aspects of Capitalism that provide for dynamicism and
innovation works as long as they're employed for the public's benefit...
This idea of the supposed 'innovation' inherent in 'entrepreneurial capitalism' is
another one of those myths that are just taken for granted and assumed to be true...
It's not quite like that...if we think of innovation as being specific to
advancements in science and technology [as opposed to say process innovation in social
organization or resource management etc]...then this idea is certainly false...
The advancement of science rests on education...it's as simple as that...the more
resources you devote to building up an academic and scientific infrastructure, the more
scientific innovations will be forthcoming...
The alleged 'dynamicism' of private enterprise is failing miserably in this regard...the
prime example being America's increasing lag in the most scientifically demanding endeavors,
like spaceflight and advanced armaments...both of which are completely privatized...
It was only during the 1960s Apollo program where an intensive top-down government effort
yielded impressive progress...that successful strategy was then promptly abandoned and
top-flight science handed off to the profit-seeking private sector...with disastrous
consequences...
Today, the US has been dependent on political rival Russia for human spaceflight for
nearly a decade...as well as rocket engines for its critical national security rocket
launches...[which it cannot manufacture itself]...
The gap in advanced armaments technology is just as startling...with Russia clearly
opening a large lead in groundbreaking hypersonic technologies, scramjet engines etc...
For those who have had an inside view of the aerospace industry over the last decades, the
gap in technical capability is truly startling...for instance, there would be no ISS if not
for the Russian Mir space station technology on which the ISS is based...
When looking at why this state of affairs has come to be, it is helpful to have again an
inside perspective on the absolutely huge academic and scientific infrastructure that was
built up during the Soviet era...
In the meantime, the capitalist US is not the least concerned with building up such a
national science capability...this is obvious...recent figures on STEM
graduates...
We note that China produces nearly 10 times as many as the US, with only four times the
population...Russia with half the US population produces as many...
We note that even Iran, with one quarter the US population [but with a decidedly socialist
system] is near the US in both categories...
The US is becoming a third-rate power in science and technology...[and no iphones and
other consumer gizmos don't really count for anything]...
The simple fact is that in order to truly innovate, you need to have a PLAN...crony
capitalism like the US defense industry, or the privatization of space technology are really
producing diddly squat...
Thanks to all posters. The information about Bolivia is sobering but very helpful. I was
struck also by karlof1's repost of his email to psychohistorian @ 60:
"...What the Chinese are doing as you noted is keeping the primary sink of Capital under
public auspices such that all major public supporting infrastructures are publicly owned and
operated. Even the Communist Party of China is publicly owned--which is what political
parties within the West ought to be so they can't be captured like the P and R-parties to
work against the public interest..."
So, I was thinking what does it mean in the US to have a publicly owned political party -
something like publicly owned businesses? Only small donations permitted to the party
coffers? Sort of like unions are structured? That seems a possible and interesting
development. This country ought to be able to attempt this.
We might say the Green Party tries, but maybe the FDR model isn't the appropriate one to
this day and age. I don't think younger folk (then me) are 'turned on' by FDR since the
generational link is broken. And maybe too they are not turned on by 'isms' either.
I like the last words of your quote above, karlof1 - maybe a "Public Interest Party", PIP
for short? I wish Grieved was posting, hope he/she is in good health. The input on China from
Grieved's research in depth has been very helpful.
Public interest is very far reaching, and takes in models from Russia and China to
Venezuela and Bolivia, with Syria and Ukraine right there in the mix as well. It's a far
reaching concept that rises above the 'ism's'.
flankerbandit @136 points out that capitalist entrepreneurial innovation is a farce,
but I would like to add some points.
Lots of really cool tech was developed in the US after WWII and up to the early 1980s.
Much of this came from giant corporate research institutes (think Bell Labs, Palo Alto
Research Center, IBM's Watson Works, etc). From the mid-1980s to the present these incredibly
productive research institutes have all but vanished. The remnants of what remains of those
corporate labs certainly don't produce very much of interest anymore.
Why did capitalism create these labs, and what happened to cause their decline?
The research institutes came into existence because AT&T used to be a monopoly.
Americans didn't have so much of a "business friendly" fetish back in the 1950s as
they do now. As a result they were extremely suspicious of and hostile to AT&T for
being a monopoly. Of course, it made sense to have a unified communications network across
the nation, so AT&T as a monopoly could provide better service than dozens of smaller
competing businesses. The capitalist propaganda against nationalization was intense, so the
public settled for hardcore regulation of the monopoly instead. Part of this regulation was a
requirement that AT&T spend a hefty chunk of their revenue on research and
development.
The problem, from a capitalist perspective, was that the amount mandated be spent on
R&D by the regulations was far more than AT&T management could come up with
profit-bearing lines of research for. As a consequence they hired scientists and set them up
in laboratories just to consume the required number of dollars. This is to say that as a
result of heavy regulations AT&T began to pour money into pure research rather
than the applied type of research that can be justified to bean counters. This resulted in
mountains of science, much of which remains lost in old filing cabinets to this day.
Those who like to meta-study science itself will tell you that most pure research doesn't
really yield anything worthwhile. At the same time, most of the really big advances come from
pure research. The successes of this pure research led AT&T to branch out into a wide
range of technologies beyond just telephones and telegraphs. This began to be a business
threat to other big players in the tech industries like IBM, who then had to set up their own
huge freewheeling research institutes in order to remain competitive. Due solely to AT&T
being forced by the government to setting up extensive research labs, many other businesses
across a multitude of sectors of the economy were likewise forced to heavily invest in
R&D.
Of course, AT&T would rather have just given that money spent on R&D to their
investors, so they lobbied to have the regulations removed. By the end of the 1970s the
American public had been successfully brainwashed by capitalist mass media into feeling a
need for "business-friendly" government, and deregulation was the order of the day
(thank you Jimmy Carter for starting that!). Even as such, people of that time were not ready
for an unregulated monopoly to control telecommunications, so AT&T was broken up into
smaller units that could focus on just making the biggest profit possible. The "Baby
Bells" rode on the momentum of their former success, neglecting research and running
their infrastructure into the ground. America then went from having the best communications
infrastructure in the world, literally decades ahead of everyone else on the planet, to
barely staying above third world status.
With Bell Labs reduced to a joke, there was no longer a justification for others like IBM
and Xerox to keep spending on pure research themselves. Pure research was rationalized away.
That said, what is referred to as "pre-market" research is still done today, even if
not in the giant corporate research institutes. This is now done in universities on the
public dime. The "innovative entrepreneurial capitalist enterprises" circle the
college campuses like vultures waiting for students and faculty to develop something they can
make money off of and when they see it they swoop in and snatch it away for a tiny fragment
of its cost and value.
The point here is that AT&T was so micromanaged by government regulators that it
should have just been directly managed by those regulators. AT&T should have been
nationalized rather than broken up. Capitalism had nothing whatsoever to do with
AT&T's prodigious technological productivity. That "innovation" was 100% the
result of government "interference" in the Market. Most of the heavy lifting for
innovation today comes from "pre-market" research at universities and is funded by the
public. Very little fundamental innovation in the world today is financed by private
investors.
The take-away? You don't need capitalism for innovation. On the contrary, capitalism
interferes with and holds back innovation.
Thanks for a very good case study...yes, for all intents and purposes AT&T might just
as well be labeled under 'state owned enterprise' at the time...
And that was another era...I will add here that the 'golden' three decades or so after the
war, life in the US for ordinary folks really was pretty good...
The shop floor worker took home a decent pay on which a family could live nicely without a
second income...own a nice home and send the kids to college...most of the manufacturing jobs
were considered 'semi-skilled' labor, but were in fact quite skilled by today's
standards...
The company president took home maybe ten times that of the shop floor worker...the
financialization of everything that wasn't nailed down had not yet even started...
I went to college in Michigan [quite far from home] in the 1980s and knew family friends
there...the elder patriarch had worked at GM, starting as just a guy on the line, but moved
up to foreman and was an incredible source of technical knowledge about manufacturing...the
house they retired in, in Grosse Pointe was nothing to sneeze at...
This kind of fair deal and upward mobility for the ordinary worker is long gone now...with
temp jobs, no benefits and working in an Amazon warehouse for 11 bucks an hour
[under sweatshop conditions literally]...
Of course this doesn't stop the government from showering King Bezos with billions of our
tax dollars to come up with some grifter scheme involving supposed rocket engines and
spacecraft...
So yes, those were much different times...and yes, capitalism does not lead to
innovation...
perceived influence over US health care of chief executives of health systems is
increasing. To the extent that the ranking validly reflects influence, the sharp rise in the
influence of chief executive officers at the expense of representatives of patients or health
professionals may underscore the increasing industrialization of health care. It is not
possible to find patients, patient advocates, clinicians, or clinician advocates at the top
of this list . This trend placing health care influencers within C-suites, accountable to
boards mostly comprising other corporate leaders, may explain the rise of business
language and thinking
They suggested that it is possible that there is a
causal association between the concentration of executive influence and problems of
patient care derived from efforts to optimize operational efficiency and financial
performance, for example, clinician burnout , the heavy burden of treatment afflicting
patients with chronic conditions, and the erection of barriers to care to optimize
'payer mix.'
Dr Montori also said in the interview
Americans increasingly find themselves in a corporate-centric healthcare
echo-chamber , one in which the public will increasingly approach tough policy decisions
having heard only the viewpoint from the top.
'The primary goals of CEOs are to advance the mission of their organization,' Montori
says. 'If all that influences healthcare are the ideas of people who advocate for the success
of their organizations, people who are not served by them will not have their voices
heard.'
Furthermore, he suggested that the public may be befuddled by the current health policy
debates, including those about universal health care and the possibility of reducing the power
of commercial health insurance companies because
in the rest of the narrative all that they hear is about are the successes of biotech, the
successes of tech companies, and the successes of healthcare corporations who achieve high
levels of innovation thanks to the bold leadership of their executives. It's why we have been
calling for greater awareness of the industrialization of healthcare for some time now
Summary
The new study by Longman, Ponce, Alvarez-Villalobos and Montori adds to the evidence that
health care has been taken over by business-trained managers, and in the US, especially by
large commercial health care organizations run by such managers.
Since we started Health Care
Renewal , we have frequently discussed the rise of generic managers, which later we
realized has been called managerialism. Managerialism is the belief
that trained managers are better leaders of health care, and every other sort of organization,
than are than people familiar with the particulars of the organizations' work. Managerialism
has become an ascendant value in health care over the last 30 years. The majority of hospital
CEOs are now management trained, but lacking in experience and training in medicine, direct
health care, biomedical science, or public health. And managerialism is now ascendant in the US
government. Our president, and many of his top-level appointees, are former business managers
without political experience or government experience.
We noted an
important article in the June, 2015 issue of the Medical Journal of Australia(1) that made
these points:
– businesses of all types are now largely run by generic managers, trained in
management but not necessarily knowledgeable about the details of the particular firm's
business
– this change was motivated by neoliberalism (also known as
economism
or market
fundamentalism )
– managerialism now affects all kinds of organizations, including health care,
educational and scientific organizations
– managerialism makes short-term revenue the first priority of all organizations
– managerialism undermines the health care mission and the values of health care
professionals
Generic or managerialist
managers by definition do not know much about health care, or about biomedical science,
medicine, or public health. They are prototypical ill-informed
leadership , and hence may blunder into actual incompetence. They are trained that they
have a right to lead any sort of organization, which breeds arrogance. These managers are not
taught about the values of health care professionals. Worse, they are taught in their business
style training about the shareholder value dogma, which states that the main objective of any
organization is to increase revenue. Thus, they often end up hostile to the
fundamental mission of health care, to put care of the patient and the health of the
population ahead of all other concerns, which we have called mission-hostile management.
(Furthermore, it appears that the shareholder value dogma is just smokescreen to cover the real
goal of managers, increasing their own wealth, e.g., look
here .) Finally, arrogance and worship of revenue allows self-interested and conflicted,
and even sometimes corrupt leadership.
Managerialists may be convinced that they are working for the greater good. However, I am
convinced that our health care system would be a lot less dysfunctional if it were led by
people who actually know something about biomedical science, health care, and public health,
and who understand and uphold the values of health care and public health professionals –
even if that would cost a lot of very well paid managerialists their jobs.
Maybe someday the top "influencers" in health care will actually be people who know
something about health care and actually care about patients' and the public's health.
John Raulston Saul, in "Voltaire's Bastards", has produced an intellectual fireworks
display that deals directly with the problem Dr.Poses sees pretty clearly. Endhoven proposes
an attack on what he sees as a regressive medieval remnant, a Guild, an attack that has been
pretty successful in a broad swath of our neoliberal world. Saul would recognize that attack
immediately, and despise it. It's what he wrote about with such fiery contempt.. And in my
opinion, he's right.
Managerialists, purveyors of "reason", are leaving a trail of disaster in pretty much every
area where their influence is powerful. Their ivy league, MBA-dominated education seemingly
has failed to provide any sense of the human feelings and needs that must be an essential
part of successful planning or policy. The bottom line trumps all else, and generates
disaster as well as shareholder value. Treat yourself, as well as tantalize your wits. Read
it.
Thanks for this post.
Two quotes that sum up much of the overpriced disfunction, imo.
Managerialism is the belief that trained managers are better leaders of health care,
and every other sort of organization, than are than people familiar with the particulars of
the organizations' work.
Better leaders toward what goal?
– managerialism makes short-term revenue the first priority of all
organizations
managerialism makes short-term revenue the first priority of all organizations
Except when it comes to manufacturing ideologies. There, they are quite capable of taking
the long view with think tanks, generational influence (stacking) of the judical system,
education, politics and policy and so on.* It's not as if they are unaware of the concept of
laying foundations. But short term revenue seems to be tightly coupled in their view to what
they get to put in their pockets which in turn (perhaps ironically by the foundation
builders: self worth by comparative metrics) has been tightly coupled to their perceived
worth as human beings.
(Ultimately, I believe, the phenomenon of comparative metrics
literally projects the homeless -or in this case the paucity of care for whole segments of
society- into existence and maintains their numbers in relation to those of the "managers.")
Interestingly, the mix of origins, whether such seminal ideas ( "eat your vegetables,
think of the starving Chineese" ) are vernacular and borrowed and repurposed or canonical
and disseminated helps in no small part to obscure the process.
*Even if the managers are not always the drivers, they are aware of the value.
More directly on topic, the difficulties in defining neoliberalism usefully I think come
from 1) an incoherent political spectrum centered on overly specific policies which will vary
according to time and place and the vicissitudes of world economy and war, rather than on class
2) the lack of a sound analysis of what bourgeois democracy is 3) an economic analysis that
omits economic history, leaving most of the discussion decontextualized.
1) Basically, the liberal state, the neoliberal state and a host of other variants share the
view of freedom as the right to buy what you can afford, to sell what you own and to do
whatever you want in the meantime. It is a vision centered on property as the essence of
humanity. See Benjamin Constant. And this is true even for people who try to imagine a
non-market sphere for other aspects of life. The most common form today is perhaps the notion
of the family as a private haven, the center of civil (as opposed to political) society. But
nobody escapes reality, this is purely ideological, an illusionary escape from class society.
The more the family is a private haven, the more it is a private prison.
The problem with placing neoliberalism on a spectrum is that practically everyone whose
opinion would be accepted as legitimate for expression, fundamentally shares this vision.
Disagreements about the inevitable lapses from the ideal are inevitable, but will change. In
the earliest days of capitalism, expropriating Church lands was liberalism, even if the Wars of
Religion, the Dutch revolution and the English reformation are conveniently omitted as
essential. A continental power like France or Russia needed more intervention in its economy to
create a military than England or Japan. The superficial differences confuse how much overlap
there is between neoliberalism and every other acceptable school.
2) Possession of property of course puts people in different places in social life.
Neoliberalism and the old liberalism alike held that freedom and justice were a balance of
classes, that the state would maintain. How interventionist the state must be, again would
vary. But the legitimacy of any intervention is held to be based not just on whether it was
meant to maintain the proper balance of classes, but upon whether it was done with
consent.
Today the usual phrase is the rule of law. But this is a claim the means justify the
ends, which is moral imbecility. Unjust laws do not make for justice.
The real justification for the rule of law is as an ends in itself, as social order no
matter what, where class freedoms are safe. The overlap between this commitment from
neoliberalism and other arrangements should be obvious, not confusing, but it is what is is.
Democracy is about equality of money. In political terms, the spectrum of capitalist forms of
the political regime, runs from the libertarian/neoliberal ideal on the left (there is a reason
libertarians reprint Constant and Mill, even Sidney!) to fascism on the right.
Fascism is an essential alternative weapon in the greater struggle, where individuals
sacrifice for the power of the nation, which means the ruling classes of the nation, in
substance though not in person. The tolerable version of social democracy lie somewhere in the
center, putting class collaboration and corporate freedom above the purest visions of freedom,
which would be preposterous universe of small business owners and farmers and professionals.
But the notion democracy means human rights is purely ideological, refuted by history. It means
citizen rights, because, the rules are all.
3) The novel issues that provoked the emergence of a neoliberalism distinct from the other
political philosophies are as much a product of economic history (change!) as the disappearance
Court vs. Country as the axis of politics in England. I suggest that, while Slobodian may be
correct that the loss of empire was hugely important to a group who devised some justifications
for neoliberalism, in practice, the decline, then disappearance of the gold standard, the
increasing importance of finance, the US hegemony over the world, the commitment to reversing
the Great Compression, to restoring a more just balance (as they see it,) between capital and
labor were important. In US domestic politics, the secular stagnation in real wages, despite
the increased labor as wives entered the labor force, were the point. And it is by no means
clear that there are any significant forces opposing this.
"... As to Brazil the right is in power there because the Workers Party was, first, driven from office by a capitalist plot and its candidate for the Presidency, Lula, imprisoned on totally phony charges and prevented from running. Had Lula run he would have won, easily. Then there is Chile where the post Pinochet settlement is maintained by military force, backed by imperialists. Peru would vote for socialists too if it were given the chance as would Guatemala. Mexico just did. ..."
"... That, after all is what they did in Ukraine, where the first move of the coup government was to ban opposition socialist parties. A free election in Ukraine would deliver a left wing government. ..."
"... Anyway let us see: the election of a socialist government will be the first step in the building of a totally new society organised not for individual profit but for humanity as a whole. It won't come easily but the tendency towards it is as natural to society as the desire to live is to the individual. Underneath everything else-the propaganda, the ideology, the terrorism, fear and ignorance-we are all, everywhere, inspired by the same longing for justice, equality and fair treatment and that is almost always the underlying theme in every election. ..."
"... Right now there is a very important election taking place in the UK where, against massive opposition from capitalists and leading a party riven with corrupted, treacherous Fifth Columnists, Jeremy Corbyn is putting forward a political platform which could re-invigorate the left internationally. ..."
"Right wingers and fascists are winning more and more each time there's a vote..." Just Me@3
Maybe it is just you: in Argentine and Uruguay the fascists and other right wingers just
lost elections. As they did in Bolivia. If there was an election in Ecuador the left would
easily win, in fact it won last time and would still be in power were it not that Moreno, who
his Dad named Lenin, turned coat as soon as his left wing campaign had yielded him the
victory. In Colombia fair elections are very rare-basically left wing candidates are killed,
if not before, then after the election- but the left appears to have won most of the recent
provincial elections.
In Honduras the last election was a landslide victory for the left, until the voting was
stopped and the election stolen. In Haiti Aristide would win except that he is prevented from
running and kidnapped if he wins. The current US/OAS backed President would not last half an
hour without the muscle, from Canada et al, that keeps him in power while the people call for
the return of the $2billion that he and his predecessor-chosen by the Clinton Crime family-
stole.
As to Brazil the right is in power there because the Workers Party was, first, driven from
office by a capitalist plot and its candidate for the Presidency, Lula, imprisoned on totally
phony charges and prevented from running. Had Lula run he would have won, easily. Then there
is Chile where the post Pinochet settlement is maintained by military force, backed by
imperialists. Peru would vote for socialists too if it were given the chance as would
Guatemala. Mexico just did.
And that is just one continent -- the one most amenable to imperialist power, and closest
to being under the thumb of its death squads and torturers.
Around the world there are massive protests against neo-liberal policies and imperialism.
In many of them the CIA and MI6 are fishing in troubled waters, as they always do and
attempting to divert popular anger against corrupt capitalists into sectarian disputes. That,
after all is what they did in Ukraine, where the first move of the coup government was to ban
opposition socialist parties. A free election in Ukraine would deliver a left wing
government.
Look closer at Germany and you will see that the AfD are simply taking advantage of
circumstances that the left has refused to face honestly. The same is true in Hungary and
Poland where it has been the traditionalist, semi fascist clerical right wing parties which
have dared to challenge the neo-liberalism which the 'left' has promoted and protected. The
right wins in Europe by default, when the left refuses to follow its principles (Hello M
Hollande Blairite President that was of France!) and often that is because the left parties
have been colonised, systematically, by imperialist forces.
Anyway let us see: the election of a socialist government will be the first step in the
building of a totally new society organised not for individual profit but for humanity as a
whole. It won't come easily but the tendency towards it is as natural to society as the
desire to live is to the individual. Underneath everything else-the propaganda, the ideology,
the terrorism, fear and ignorance-we are all, everywhere, inspired by the same longing for
justice, equality and fair treatment and that is almost always the underlying theme in every
election.
Right now there is a very important election taking place in the UK where, against massive
opposition from capitalists and leading a party riven with corrupted, treacherous Fifth
Columnists, Jeremy Corbyn is putting forward a political platform which could re-invigorate
the left internationally.
"... Third, the notion of shareholder primacy helped to offload managerial responsibility. An amorphous and often anonymous 'shareholder pressure' became the explanation for all manner of managerial malpractice. Managers lamented the fact they had no choice but to disregard workers and other stakeholders because of shareholder power. Rhetorically, shareholders were deemed responsible for corporate problems. Yet in practice, managers, more often than not, enrolled shareholders into their own projects, using the newly-formed alliance with shareholders to pocket huge returns for themselves. ..."
"... If shareholder demands are understood to be the major problem in corporate life, then the solution is to grant executives more space. Yet the history of shareholder value tells us that managers have been leading the way in corporate governance. They do not need shielding from shareholders or anyone else and instead need to be made accountable for their decisions. Critiques of shareholder primacy risk muddying the responsibility of managers who have long put their own interests first. Perhaps the reason why executives are now so ready to abandon shareholder primacy, is because it never really existed. ..."
By
Sahil Jai Dutta, a lecturer in political economy at the University of Goldsmiths, London and
Samuel Knafo, a Senior Lecturer in the Department of International Relations at the University
of Sussex. Originally published at the PERC blog
In the late 1960s, a young banker named Joel Stern was working on a project to transform
corporate management. Stern's hunch was that the stock market could help managers work out how
their strategies were performing. Simply, if management was effective, demand for the firm's
stock would be high. A low price would imply bad management.
What sounds obvious now was revolutionary at the time. Until then profits were the key
barometer of success. But profits were a crude measure and easy to manipulate. Financial
markets, Stern felt, could provide a more precise measure of the value of management because
they were based on more 'objective' processes, beyond the firm's direct control. The value of
shares, he believed, represented the market's exact validation of management. Because of this,
financial markets could help managers determine what was working and what was not.
In doing this, Stern laid the foundation for a 'shareholder value' management that put
financial markets at the core of managerial strategy.
Stern would probably never have imagined that these ideas would 50 years later be castigated
as a fundamental threat to the future of liberal capitalism. In recent times everyone from the
Business Roundtable group
of global corporations, to the Financial Times , to the
British Labour Party has lined up
to condemn the shareholder ideology.
"Fifty years of shareholder primacy," wrote the Financial Times, "has fostered short-termism
and created an environment of popular distrust of big business."
It is not the first time Stern's creation has come under fire. A decade ago Jack Welsh,
former CEO of General Electric declared shareholder value " probably the dumbest idea in
the world ". And 15 years before then, British political commentator Will Hutton, among
others, found paperback fame with his book The State We're In preaching much the same
message.
To critics, the rise of shareholder value is a straightforward story , that
has been told
over and over again.
Following a general crisis of postwar profitability in the late 1970s, corporate managers came
under fire from disappointed shareholders complaining about declining returns. Shareholder
revolts forced managers to put market capitalisation first. The rise of stock options to
compensate corporate managers entrenched shareholder value by aligning the interests of
managers and shareholders. Companies began sacrificing productive investments, environmental
protections, and worker security to ensure shareholder returns were maximised. The fear of
stock market verdicts on quarterly reports left them no choice.
This account fits a widespread belief that financiers and
rentiers mangled the postwar golden era of capitalism. More importantly, it suggests a
simple solution: liberate companies from the demands of shareholders. Freed from the short-term
pursuit of delivering shareholder returns, companies could then return to long-term plans,
productive investments, and higher wages.
In two
recent articles , we have
argued that this critique of shareholder value has always been based on a misunderstanding.
Stern and the shareholder value consultants did not aim to put shareholders first. They worked
to empower management. Seen in this light, the history of the shareholder value ideology
appears differently. And it calls for alternative political responses.
To better understand Stern's ideas, it is important to grasp the broader context in which he
was writing. In the 1960s, a group of firms called the conglomerates were pioneering many of
the practices that later became associated with the shareholder revolution: aggressive mergers,
divestitures, Leverage buy-outs (LBOs), and stock repurchasing.
These firms, such as Litton Industries, Teledyne and LTV revolutionised corporate strategy
by developing new techniques to systematically raise money from financial markets. They wheeled
and dealed their divisions and used them to tap financial markets to finance further predatory
acquisitions. Instead of relying on profits from productive operations, they chased speculative
transactions on financial markets to grow.
These same tactics were later borrowed by the 1980s corporate raiders, many of which were in
fact old conglomerators from the 1960s. The growing efficiency with which these raiders
captured undervalued firms on the stock market and ruthlessly sold off their assets to finance
further acquisitions put corporate America on alert.
With fortunes to be made and lost, no manager could ignore the stock market. They became
increasingly concerned with their position on financial markets. It was in this context that
corporate capitalism first spoke of the desire to 'maximise shareholder value'. While sections
of the corporate establishment were put on the defensive, the main reason for this was not that
shareholders imposed their preferences on management. Instead, it was competitor managers using
the shareholder discourse as a resource to expand and gain control over other firms. Capital
markets became the foundation of a new form of financialised managerial power.
These changes made the approach of management consultants championing shareholder value
attractive. The firm founded by Stern and his business partner Bennett Stewart III took
advantage of the situation. They sold widely their ideas about financial markets as a guideline
for corporate strategy to firms looking to thrive in this new environment.
As the discourse and tools of shareholder value took hold, they served three distinct
purposes. First, they provided accounting templates for managerial strategies and a means to
manage a firm's standings on financial markets. The first and most famous metric for assessing
just how much value was being created for shareholders was one Stern himself helped develop,
Economic Value Added (EVA).
Second, they became a powerful justification for the idea that managers should be offered
share options. This was in fact an old idea floated in the 1950s by management consultants such
as Arch Patton of McKinsey as a means to top-up relatively stagnant managerial pay. Yet it was
relaunched in this new context as part of the promise to 'align the interests of managers with
shareholders.' Stock options helped managerial pay skyrocket in the 1990s, a curious fact for
those who believe that managers were 'disciplined' by shareholders.
Third, the notion of shareholder primacy helped to offload managerial responsibility. An
amorphous and often anonymous 'shareholder pressure' became the explanation for all manner of
managerial malpractice. Managers lamented the fact they had no choice but to disregard workers
and other stakeholders because of shareholder power. Rhetorically, shareholders were deemed
responsible for corporate problems. Yet in practice, managers, more often than not, enrolled
shareholders into their own projects, using the newly-formed alliance with shareholders to
pocket huge returns for themselves.
Though shareholder demands are now depicted as the problem to be solved, the same reformist
voices have in the past championed shareholders as the solution to corporate excesses. This was
the basis for the hope around the ' shareholder spring ' in
2012, or the recent championing of activist shareholders as ' labour's last
weapon' .
By challenging the conventional narrative, we have emphasised how it is instead the
financialisation of managerialism, or the way in which corporations have leveraged their operations on financial markets,
that has characterised the shareholder value shift. Politically this matters.
If shareholder demands are understood to be the major problem in corporate life, then the
solution is to grant executives more space. Yet the history of shareholder value tells us that
managers have been leading the way in corporate governance. They do not need shielding from
shareholders or anyone else and instead need to be made accountable for their decisions.
Critiques of shareholder primacy risk muddying the responsibility of managers who have long put
their own interests first. Perhaps the reason why executives are now so ready to abandon
shareholder primacy, is because it never really existed.
Imagine if all corporations were equally owned by the entire population? Then shareholder
primacy would just be representative democracy, no?
But, of course, corporations are not even close to being equally owned by the entire
population and part of the blame must lie with government privileges for private credit
creation whereby the need to share wealth and power with the entire population is bypassed
– in the name of "efficiency", one might suppose.
But what good is the "efficient" creation of wealth if it engenders unjust and therefore
dangerous inequality and levies noxious externalities?
"An amorphous and often anonymous 'shareholder pressure' became the explanation for all
manner of managerial malpractice."
Amorphous? Anonymous? Anybody who faced one of Milken's raiders, or paid Icahn's
Greenmail, would disagree. Nelson Putz, er, Peltz just forced P&G to start eating into
the foundation of the business to feed his greed. There's nothing amorphous or anonymous
about activist shareholders, especially when they take over a company and start carving it up
like a Thanksgiving turkey.
Creditors, or bond holders, appear to be the more powerful. Shareholders have no legal
recourse to protect their "ownership." Bondholders do have legal recourse.
Either way, many corporations more serve up their than serve their customers and the
general public. There is this belief that if a corporation is profitable, that's good but
does not include a public interest (for example Monsanto and Roundup.)
Managers used to fear the creditors more than shareholders, that's very much true.
But that has gone out of the window recently, as debt investors just chase return, so it's
seller's world, and few of them (debt investors) want to take losses as they are much harder
to recoup than before. So extend and pretend is well and alive.
In other words, one of the byproducts of QE is that the company management fears no-one,
and is more than happy to do whatever they want.
The problem is the agency. If we assume that we want publicly traded companies (which IMO
is not a given), the current incentives are skewed towards management paying themselves.
The problem with things like supervisory boards, even if they have high worker
representation, is that those are few individuals, and often can be (directly or indirectly)
corrupted by the management.
The "shares" incentive is just dumb, at least in the way it's currently structured. It
literally gives only upside, and often even realisable in short/medium term.
Corporations are artificial creations of the state. They exist in their current form under
a complex series of laws and regulations, but with certain privileges, such as Limited
Liability Corporations. It is assumed that these creatures will enhance economic activity if
they are given these privileges, but there is no natural law, such as gravity, that says
these laws and regulations need to exist in their current form. They can be changed at will
be legislatures.
This is why I despise the Citizens United decision which effectively gives these
artificial creations the same rights as people. i don't believe that Thomas Jefferson would
have found that to be "a self-evident truth." I think that Citizens United will be regarded
as something akin to the Dred Scott decision a century from now.
Shareholder primacy is an assumption that hasn't been challenged over the past couple of
decades, but can be controlled by society if it so desires.
The semantics of "shareholder primacy" are problematic. The word "shareholder" in this
formula echoes the kind problems that whirl around a label like "farmer". A shareholder is
often characterized in economics texts as an individual who invests money hoping to receive
back dividends and capital gains in the value and valuation of a company as it earns income
and grows over time. Among other changes -- changes to the US tax laws undermined these
quaint notions of investment, and shareholder. The coincident moves for adding stock options
to management's pay packet [threats of firing are supposed to encourage the efforts of other
employees -- why do managers needs some kind of special encouragement?], legalizing share
buybacks, and other 'financial innovations' -- worked in tandem to make investment synonymous
with speculation and shareholders synonymous with speculators, Corporate raiders, and the
self-serving Corporate looters replacing Corporate management.
This post follows a twisting road to argue previous "critique of shareholder value has
always been based on a misunderstanding" and arrives at a new critique of shareholder value
"challenging the conventional narrative." This post begins by sketching Stern's foundation
for 'shareholder value' with the assertion imputed to him: "if management was effective,
demand for the firm's stock would be high. A low price would imply bad management." The post
then claims "What sounds obvious now was revolutionary at the time." But that assertion does
not sound at all obvious to me. In terms of the usual framing of the all-knowing Market the
assertion sounds like a tautology, built on a shaky ground of Neolilberal economic religious
beliefs.
I believe "shareholder primacy" is just one of many rhetorical tools used to argue for the
mechanisms our Elites constructed so they could loot Corporate wealth. There is no
misunderstanding involved.
"But that assertion does not sound at all obvious to me."
I think you're severely understating this. I'd call it total [family blogging family blog].
As you go on to imply, it takes an act of pure faith, akin to religious faith in Dawkins'
sense of belief in the face of evidence to the contrary, to assume or assert this nonsense,
except insofar as it's tautological – if the purpose of management is to have a high
share price, then obviously the latter reflects the effectiveness of the former.
Well, we're all stakeholders now. There probably isn't much value to merely being a
shareholder at this point. First let's ask for a viable definition of "value" because it's
pretty hard to financialize an undefined "value" and nobody can financialize an empty
isolated thing like the word "management". Things go haywire. What we can do with this seed
of an idea is finance the preservation and protection of some defined value. And we can, in
fact, leverage a healthy planet until hell freezes over. No problem.
This fits within a Marxist analysis as the material conditions spurred the ideological
justifications of the conditions, not the ideology spurring the conditions.
Easy to bust this open by legislating against limited liability. Corporates were not
always limited liability, but it was promoted as a means to encourage formation of risky
businesses that would otherwise never develop due to risk averse owners or managers. This was
promoted as a social compact, delivering employment and growth that would otherwise be
unattainable. Like everything in life, human greed overcomes social benefits.
Governments world wide would and should step up and regulate to regain control, rather
than fiddling at the margins with corporate governance regulation. They won't, because
powerful vested interests will put in place those politicians who will do their bidding.
Another nail in the democracy coffin. The only solution will be a cataclysmic event that
unites humanity.
I think about stock markets as separate from companies and I'm wrong. Each of the stock
exchanges I have heard of started off when 4-5 local companies invested a few thousand each
in renting a building and a manager to run an exchange hoping it would attract investment,
promote their shares and pay for itself.
I remember when one of the major components of the Hong Kong Exchange, Hutchison, had a
bad year and really needed some black magic to satisfy the shareholders, the Deputy Chairman
abandoned his daytime job and spent trading hours buying and selling for a fortnight to
contribute something respectable for the annual accounts. Somebody paid and never knew it.
This was at the start of creative accounting and the 'anything goes' version of capitalism
that the article connects with Litton Industries, Teledyne and LTV but was infecting the
entire inner circle of the money.
If
we speak of neoliberal economic policies, instead than of neoliberal theories, I believe that
there are two aspects that are underappreciated:
1) The age of neoliberalism happened more or less when the USA turned from net exporter to
net importer (what Varoufakis called the "global plan" phase and the "global minotaur" phase).
I think that probably there is some world cycle stuff going on.
2) It seems to me that new deal economies had strong structural elements pushing wages up
(high welfare spending, strong unions, etc.), while in the neoliberal age those element
disappeared and were replaced to an almost complete dependence of cyclical measures (deficit
spending, interest rates) aimed at creating a permanent boom. When these policies fail we are
in deep s-t. But I doubt it is possible to keep a capitalist system permanently in boom
mode.
However the pumping up of deficit spending and lowering of the interest rates are also a
consequence of neoliberalism and of the overreliance on cyclical instruments, IMHO.
The tendency to scapegoat rather than make the case for one's own merit is very deeply
ingrained in our top-down liberal democratic systems; the Democratic establishment is
unfortunately just getting back to core principles by shifting almost exclusively to this mode
of discourse over the past decade. From Guy Debord's 1988
Commentaries on the Society
of the Spectacle :
This perfect democracy creates for itself its own inconceivable enemy, terrorism. In
effect, it wants to be judged by its enemies moreso than by its results. The history of
terrorism is written by the State; it is therefore instructive. The spectator populations
certainly cannot know everything about terrorism, but they can always know enough to be
persuaded that compared to terrorism, anything else must seem to be more or less acceptable,
and in any case more rational and democratic.
Three senior economists at the IMF, an organisation not known for its incaution,
published a paper questioning the benefits of neoliberalism. In so doing, they helped put
to rest the idea that the word is nothing more than a political slur, or a term without any
analytic power. The paper gently called out a "neoliberal agenda" for pushing deregulation
on economies around the world, for forcing open national markets to trade and capital, and
for demanding that governments shrink themselves via austerity or privatisation. The
authors cited statistical evidence for the spread of neoliberal policies since 1980, and
their correlation with anaemic growth, boom-and-bust cycles and inequality.
Also when we discussing the proper definition of neoliberalism we need to remember very
questionable pedigree of its founders. For example, Hayek was as close to the intellectual
prostitute of financial oligarchy as one can get:
After washing out at LSE, Hayek never held a permanent appointment that was not paid for
by corporate sponsors. Even his conservative colleagues at the University of Chicago
– the global epicentre of libertarian dissent in the 1950s – regarded Hayek as
a reactionary mouthpiece, a "stock rightwing man" with a "stock rightwing sponsor", as one
put it. As late as 1972, a friend could visit Hayek, now in Salzburg, only to find an
elderly man prostrate with self-pity, believing his life's work was in vain. No one cared
what he had written!
Which means that one of key components in the definition of neoliberalism should be that
this ideology was the project launched and supported by financial oligarchy, who felt
squeezed by the New Del regulations. And its main task was to justify the return to political
power of the financial oligarchy.
The more Hayek's idea expands, the more reactionary it gets, the more it hides behind
its pretence of scientific neutrality – and the more it allows economics to link up
with the major intellectual trend of the west since the 17th century. The rise of modern
science generated a problem: if the world is universally obedient to natural laws, what
does it mean to be human? Is a human being simply an object in the world, like any other?
There appears to be no way to assimilate the subjective, interior human experience into
nature as science conceives it – as something objective whose rules we discover by
observation.
Society reconceived as a giant market leads to a public life lost to bickering over mere
opinions; until the public turns, finally, in frustration to a strongman as a last resort
for solving its otherwise intractable problems.
Surely there is a connection between their growing irrelevance and the election of
Trump, a creature of pure whim, a man without the principles or conviction to make for a
coherent self.
Economists study a social reality that is unlike the physical universe. It is completely
manmade, highly malleable and operates according to different rules across time and space.
Economics advances not by settling on the right model or theory to answer such questions,
but by improving our understanding of the diversity of causal relationships.
Neoliberalism and its customary remedies – always more markets, always less
government – are in fact a perversion of mainstream economics. Good economists know
that the correct answer to any question in economics is: it depends.
"... When Chile's socialist leader Salvador Allende was elected in 1970, after a 6-year-long covert CIA operation to prevent his election, President Nixon ordered U.S. sanctions to " make the economy scream ." ..."
"... U.S. sabotage of the new government intensified, and on September 11th, 1973, Allende was overthrown in a CIA-backed coup. The new leader, General Augusto Pinochet, executed or disappeared at least 3,200 people, held 80,000 political prisoners in his jails and ruled Chile as a brutal dictator until 1990, with the full support of the U.S. and other Western governments. ..."
"... The Chicago Boys pointed to rising economic growth rates in Chile as evidence of the success of their neoliberal program, but by 1988, 48% of Chileans were living below the poverty line. Chile was and still is the wealthiest country in Latin America, but it is also the country with the largest gulf between rich and poor. ..."
"... The governments elected after Pinochet stepped down in 1990 have followed the neoliberal model of alternating pro-corporate "center-right" and "center-left" governments, as in the U.S. and other developed countries. Neither respond to the needs of the poor or working class, who pay higher taxes than their tax-evading bosses, on top of ever-rising living costs, stagnant wages and limited access to voucherized education and a stratified public-private healthcare system. Indigenous communities are at the very bottom of this corrupt social and economic order. Voter turnout has predictably declined from 95% in 1989 to 47% in the most recent presidential election in 2017. ..."
Uprisings against the corrupt, generation-long dominance of
neoliberal "center-right" and "center-left" governments that benefit the wealthy and
multinational corporations at the expense of working people are sweeping country after country
all over the world.
In this Autumn of Discontent, people from Chile, Haiti and Honduras to Iraq, Egypt and
Lebanon are rising up against neoliberalism, which has in many cases been imposed on them by
U.S. invasions, coups and other brutal uses of force. The repression against activists has been
savage, with more than
250 protesters killed in Iraq in October alone, but the protests have continued and grown.
Some movements, such as in Algeria and Sudan, have already forced the downfall of
long-entrenched, corrupt governments.
A country that is emblematic of the uprisings against neoliberalism is Chile. On October 25,
2019, a million Chileans -- out of a population of about 18 million -- took to the streets
across the country, unbowed by government repression that has killed at least 20 of them and
injured hundreds more. Two days later, Chile's billionaire president Sebastian Piñera
fired his entire cabinet and declared, "We are in a new reality. Chile is different from what
it was a week ago."
The people of Chile appear to have validated Erica
Chenoweth's research on non-violent protest movements, in which she found that once over
3.5% of a population rise up to non-violently demand political and economic change, no
government can resist their demands. It remains to be seen whether Piñera's response
will be enough to save his own job, or whether he will be the next casualty of the 3.5%
rule.
It is entirely fitting that Chile should be in the vanguard of the protests sweeping the
world in this Autumn of Discontent, since Chile served as the laboratory for the neoliberal
transformation of economics and politics that has swept the world since the 1970s.
When Chile's socialist leader Salvador Allende was elected in 1970, after a 6-year-long
covert CIA operation
to prevent his election, President Nixon ordered U.S. sanctions to " make the economy scream
."
In his first year in office, Allende's progressive economic policies led to a 22% increase
in real wages, as work began on 120,000 new housing units and he started to nationalize copper
mines and other major industries. But growth slowed in 1972 and 1973 under the pressure of
brutal U.S. sanctions, as in Venezuela
and Iran today.
U.S. sabotage of the new government intensified, and on September 11th, 1973, Allende was
overthrown in a CIA-backed coup. The new leader, General Augusto Pinochet, executed or
disappeared at least 3,200 people, held 80,000 political prisoners in his jails and ruled Chile
as a brutal dictator until 1990, with the full support of the U.S. and other Western
governments.
Under Pinochet, Chile's economy was submitted to radical "free market" restructuring by the
"
Chicago Boys ," a team of Chilean economics students trained at the University of Chicago
under the supervision of Milton Friedman for the express purpose of conducting this brutal
experiment on their country. U.S. sanctions were lifted and Pinochet sold off Chile's public
assets to U.S. corporations and wealthy investors. Their program of tax cuts for the wealthy
and corporations, together with privatization and cuts in pensions, healthcare, education and
other public services, has since been duplicated across the world.
The Chicago Boys pointed to rising economic growth rates in Chile as evidence of the success
of their neoliberal program, but by 1988, 48% of Chileans were living below the poverty line.
Chile was and still is the wealthiest country in Latin America, but it is also the country with
the largest gulf between rich and poor.
The governments elected after Pinochet stepped down in 1990 have followed the neoliberal
model of alternating pro-corporate "center-right" and "center-left" governments, as in the U.S.
and other developed countries. Neither respond to the needs of the poor or working class, who
pay higher taxes than their tax-evading bosses, on top of ever-rising living costs, stagnant
wages and limited access to voucherized education and a stratified public-private healthcare
system. Indigenous communities are at the very bottom of this corrupt social and economic
order. Voter turnout has predictably declined from 95% in 1989 to 47% in the most recent
presidential election in 2017.
If Chenoweth is right and the million Chileans in the street have breached the tipping point
for successful non-violent popular democracy, Chile may be leading the way to a global
political and economic revolution.
It seems to me an important tenet of the neoliberal ideology is the arbiter (or
auctioneer) role it gives the state and other political institutions with respect to markets.
Markets are the locus of justice and efficiency, but political institutions have the
essential task of organizing them and the competitions that takes place within them,
supposedly at least.
In practice, this translated in a central role of political power not only in privatizing
and breaking state monopolies, but also in the creation, sometimes ex nihilo, of markets
supervised by state or quasi-state agencies (shielded of electoral choices by regulatory or
ideally constitutional provisions) whose role was to organize concurrence in domains
classical liberal economic theory would consider natural monopolies or natural public
properties (education, health service, energy distribution, infrastructure of transportation,
telecommunication, postal and banking service etc.)
What an excellent and deep observation ! Thank you ! This is the essence of the compromises
with financial oligarchy made by failing social democratic parties. Neoliberalism is kind of
Trotskyism for the rich in which the political power is used to shape the society "from above".
As Hayek remarked on his visit to Pinochet's Chile – "my personal preference leans toward
a liberal dictatorship rather than toward a democratic government devoid of liberalism".
George Monblot observed that "Neoliberalism was not conceived as a self-serving racket [of
the financial oligarchy], but it rapidly became one." ( The Guardian, Apr 15, 2016):
Neoliberalism sees competition as the defining characteristic of human relations. It
redefines citizens as consumers, whose democratic choices are best exercised by buying and
selling, a process that rewards merit and punishes inefficiency. It maintains that "the
market" delivers benefits that could never be achieved by planning.
Attempts to limit competition are treated as inimical to liberty. Tax and regulation
should be minimised, public services should be privatised. The organisation of labour and
collective bargaining by trade unions are portrayed as market distortions that impede the
formation of a natural hierarchy of winners and losers. Inequality is recast as virtuous: a
reward for utility and a generator of wealth, which trickles down to enrich everyone. Efforts
to create a more equal society are both counterproductive and morally corrosive. The market
ensures that everyone gets what they deserve.
The free (as in absence of regulation for FIRE) market produces a tiny cadre of winners and
an enormous army of losers (10% vs 90%) – and the losers, looking for revenge, have
turned to Trump. Now entrenched centers of "resistance" (and first of all CIA, the Justice
Department, The Department of State and a part of Pentagon) are trying to reverse the
situation. Failing to understand that they created Trump and each time will reproduce it in
more and more dangerous variant.
Trumpism is the inevitable result of the gap between the utopian ideal of the free (for the
FIRE sector only ) market and the dystopian reality for the majority of the population
("without work, without possibilities, without any means of escape" Pope Francis, "Evangelii
Gaudium")
The situation in which the financial sector generates just 4% of employment, but accounts
for more than 25% of corporate profits is unsustainable. It should be reversed and it will be
reversed.
"... Markets are the locus of justice and efficiency, but political institutions have the essential task of organizing them and the competitions that takes place within them, supposedly at least. In practice, this translated in a central role of political power not only in privatizing and breaking state monopolies, but also in the creation, sometimes ex nihilo , of markets supervised by state or quasi-state agencies (shielded of electoral choices by regulatory or ideally constitutional provisions) whose role was to organize concurrence in domains classical liberal economic theory would consider natural monopolies or natural public properties (education, health service, energy distribution, infrastructure of transportation, telecommunication, postal and banking service etc.). In that sense, the economical management of the EU post-1992 by the European Commission is probably the actual political system closest to the pure ideology. ..."
"... On the whole I think that modern days anti-neoliberals like Trump are closer to paleo-liberals (European sense), that is even less redistributionist, so even when they call themselves as anti-neoliberal they are even more neoliberal than the older bunch. ..."
'Rather than concentrating on national programs of monetarism, privatization, and
union-busting, Quinn Slobodian focuses on the transnational dimension: the EU and the WTO. The
protagonists of his story are people you have never heard of, second-generation students of the
original Austro-German founders, trained as lawyers, not economists -- men like Ernst-Joachim
Mestmäker and Ernst-Ulrich Petersmann, who shaped the agenda in Brussels and helped to
steer global trade policy .
Slobodian has underlined the profound conservatism of the first generation of neoliberals
and their fundamental hostility to democracy. What he has exposed, furthermore, is their deep
commitment to empire as a restraint on the nation state. Notably, in the case of Wilhelm
Röpke, this was reinforced by deep-seated anti-black racism. Throughout the 1960s
Röpke was active on behalf of South Africa and Rhodesia in defense of what he saw as the
last bastions of white civilization in the developing world. As late as the 1980s, members of
the Mont Pèlerin Society argued that the white minority in South Africa could best be
defended by weighting the voting system by the proportion of taxes paid .
If racial hierarchy was one of the foundations of neoliberalism's imagined global order, the
other key constraint on the nation-state was the free flow of the factors of production. This
is what made the restoration of capital mobility in the 1980s such a triumph. Following in the
footsteps of the legal scholar and historian Samuel Moyn, one might remark that it was not by
accident that the advent of radical capital mobility coincided with the advent of universal
human rights. Both curtailed the sovereignty of nation states. Slobodian traces that
intellectual and political association back to the 1940s, when Geneva school economists
formulated the argument that an essential pillar of liberal freedom was the right of the
wealthy to move their money across borders unimpeded by national government regulation. What
they demanded, Slobodian quips, was the human right to capital flight .
By the 1990s it can hardly be denied that neoliberalism was the dominant mode of policy in
the EU, OECD, GATT, and WTO
critiques can be radically illuminating by exposing the foundations of key concepts of
modernity. But where do they lead? For Hayek this was not a question. The entire point was to
silence policy debate. By focusing on broad questions of the economic constitution, rather than
the details of economic processes, neoliberals sought to outlaw prying questions about how
things actually worked. It was when you started asking for statistics and assembling
spreadsheets that you took the first dangerous step toward politicizing "the economy."
An anti-Hayekian history of neoliberalism would be one that refuses neoliberalism's
deliberately elevated level of discourse and addresses itself instead to what neoliberalism's
airy talk of orders and constitutions seeks to obscure: namely, the engines both large and
small through which social and economic reality is constantly made and remade, its tools of
power and knowledge ranging from cost-of-living indicators to carbon budgets, diesel emission
tests and school evaluations. '
I don't have time to talk about this here, and it's probably too dull, but there is a huge
difference between the, so to speak, first generation of neoliberals, who were Europeans
(frequently of aristocratic lineage ..Friedrich August von Hayek and Ludwig Heinrich Edler von
Mises ) and brought up in a very notable Central European intellectual environment (Freud,
Nietzsche, Hegel, Marx .Hayek et al hated Marx, but they had read and understood him) , who had
a highly MittelEuropean concern for abstract theorising and qualitative data, and the 'school'
of neoliberalism that emerged in the 1950s in the United States (Friedman, of course, but also
the Chicago Boys). This latter group were rooted in Anglo-Saxon empiricism, logical positivism
(not in its so to speak original form, but as interpreted by e.g. Ayer), and had a deep love of
quantitative data, spreadsheets, equations, mathematical laws, and so on. They had little
concern or interest in the history of economics, and while they ritually spat on portraits of
Marx (and Hegel) every morning just to get themselves motivated in the morning, they didn't
read Marx, or indeed any non-English language writers. They paid lip service to the Austrian
school but again, they didn't really understand or care about what they were saying. They were
concerned with making economics a natural science (which the Austrians were absolutely not),
and were also concerned with making marketisation the so to speak 'default mode' of human
cognition.
As Tooze hints, it is our current quotidian situation (in which the quantitative analysis of
any given social phenomena in terms of 'competition' ..'school league tables' 'university
league tables', consumerist assessment of products in terms of quantitative output (that one
sees in, e.g. Which magazine), the increasing attempt to view Nature as a bankable
(quantitative) resource which can be capitalised) really derives from this 1950s and 1960s
approach to reality, as does the worship of the computer and the assumption that all social
problems are essentially non-ideological, quantitative, and solvable by technocratic means,
with (of course) the collaboration of the private sector (CF 'New Labour') .
And this is the world we all live in. In that sense, of course, we are all neoliberals
now.
@John Quiggin The core of the neoliberal program is (i) (ii) (iii)
Hmmm. For a rather short (and perceptive) blog post, that would probably do, but I find
the description a bit too simplistic in the way it describes the role of the state. It seems
to me an important tenet of the neoliberal ideology is the arbiter (or auctioneer) role it
gives the state and other political institutions with respect to markets. Markets are the
locus of justice and efficiency, but political institutions have the essential task of
organizing them and the competitions that takes place within them, supposedly at least. In
practice, this translated in a central role of political power not only in privatizing and
breaking state monopolies, but also in the creation, sometimes ex nihilo , of markets
supervised by state or quasi-state agencies (shielded of electoral choices by regulatory or
ideally constitutional provisions) whose role was to organize concurrence in domains
classical liberal economic theory would consider natural monopolies or natural public
properties (education, health service, energy distribution, infrastructure of transportation,
telecommunication, postal and banking service etc.). In that sense, the economical management
of the EU post-1992 by the European Commission is probably the actual political system
closest to the pure ideology.
Another aspect that is but alluded to is the actual electoral basis of neoliberal
political power, a topic discussed at length in the Brahmin left thesis of Piketty's most
recent book, though other people came there way earlier and though Atari democrats is
from 1983.
As for the failure of neoliberalism, the crucial point in my mind is that both the
ideological and actual social reality of neoliberalism (probably more or less the same thing)
– that is to say the idea that competition in which the most efficient, educated,
innovative come on top and in which the ensuing economic growth lifts all boats –
dramatically lack a fundamental property: it cannot reproduce the conditions of its own
social existence. The central problem is concrete and simple: those who came on top of the
previous round of the competition essential to neoliberal philosophy have the means and
opportunity to rig the next round. Add to that the fact that the original basic insights of
classical liberal proved to be more empirically correct than their neoliberal update, in that
natural public monopolies are indeed more efficiently managed by public monopolies, and you
get a vicious circle in which the tax cuts, social welfare cuts and privatizations are paid
by diminishing common goods, so that maintaining constant welfare (even for the educated and
wealthy) requires more income (you may want to enroll your children in a private school, or
to supplement your declining national health or pension plan with a private one etc.). Those
who can do it consequently exert as much pressure as they can on the economical and political
system so that their income increases, but this requires new tax cuts, social welfare cuts
and privatizations.
Another much more elementary point is that neoliberalism, as a political philosophy, is
characterized by its very relaxed attitude, to say the least, towards inequality. People born
after 1995, whose entire life experience has been of increased and extreme inequalities, can
hardly subscribe to such a view.
MisterMr 11.05.19 at 10:04 am (no link)
Political terms like "neoliberalism" make sense in opposition to other terms representing
other political movements, because one political movement generally rises against another.
But in the case of neoliberalism there are two different opposing movements in two
different times, so the term can have 2 different meanings.
The first meaning is in opposition to postwar new deal systems: "neoliberals" were people
who tought that the state was excessively large and had to be pruned.In this sense, Tatcher and Reagan were the most neoliberal, and other third wayists on the
left like Clinton and Blair were soft neoliberals.
It should be noted that soft neoliberalism was actually very popular and not at all something
imposed from the above, because for a variety of reasons many people including on the left
tought that the old new deal system was going bad.
But more recently "neoliberalism" is opposed by a sort of neo nationalism, most obviously
from right wing populists.
Said right wing populists are pissed off by the "cosmopolitan" aspect of neoliberalism, not
by the fact that the state is reined in.
So the meaning of "neoliberalism" in this acception is redefined.
If we take the first meaning (reduced redistribution), we should come to the idea that
Trump is more neoliberla than Obama (Trump cut taxes on the rich, Obama increased them).
If we take the second meaning Obama was clearly more cosmopolitan than Trump so Obama would
be more neoliberal.
Other meanings are somehow attached to the term without a real justification, for example
it is common to say that "austerity" is a neoliberal thing but, if you look at the USA,
deficits post 1980 are generally higher than deficits before 1980 ("austerity" is a relative
concept).
Also the "cosmopolitan" thing is dubious, most countries before WW2 were very
protectionistic (Italy during fascism had autarky as an official policy), so compared to this
"new deal" economy was already quite cosmopolitan and corresponded to a phase of strong
cultural globalization, however later globalization increased even more so relative to the
neoliberal (post 1980) period the new deal period looks more protectionist, but in the
great scheme of things it wasn't really.
On the whole I think that modern days anti-neoliberals like Trump are closer to
paleo-liberals (European sense), that is even less redistributionist, so even when they call
themselves as anti-neoliberal they are even more neoliberal than the older bunch.
But this is because I think that various ideas of the current anti-neoliberals are BS,
like the idea that immigration is bad for wages. People who really believe that immigration
is bad for wages would likely disagree with me.
insist on contradicting likbez on other issues. But Trump's attempt to plant oppo on Biden
abroad is the same thing that is alleged of the so-called dirty dossier. If the one is
treasonous, so is the other. Or, as I say, they're just dirty tricks, which is standard for a
corrupt system both sides uphold.
This simply is not the case and can't be compared. Biden is up to ears in Ukraine mess. And
not only corruption, although this is clearly the case and provable (for a Clinton-style
neoliberal this is a kind of badge of honor ;-), but in the much more serious stuff, including
his instigation of the civil war in Donbas region in order to weaken Russia. The latter is a
war crime.
Further, as Lee Arnold observes, none of this analysis makes any sense unless one can
explain why the Deep State would panic at Trump, even if that nonsense were a real thing.
True.
Trump is just waging economic warfare, which may have fewer US soldiers killing people but
is still warfare. As in Venezuela or Iran, I think, in many respects it is an even crueler
form of warfare in that it directly targets the people. Any defense of Trump as being less
violent takes words for deeds, and ignores anything but US casualties. The key notion, that
Trump is somehow draining the swamp, is preposterous, starting with the folly of accepting
such a meaningless phrase as sincere. There is no reasonable definition of swamp that doesn't
imply Trump is a swamp creature.
I completely agree. I think that Trumpism can be defined as "national neoliberalism" --
fully neoliberal policies domestically, but with an important change in foreign policy --
instead of classic neoliberal globalization based on organizations like WTO, they want a
different, more imperial type of globalization based mostly on bilateral treaties in which the
USA can impose his will by the sheer economic might. Kind of British empire type of
globalization.
Any theory that sees the CIA as the anti-Trump forgets the Clinton took the heat for
covering up how a falling out over arms deals with jihadis led to the clash in the first
place. So far, from helping Clinton the CIA hung her out to dry.
The military is also a part of the Deep State if there were one, but it was anti-Clinton,
just like it has been for decades. As for demonizing John Brennan for the wrong reasons,
Brennan has had a bipartisan career. But especially if you insist Brennan et al. are
Democratic Party hacks, then that must mean Trump is just another Republican. And that
contradicts every word about the Deep State and the swamp.
In no way, the CIA can be viewed as a monolithic organization. Factions within the CIA
can fight with each other. The same is true for the FBI. Why Comey made this statement is
completely unclear, but most probably there were some really incriminating information on
Weiner laptop (which contained about 694,000 emails and a very strange "Insurance" folder )
that made it impossible not to reopen investigation due to the pressure from the other
factions (for example, NY FBI office), which in case of Comey non-compliance could leak
information to the press and finish Clinton; probably this was a "forced move" (Zugzwang)
to prevent greater damage (see https://sputniknews.com/us/201808281067518732-comey-lied-clinton-emails-laptop/
)
My impression is that the military is also split. Compare Flynn with McMaster. The
latter was a rabid neocon from the beginning to the very end. It looks like DIA hates
Clinton neoliberals, including Obama, more than Trump, and that's why some forces within
the CIA and FBI decided to neutralize Flynn using dirty methods ( Lisa Page edited Flynn's
FBI 302 Report and then lied about that).
And powerful faction within DIA (and Pentagon in general), NSA and FBI definitely resent
Brennan (and CIA in general:
*https://turcopolier.typepad.com/sic_semper_tyrannis/2019/11/burn-cia-and-fbi-to-the-ground-start-over.html
), viewing him as inept careerist who was promoted despite his abysmal failures in KSA
(where he served under Colonel Lang). He owns his promotion to Obama.
Former CIA Director John Brennan has admitted to lying under oath to Congress on two
occasions. He may well face further legal exposure.
Brennan in 2016 also reached out to foreign intelligence services, primarily British
and Australian, to surveille and entrap Trump aides, as a way of circumventing rules
preventing CIA monitoring of American citizens. And he may well have also
reverse-targeted Americans, under the guise of monitoring foreign nationals, in order to
build a case of so-called Trump collusion.
Finally, Brennan testified to Congress in May 2017 that he had not been earlier aware
of the dossier or its contents before the election, although in August 2016 it is almost
certain that he had briefed Senator Harry Reid (D-Nev.) on it in a spirited effort to
have Reid pressure the FBI to keep or expand its counterintelligence investigation of
Trump during the critical final weeks of the election.
I think Brennan is a kind of a soldier of the neoliberal empire, who was loyal to Obama
and serves as a conduit of Obama policies and Obama decision to unleash the Russiagate
false flag operation (which was colored not only by Obama's CIA past and his imperial
presidency experience, but also by the desire to preserve his "legacy" and strong personal
animosity to Trump.)
In no way Brennan should be viewed as an independent player. It looks like Obama is at
the center of the Russiagate false flag operation and is a much more dangerous defender of
the global neoliberal empire then Brennan.
What I would like to stress in this post is that the events connected with Nulandgate,
Russiagate, Ukrainegate, and impeachment, are so complex that we probably can judge them
objectively only a decade or more later. But like JFK assassination Russiagate (and
Ukrainegate and impeachment are simply Russiagate 2.0) signifies finishing of one
historical period (classic neoliberalism period in the USA), and opening of the other,
which might be "national neoliberalism" period, or something completely different.
Washington D.C. politicians and the elites have created a state seized by a tiny cabal of
oligarchs and tyrants of the U.S. corporation. Most of these types have no concept of what our
lives are like. These types don't use regular commercial airlines, definitely not in passenger
class! Many take a helicopter to work. Many have never been to a grocery market, instead always
being catered to. Pres. Bush Sr. admitted this about himself.
Obviously, the members of Congress lack the capacity to fix our mess. For some members, it
is purposeful. To make it worse, they only know how to piecemeal problems without having any
concept or willingness of how to replace a failed system to a new one or truly fix the present
one. Arguably, many of these same sold out souls believe that the the Fabian gradualism way to
a new world order is an inevitability, so why try to fix the unchangeable? With this thought
process, perhaps they escape any guilt to their predatory and self-serving largess. These
petty, timid and uncreative bureaucrats are trained to carry out systems management, seeing
only piecemeal solutions that simply move the chairs around on the titanic! They are too busy
favors to satisfy the corporate and banking structures that finance their re-elections.
Their entire focus is on numbers, profits and personal advancements. I contend that a large
majority lack a moral & intellectual core. They are able to deny gravely ill people to
medical coverage to increase company profits as they are to peddle costly weapon systems to
blood soaked dictatorships who pledge to kill us. The human consequences never figure into
their balance sheets. The democratic system, they believe, is a secondary product of the free
market, which they slavishly serve, and it applies to both parties.
Each political party claims to have the cures, but Americans have finally learned to not
believe them anymore. We see that it's largely just theatre and they are the actors. It's like
having buyer's remorse after the elections are done, with the realization that things won't
change except to move even farther over to the one world globalist agenda for another 4 years,
no matter who is in power.
Whatever mix of President, House or Senate you like, nothing seems to move towards good
commonsense changes that everyday people can appreciate. For proof that both political sides
belong to the corporatists, consider that even though the House Republicans fought against
Obamacare with theatrical fortitude, even when they won the House and in fact finally have
powers defund Obamacare, they didn't. This act is repeated time and time again, with
Republicans acting and talking like they just couldn't overcome the opposition! But wait!
Republicans have owned the House for years, so they have had full control of the nation's purse
strings as well! Yet, they never seem to use their powers to get anything accomplished as far
as really turning government around, creating a true economy, cut waste or nearly anything else
that Joe Six-Pack could appreciate. How about real reforms that would align our country with
the U.S. Constitution? How about using restraint before going into warring's by whatever
methods are needed to justify or reject a war? And how fairer campaign reforms, instilling true
and honest Wall Street reforms, balancing of the budgets. Isn't that odd? Once we realize that
there are powers above them all, especially those of the establishment, it isn't so odd at
all.
Within this corporate inverted fascism we witness around us here in America today, any
substantial changes for the good of the country is difficult to achieve, to say the least. As
with so many problems America faces, many times we witness many controversial laws being
codified into law by liberal judges without a public vote or congressional vote. Sadly, in such
cases we see that it is not necessary for socialist and communist activists and leaders to
re-write the Constitution. It is easier for these cockroaches to exploit legitimate power by
means of judicial and legislative interpretations. The courts, populated by justices who are
often put behind the bench by politicians on both saide of the isle who act as representatives
of the corporate elites, this too often allows many corporate laws to be decided by the bench
while evading the taking of votes to decide their fates. This is part and parcel to the long
running Fabian plan to destroy the democratic system from within while the electorate is
asleep.
A recent example of the above statements follows: The Citizens United Supreme Court decision
in particular was a godsend to corporations in particular. Without much fanfare or public
knowledge, this decision insures that huge corporate campaign contributions are protected
speech under the First Amendment. Now, corporations are treated by the state as persons. Yes,
even though corporate misdeeds are allowed to escape personal prosecutions, somehow the court
decided this was a good and logical decision! These nice corporations have over 35,000
lobbyists in Washington who shape and write legislations in exchange for campaign
contributions. Now it is possible for campaign donors to make unlimited campaign contributions
to Super Pac's, for their corporate status allows them to do such.
Tens of millions of Americans are catching on to the extent of this takeover of our court
system and our country during the last couple of decades and are rising up, even though they
often don't really understand the crux of the problems and those behind the smoke screens of
political deception. Answers and fixes will not come unless people learn who the real enemies
of freedom are. They must engage in peaceful but loud revolt en-masse, if that is what it
takes, or else we shall face the music. In these situations, revolution is called for by our
Founding Fathers. We are at fault for falling asleep and allowing the real powers around the
world to fall more and more into the hands of the elites. We are now witnessing how effective
their slowly acquired manipulations and their acquisitions of power over state have led us to
this abyss. If allowed to continue, it is hard to believe but we will be faced with even more
laws, edicts, governmental oversight and new trade agreements that will water down and surely
eliminate most freedoms that we can still claim to have. Such will also elevate the costs to
small and medium American businesses to the point that they can no longer operate. Citizens
will face even larger losses of liberties, freedoms and economic inequalities than what we see
today.
Corrupted partnerships between Congress and corporatisms have increased so immensely in the
last 25 years that in one way or another, nearly all bills passing thru Congress today are
summarily stuffed with pork filled, anti-Constitutional, even foreign favoritisms aimed against
America's best interests in large part. And they are usually typed up by the corporate lawyers!
These silent partnerships between Washington and corporations are not slowing, quite the
opposite.
It has been no mistake that since the 2008 stock market and economic crash, Americas
economic system had still not boosted wages by much for the 90%. By 2018 only the top 10%,
again, had been the only ones to see large increases in real income. Is this just a mistake?
Not if history is any example! Both parties in Washington have been onboard with the corporate
ass kissings.
Just as in 2008, the un-federal reserve, the bankers and Wall Street are again playing even
larger risks with other people's money obtained through near zero interest rate policies. For
without the near zero un-federal reserve rates, this anemic economy would have crashed years
ago while the national debt exploded. Many top economists fell as I do that only because of the
near free interest rates has the American economy not crashed and burned. It has been on life
support, never truly recovering for the largess of American debt.
. The official economic indicators we hear on the television and news sources are largely
fabrications. Official economic numbers such as the unemployment rate, new jobs creation,
inflation, money supply, GDP, GNP, are all massaged by whoever is in power. The formulas and
the metrics that have been used for so many began changing around the time of President Bill
Clinton (that can be verified).
Have you ever wondered why the CPI, GDP and employment numbers run counter to your personal
and business experiences? The problem lies in the biased and often-manipulated government
reporting. The quality of government reporting has deteriorated sharply in the last couple of
decades, largely for political gain in a particular year and who is in office. Reporting
problems have included methodological changes to economic reporting that have pushed headline
economic and inflation results out of the realm of real-world or common experience. Many
statistics have been massaged with new metrics that often do not take into consideration many
of the factors of the old methods, often leaving out inconvenient facts, and thus making it
possible for the governmental accountings to look so rosy. The unemployment rate now includes
anyone who works even one hour per week! I a person works three jobs in order to survive, this
counts as 3 jobs! After just a couple of weeks of unemployment, a person is dropped off the
unemployment rolls. On and on it goes!
I am one of the many who feel confident that the coming crash will have the job of not only
wiping clean the current world debts, but also the leftovers of the corporate, state and
federal debts of the 2008 world economic crash that were never fully flushed out of the
system!
The big banks have been back at their old games of leveraging for about 10 years since the
last crash. They have been quietly expanding and ravaging the financial markets, increasing
their risk takings far beyond that of 2008. They never learned any lesson it would seem. Or
perhaps we should consider that they actually are very smart indeed. With government guarantees
and other incentives, could it possibly be that those stellar bankers whom own those thirty
story swanky buildings in Manhattan might be complicit in purposely gaming the system AGAIN?
Before the next financial Armageddon takes place? Could this consortium of big banks, most of
whom are largely fronts for just a few mega wealthy families of the world, be partnering with
the un-federal reserve insiders as well? Could the run up of reckless behavior by the banks
really consist of an intentional act by the banking elites to rob the very same system that
propped them back up last time they took a big fall? The answer is obvious. It isn't real money
after all. They ran off with trillions of dollars of taxpayer's bailout money first time
around, and from all indications they will recover all of their paper losses during the next
crash of 2017-2018.
This time the new world order elites have engineered a coming economic crash that will many
financial analysts believe will be a boon for those on the inside. This will be on a scale as
the world has never seen. It will make the 1929 Great Recession look like a picnic! The bigger
they are, the harder they fall as the saying goes. We have seen every recession since the
1960's takes longer to take place. Always we see higher highs and the lower lows in each
successive crash. These charts are easily available online from the FED website. Without fixing
the systemic problems of a unfederal reserve and an out of control government, each one builds
upon the last one. If that's an indication, we are going to face financial Armageddon!
Before I go into the next section, I must preface it by explaining to the readers that I am
not anti-capitalism at all! Capitalism and democracy must work together, and government must
restrain capitalism from becoming a mechanism to be enjoyed only by a few. What we are
witnessing today is just the opposite of that widely desired ideal. I believe we can all agree
that too much of one or the other is dangerous. Karl Marx had even predicted the path that the
corporate elites have taken. He prophetically claimed as well that it would all end up as a
monopolized capitalism cabal if not stopped.
America and major nations have been duped into, or knowingly accepting, the globalists
callings for so-called free trade agreements, allowing these mega national corporations to
consolidate their trade rules under one big unregulated umbrella that only they benefit from.
The free trade argument has never really been about fair trade, it was about "managed trade"
devoted towards a monopolized market system. The following two quotes below come from two
Rockefeller globalist pigs and surely hit a cord with what has been talked of above. These past
tyrants and many like them run on the same old abusive tactics of their past lineages whom
share their last names They are the proven grand masters and architects of the global elite's
one world cabal. Forgive me if I have already included these two. These are just too good to
not be repeated often!
PLEASE don't make the common mistake of thinking that these old geezers are pass`e and those
days are gone, not relevant anymore for they have been extremely good at hiding their secrets
for all these years, at least for those too busy to pay attention and really follow their
trailing's for many years as some have. The plan has worked so well, we are on its doorsteps!
After what you now know, do not the bankers really run the world? The quote below may help with
that decision
"The supranational sovereignty of an intellectual elite and world bankers is surely
preferable to the national auto-determination practiced in past centuries." -David Rockefeller,
Memoirs
"Competition is a sin!" John D. Rockefeller
MARX KNEW!
Karl Marx warned that unfettered capitalism is a revolutionary force that consumes greater
and greater numbers of human lives and whatever else it needs until it consumes itself.
Uncomfortable and unpopular as it might be for die hard in-the-wool capitalist lovers to admit
it, the huge mega capitalists of the world today do not care about individual nations or
sovereignty. They care not if they exploit the very poor, leave their more expensive workers
unnecessarily behind to suffer. Unrestrained capitalists are notorious for destroying forests,
habitats, lives, causing massive and avoidable oil spills, and basically whatever got in way in
their quest for profits. History is replete with examples. This is the uncomfortable bad side
of capitalism if not regulated properly.
Perhaps it was Jim Cramer on CNBC's Mad Money who admitted that what happened in the 2008
crash was in part a late stage symptom of capitalism written about by Karl Marx. His exact
words were "The only guy who really called this right was Karl Marx." It has become more and
more obvious since the 2008 crash that most of the "experts" don't have a clue in understanding
the underlying actions of the markets and the forces that manipulate it or how bad they damage
it, but Kramer obviously knows.
So, should we do away with capitalism? Of course not ! It by far offers the best economic
system of any other to benefit the good of mankind! It is a miraculous system that, if
practiced with common sense restraints and fair rules of trade, does benefit both the
corporations, the smaller businesses, workers and the general welfare of most all. Only
capitalism can offer so many benefits to so many, but it needs to be tamed with laws that
restrain those excesses. Today's globalism represents a style of capitalism that in large part
helps but for a few to any magnitude. Unfortunately, for the last 100 years the global
capitalist elites have ever increasingly abused everything in their path, laws or not. The
largest and most egregious violator of plundering the nation's wealth has of course been our
friendly un-Federal Reserve, an entity not commonly thought of as a "corporation", but it is in
fact a branch of the British /Rothschild's privately owned central banking system around the
world, a.k.a. the Bank of International Settlements. This entity is the godfather of the entire
central banking system. It controls the flow of money around the world in most respects, as is
explained elsewhere.
As their final push for total control is almost complete, the globalists already have
numerous, far reaching "free trade treaties" like the TPP, GATT, NAFTA, SPP, CATFA, PNTR, TAFTA
and a myriad of past trade treaties already in place all around the world. Such complicated
agreements are drawn up by the banker hired trade attorney's whom draft up legalese that few
besides them can decipher, purposely. Often being thousands of pages long, members of Congress
are rarely given enough time or energy to read these behemoth agreements.
The end game is to meld these varying trade agreement into just 4 major regional master
agreements that will cover the entire planet. The most ominous example of late is the TTIP (a
companion agreement to the TPP), standing for the "Transatlantic Trade and Investment
Partnership" which is being implemented. It is a trade deal that melds together the American
TPP and the European Union. The TPP is the big daddy that drives even more American jobs
offshore. It dwarfs what NAFTA was in scope. Officials claim it is drafted to "provide
multilateral economic growth." Growth for who I ask?
During President John F. Kennedy's speech about "All boats rising" , he was not talking
about pure, unfettered capitalism to achieve that goal, but a more restrained, less
concentrated type of democratic capitalism perhaps, combined with proper laws that kept it from
abusing human rights while protecting good jobs. He knew too that if we could get rid of the
private Federal Reserve system, America could retake the powers over its money creation,
thereafter ridding ourselves paying interest on our debts while slowly become debt free!
President Trump has taken a tough, nationalistic fair play stance on the extremely unfair
tariff disparities that current exist between countries that import their products into the
U.S. and the high tariffs that America pays to those same countries when shipping to them. For
instance, for years America has only
charged a 2.5% tariff to import cars to China. He persuaded China to lower their 25% tariff
down to 15% effective July 2018. Canadian President Trudeau has been told to expect his tariffs
to be raised to 25% on many items. Mexico will be handing over many concessions as well within
the new NAFTA agreement under a new name. Of course, that will likely entail negotiations, but
the result is the same. Good news for America! Other deals are in the making to create a fair
playing field finally! Since when have we had a president that was not part of the good old
globalist boy's club?
Trump promises a lot of things and I am sure he is doing his best. Whatever political
persuasion you are, remember he is still our President and give him the respect he deserves as
leader of the greatest country on earth. Not perfect for sure, but he and the country don't
stand a chance of maintaining the freedoms we have enjoyed for two centuries if sanity does not
return to sound policies on borders, government spending, setting priorities that are more
nationalistic in nature and much more. We must stop the far leftist, sometimes communist
extremist groups right here in the United States who have been playing Americans as fools with
their stealthy tactics that mislead their followers using created crises and panics (the 2018
fake news event on illegal children kept in cages (hiding the fact that the photo was from back
in 2014 during Obama's term) all the while blaming Trump! Once Americans understand who backs
these slickly nefarious and anti-American stand-ins, the easier it will be to ban the evil
George Soros and his Open Society Foundation out of America! Proofs abounds to this man's evil
deeds, in 2018 Soros was banned from operating in his own native country Bulgaria! They know
how evil he is. Americans should wake up and learn about this $50 billion dollar anti-American
butches, self-promoter who is busy facilitating the one-world order with his billions at every
turn!
.2
POLITICALLY-CORRECT
MALEDUCATES
The years 2017-2020 will be a time that the leftists and the deep state government push
harder than ever before in history to squelch free speech, push the pc agenda, and spy on us.
Even with Pres. Trump cleaning house, we see instances of free speech being squashed more and
more so not only in America, but within countries all around the globe. This is the silencing
of the opposition to the new world order with politically correct speech derived from the
cultural Marxism revolution that came out of the Frankfurt School and flowed into our
universities as I elaborate elsewhere.
In August of 2018 it was the popular Infowars and Alex Jones broadcasts that were suddenly
banned in one fell swoop by Facebook, YouTube and just about every other social media behemoth.
A huge surprise for those who orchestrated this coupe` was that Jones gained 5 million viewers
overnight! An obvious blowback from all the negative lies about him. Whether you like him or
not is not the issue here. This is a slippery slope towards total censorship of any and all who
reject the official lines that the big state expects out of its citizens. This is only the
beginning. So lets get this right folks! Should these powerful and quasi private controllers of
information be able to gang up literally overnight in a coordinated effort and be able ban
anyone who they, (under orders of higher ups and deep state operatives) deem to be unfit to
talk to a willing public? Lest we not forget that we all share an on and off button! This is a
slippery slope to controlling news ala communist control tactics. This incident is the tip of
the iceberg folks! This is the first major effort, and possible win, for the one world order
tyrants operated by the Deep State and Shadow Government. The next calculated guess is that
Jones and others will be falsely and purposely implicated in serious and dangerous deeds, even
upon newscasters of the msn who have shown hate towards Jones. This is called a false flag
event meant to get rid of people like Jones by defaming the person. Jones is just an example of
what is to come. The Deep State and CIA have a long record of successfully carrying out these
covert types of operations.
Furthermore, Google, with its unmatched and fully proprietary informational control systems,
as well as becoming a single source military contractor for our military and all computer
system functions of such, is now a permanent and unabated partner with the U.S. Military, State
Department and much more as can be imagined. Without Google secret technologies, our military
would be impotent to defend America. This is just how important Google. Similarly, it is not
just a coincidence why most all large data and computer technology firms in Silicon Valley are
enjoying the highest growth and profitability numbers of all the fields out there today.
The above social media heads of companies are overwhelmingly quite frank about their one
world socialism philosophy. That is, as long as they don't have to be simple follower and can
continue to be a major profiteer in the coming corporate socialism world to come. What better
way to achieve an otherwise illogical idea as one worldism? Dumbing down with one source
informational news sources should work! China is using it now. With constant day in, day out
big state programming of news and opinions, (while offering incentives for good followers of
the state lines), China is far ahead of America. As one might admit, the many different
silencing techniques used for many years upon the public is having a profound affect upon how
the world sees their world!
Reporters Without Borders is a group that monitors freedom of press around the world. Around
2015 it took notice of Obamas administration in its quick stifling of the press. What did they
find? Since Obama's administration, freedom of press had dropped from 32 nd to 46 th among the
180 countries measured. This is from the same Obama that had promised his would be the "most
transparent" administration in American history. Presidential candidate Donald Trump learned
the hard way that saying the wrong thing could come at a high cost. Example: South American
Univision's airings of his upcoming Miss America pageant was threatened by that leftist media
outlet. His sin was saying that he wanted to build a wall along the length of the Mexican
border. Eventually he worked it all out, but it just shows how the big networks try to control
anyone who bucks their agenda of open borders and one world agenda. What happened to free
press? The globalist owned media's really do have immense sway as to what can be said, or
they'll make sure you pay a price! Many accuse these liberal universities as a leading force
toward the "standardization of culture." This term is their plan to squelch real free speech
and regional cultures in exchange for their one size fits all global world and singular rules
on conduct for all. It is in its essence Cultural Marxism.
"... By Marshall Auerback, a market analyst and commentator. produced by Economy for All , a project of the Independent Media Institute ..."
"... Doing Capitalism in the Innovation Economy ..."
"... When the government subsidize R&D here, what reason would there be for the resultant products that come from that R&D, be made here? In Canada the SRED (Scientific Research and Experimental Development) tax credits are used by companies to develop products that are then manufactured in China. No Canadian production worker will ever see an hour of labor from those subsidies. That result is baked into the R&D cake. ..."
"... As you point out, "many of the large International Corporations moved their software development and R&D offshore too". What stops them from co-mingling the subsidies and scamming the system for their benefit, since everything done to favor big business resolves to a scam on the peasants. ..."
Posted on
November 5, 2019 by Yves SmithBy Marshall Auerback, a
market analyst and commentator. produced by Economy for All , a project of the
Independent Media Institute
National industrial policy was once something you might read about in today's equivalent of
a friend's Facebook post, as hard as that might sound to believe. It was in newspapers; it was
on the radio. Taxi drivers had opinions about it. That all changed in the last 35 years, when
the rise and fall of the stock market and a shallow conversation about unemployment rates took
over. Industrial policy became an inside-baseball conversation, and to the extent that it was
discussed, it was through the prism of whether it imperiled the golden gospel and great
economic distraction of our time, "the free market."
The decades of free-market propaganda we've been exposed to are basically an exercise in
distracting the public from the meaningful choices that are now made behind closed doors. The
two big political parties that outwardly represent symbolic issues like gun rights and school
prayer spend the bulk of their time and political energy on complex industrial and regulatory
questions.
But much like Nero fiddling while Rome burned, they'd better start considering the question
of a national industrial policy before there's no industry left to manage. Manufacturing is now
at its smallest share of the U.S. economy in 72 years,
reports Bloomberg . Multinational supply chains undermine the negotiating power of workers,
thereby exacerbating inequality.
Are there ways to bring back manufacturing, or should we just capitulate to a mindset that
argues that these jobs are gone for good, that software retention is good enough, even as we
shift what's left of our manufacturing sector overseas to sweatshop economies? That seems
short-sighted. After all, it's pretty easy to steal IP; it's not so easy to steal an auto
manufacturing facility. The real question is: In the absence of some sort of national
industrial strategy, how do Western societies retain a viable middle class?
Decades of American middle-class exposure to favor China and other Asian countries'
industrial capacity have foisted it right back from elite circles into our politics and the
ballot box, in spectacular fashion, through the unlikely Donald Trump, who, in his typically
blunderbuss fashion, has called attention to some serious deficiencies in our current
globalized system, and the competitive threat posed by China to which we have remained
oblivious for all too long.
Not that Trump's 19th-century protectionism represents the right policy response, but his
concerns about Beijing make sense when you compare how much China invests in its own industrial
base relative to the U.S.: Robert D. Atkinson and Caleb Foote of the Information Technology and
Innovation Foundation
write that a recent Harvard Business School "
study estimated that the Chinese governments (national, provincial, and local) paid for a
whopping 22.2 percent of business R&D in 2015, with 95 percent of Chinese firms in 6
industries receiving government cash -- petrochemicals, electronics, metals and materials,
machinery and equipment, pharmaceuticals and biotechnology, and information technology."
In addition to the direct government grants on R&D, Atkinson and Foote
estimate that "the Chinese R&D tax credit is between 3
and 4.6 times more generous than the U.S. credit. To match China's R&D tax credit
generosity, the U.S. rate for the Alternative Simplified Credit would have to be increased from
14 percent to between 35 and 40 percent." Atkinson and Foote also
note that "
97 percent of American federal government funding went to just three sectors:
transportation equipment, which includes such as fighter jets, missiles, and the like ($14
billion); professional, scientific, and technical services ($5 billion); and computer and
electronic products ($4 billion)."
Taken in aggregate,
Atkinson and Foote calculate that "nearly 25 percent of all R&D expenditures in China
come in the form of government subsidies to firms." That's the sort of thing that must enter
the calculations of antitrust advocates when they call for breaking up big tech, without
considering the ramifications to research and development, especially relative to their Chinese
counterparts. (Statistically, as Anne
Marie Knott and Carl Vieregger find in a 2016 paper "Reconciling the Firm Size and Innovation
Puzzle," there are ample studies illustrating that R&D spending and R&D
productivity increase with scale.)
Why does this matter? Robert Kuttner,
writing at the Huffington Post at the inception of Barack Obama's presidency, made a
compelling argument that many of America's great industrial enterprises did not simply spring
up spontaneously via the magic of the "free market":
American commercial leadership in aerospace is no naturally occurring phenomenon. It
reflects trillions of dollars of subsidy from the Pentagon and from NASA. Likewise, U.S.
dominance in pharmaceuticals is the result of government subsidy of basic research, favorable
patent treatment, and the fact that the American consumer of prescription drugs is made to
overpay, giving the industry exorbitant profits to plow back into research. Throwing $700
billion at America's wounded banks is also an industrial policy.
So if we can have implicit industrial policies for these industries, why not explicit
policies to rebuild our auto industry, our steel industry, our machine tool industry, and the
industries of the next century, such as green energy and high-speed rail? And why not devise
some clear standards for which industries deserve help, and why, and what they owe America in
return?"
In fact, Kuttner describes a problem that well preceded Barack Obama. America's belief in
national industrial planning has been undermined to the extent that the U.S. began to adhere to
a doctrine of shareholder capitalism in the 1980s and beyond, a philosophy that minimized the
role of the state, and gave primacy to short-term profitability, as well as production growth
through efficiency (i.e., downsizing) and mergers. Corporate prioritization of maximizing
shareholders' value and the ways American corporations have minimized long-term R&D
expenditures and capital investment, all of which have resulted in the "unproductive disgorging
of corporate cash profits -- through massive dividend payouts and unprecedented spending on
stock repurchases -- over productive investment in innovation," write
Professors Servaas Storm and C.W.M. Naastepad .
Although European companies have not gone quite as far down that route, their "stakeholder
capitalism" culture has been somewhat subverted to the same short-term goals as their American
counterparts, as evidenced via Volkswagen's emissions
scandal and the erosion of workers' rights via the
Hartz labor "reforms" (which actually undermined the unions' stakeholder status in the
companies, thereby freeing up management to adopt many of the less attractive American
shareholder capitalism practices). The European Union too is now belatedly
recognizing the competitive threat posed by China . There's no doubt that the European
political classes are also becoming mindful that there are votes to be won here as well, as
Trump correctly calculated in 2016.
In the U.S., industrial policy is increasingly finding advocates on both the left (Elizabeth
Warren's policy director,
Ganesh Sitaraman ) and the right (
Professor Michael Lind ), via the convenient marriage of national security considerations
and with international investment and trade. If trade policy is ultimately subordinated to
national security concerns, it is conceivable that industrial policy could be
"bi-partisanized," thereby giving primacy to homegrown strategic industries necessary to
sustain viable national defense and security.
But this approach is not without risks: it is unclear whether the "national
security-fication" of the industrial policy renaissance will actually enhance or hinder
creativity and risk-taking, or merely cause these firms to decline altogether as viable
civilian competitors vis a vis Beijing. The
current travails of Boeing provide a salutary illustration of the risks of going too far
down the Pentagon rat hole.
And there are a number of recent studies illustrating that the case for "dual-use" (i.e.,
civilian and military) manufacturing does not substantially enhance civilian industrialization
and, indeed,
may retard overall economic growth. On the other hand, as the venture capitalist William
Janeway highlights in his seminal work, Doing Capitalism in the Innovation Economy , there are advantages at times to
being
"[d]ecoupled from any direct concern with economic return [It allowed] the Defense Department
[to] fund numerous alternative research agendas, underwriting the 'wasteful' search for
solutions that inevitably accompanies any effort to push back the frontiers of knowledge." So
there's a balance to be struck here. But, as Janeway notes
, "the strategic state interventions that have shaped the market economy over generations have
depended on grander themes -- national development, national security, social justice,
liberation from disease -- that transcend the calculus of welfare economics and the logic of
market failure."
Furthermore, to the extent that national security considerations retard offshoring and
global labor arbitrage, it can enhance the prospects for a viable form of "
national developmentalism ," given that both mean tighter labor markets and higher wages,
which in turn will likely push firms toward upgrading R&D spending in order to upgrade on
the high end of the technology curve ( as Seymour
Melman argued years ago ), as well as enhancing productivity gains.
As author Ted Fertik observes :
Higher productivity makes possible more generous welfare states, and helps national
industries compete to supply the world with high-tech products. If technological leadership
and a prosperous, patriotic citizenry are the surest guarantees of military preponderance,
such an economic policy represents the best military strategy in an era of great power
competition.
Both the left and the right are beginning to recognize that it makes no sense to make war on
wage-earners while claiming to protect the same wage earners from Chinese competition. But
governments need to do more than act as a neutral umpire, whose role never extends beyond
fixing market failures. As Janeway has
illustrated , governments have historically promoted the basic research that fueled
innovation and nurtured the talent and skills that "became the foundation of the Innovation
Economy"; "the central research laboratories of the great corporations were first supplemented
and then supplanted by direct state funding of research." But in spite of providing the
foundational research for a number of leading commercial products (e.g., Apple's iPhone), the
government has proved reticent in considering alternative forms of ownership structure (e.g., a
" government
golden share ," which gives veto rights on key strategic issues, such as relocation,
offshoring, special voting rights, etc.), or retaining intellectual property rights and
corresponding royalty streams to reflect the magnitude of their own R&D efforts, as
Professor Mariana Mazzucato
has proposed in the past . At the very least, we need to consider these alternative
ownership structures that focus entrepreneurial development on value creation, as opposed to
capitulating to the depredations of rentier capitalism on the spurious grounds that this is a
neutral byproduct of the market's efficient allocation of resources.
Within the U.S., national industrial policy also suits green advocates, such as Senator
Bernie Sanders, whose Green
New Deal plan , while failing to address domestic/local content, or manufacturing in the
broadest possible sense, at least begins to move the needle with regard to the federal
government building and owning a national renewable grid.
Likewise in Europe, German Economy Minister Peter Altmaier recently published a "
National Industrial Strategy 2030 ," which,
according to Dalia Marin of Bruegel think tank in Brussels , "aims to protect German firms
against state-subsidized Chinese competitors. The strategy identifies key industrial sectors
that will receive special government support, calls for establishing production of electric-car
batteries in Europe, and advocates mergers to achieve economies of scale." It is striking that
EU policymakers,
such as Lars Feld of the German Council of Economic Experts , still apparently think it is
a protectionist step too far to consider coordinating with the car companies (where there is
already a high degree of trans-European policy coordination and international consolidation),
and other sectors, to help them all at the same time --
as Beijing is now doing . Of course, it would help to embed this in a manufacturing-based
Green New Deal, but it represents a healthy corrective to offshoring advocates who continue to
advocate that their car industry should migrate to China,
on the short-term grounds of cost consideration alone .
Essentially, the goal should be to protect the industries that policymakers think will be
strategically important from outsiders, and to further integrate with allies and partners to
achieve efficiencies and production scale. (Parenthetically, it seems particularly perverse
right at this juncture for the UK to break away from all this continental European integration,
and to try to go it alone via Brexit.) The aim should not be to protect private rent-seeking
and increasing private monopolization under the guise of industrial policy, which, as Dalia
Marin
notes , is why EU Competition Commissioner Margrethe Vestager
blocked the proposed merger between France's Alstom and Germany's Siemens. The two
companies "rarely compete with CRRC in third countries, because the Chinese company mainly
focuses on its home market." Hence, the grounds for creating "
heavyweight champions " was really a cover for developing an oligopoly instead.
Much of the focus of negotiation in the seemingly endless trade negotiations between the
U.S. and China has been on American efforts to dismantle the wave of subsidies and industrial
support that Beijing furnishes to its domestic industries. This seems both unrealistic as well
as being the exact opposite of what the U.S. should be doing if it hopes to level, or at least
carve up, the playing field.
Likewise, the problem in both the EU and the U.S. is not the size of these companies
generated by national developmentalism, but a size-neutral form of national regulation that
precludes these companies from stifling competition. The goal of a truly successful and
workable industrial policy should be to create an environment that supports and sustains value
creation and that socializes the benefits of the R&D for society as a whole, rather than
simply licensing it or selling it on to private companies so that it just becomes a vehicle
that sustains rent extraction for private profits alone.
We are slowly but surely starting to move away from market fundamentalism, but we still have
yet to make the full conceptual leap toward a sustainable industrial policy that creates an
economy for all. At least this is now becoming a fit discussion as far as policy making goes,
as many of the neoliberal shibboleths of the past 40 years are gradually being reconsidered and
abandoned. That is a start.
Repressed consumption in a few countries with sustained huge current account surpluses
naturally drives manufacturing outside the US (and other deficit countries). Interestingly,
Pettis says that those imbalances manifest today, not as a conflict between surplus/deficit
countries, but between economic sectors: bankers and owners in surplus/deficit countries vs.
the rest. According to Pettis this can be addressed internally in the US by tackling income
inequality: Tax transfers, reduced health care & educational costs, raising minimum wages
and giving negotiating power to unions. BUT BEFORE DOING THAT, THE US SHOULD IMPOSE CONTROLS
ON FOREIGN CAPITAL INFLOWS (by taxing those) INSTEAD ON TARIFFS ON FOREIGN PRODUCTS. From the
article:
It would have the additional benefit of forcing the cost of adjustment onto banks and
financial speculators, unlike tariffs, which force the cost onto businesses and
consumers.
If the US ever does this, other deficit countries, say the UK, France or Spain for
instance, should do exactly the same, and even more abruptly if these don't want to be awash
with foreign capital inflows and see inequality spiking even further.
It is financialization which is causing this. Please read Michael Hudson. As he has
pointed out it is financialization that is key. There is a reason his book was titled
"Killing the Host". Boeing's decline is also because of financialization. https://evonomics.com/hedge-fund-activists-prey-companies/
How Hedge Fund Activists Prey on Companies
Private equity and hedge are responsible for US manufacturing decline since the 1980s,
along with desire not to innovate-example why Deming's advice ignored by US automakers and
absorbed by the Japanese-who then clobbered the US automakers.
Hudson also knows that rising expenses for homeowners reduced their consumption capacity.
A main cause is rise in housing costs, education, and health.
Melman's main message is that focus on national security destroyed civilian sector. Today
most of US Govt R&D spending still in defense sector, while R&D disappearing in
private sector because of financialization.
Industrial strategy is useless for US unless housing costs come down, unless robots are
used. Hudson has already pointed out US cannot compete with Germany because of housing cost
differences. As Carl Benedikt Frey who focusses on tech has pointed out Midwest revolt was
because most automation was there.
"Frey argues that automation, or what he calls the third industrial revolution, is not only
putting jobs at risk, but is the principal source of growing inequality within the American
economy."
https://nationalinterest.org/feature/technology-trap-more-automation-driving-inequality-89211
" there are more robots in Michigan alone than in the entire American west. Where
manufacturing jobs have disappeared is also where US dissatisfaction is the greatest" https://voxeu.org/article/automation-and-its-enemies
Automation and its enemies
Carl Benedikt Frey, Ebrahim Rahbari 04 November 2019
I don't know that it's so much"free markets," as the financialization of the economy,
where money has mutated free a medium of exchange and necessary tool, to the end goal of
creating as much notational wealth, as the purpose of markets.
Money largely functions as a contract, where the asset is ultimately backed by a debt. So in
order to create the asset, similar amounts of debt have to be generated.
For one thing, it creates a centripedial effect, as positive feedback draws the asset to the
center of the community, while negative feedback pushes the debt to the edges. Since finance
functions the value circulation mechanism of society, this is like the heart telling the
hands and feet they don't need so much blood and should work harder for what they do get. The
Ancients used debt nubiles to reset this process, but we lack the long term perspective.
The other consequence is the government has been manipulated into being debtor of last
resort. Where would those trillions go otherwise and could Wall Street function without the
government soaking up so much excess money. The real elephant in the room is the degree
public debt backs private wealth.
Further note; Since this borrowed money cannot be used to compete with the private sector
for what is a finite amount of profitable investments, it is used to blow up whatever other
countries incur the wrath of our despots.
As Deep Throat explained, if you want to know what's going on, follow the money.
Whenever I see the term "free markets" bandied about I know it's a framing that fits an
ideology but in no way fits the actual facts.
Just like we now have two criminal justice systems, we now have two market systems: crony
capitalism, and actual capitalism.
Crony capitalism is for Exxon Mobil; Verizon; Amazon; Raytheon; JP Morgan. Actual
capitalism is reserved for the plebes, who get "creative destruction". Mom slipped and fell;
the hospital bill arrived and there wasn't enough cash; so they took the house.
It's the obverse of the "socialism" argument. We have socialism across the length and
breadth of the economy: more Federal dollars are spent subsidizing fossil fuels than are
spent educating children. But heaven forbid Bernie should utter the "S" word, because he's
talking about the kind of socialism for you and me.
The problem is avoiding that us versus them polarity and show why what is going on is BS.
That the markets NEED government debt to function and then waste that collective value. Not
that government is some old nanny, trying to quell the 'animal spirits" of the market.
Maintaining infrastructure just isn't as glamorous as guns and bombs. Probably doesn't
threaten to kill you, if you don't give it the money, either.
It should be obvious to most that simply pouring more vodka into the punch bowl does not
create a healthy economy, just a bunch of vultures picking at the carcass.
Finance does function as the circulation mechanism of the body of the community, just as
government, as its executive and regulatory function, is the central nervous system. We had
private government before, called monarchy. Now finance is having its 'let them eat cake'
moment.
As a medium, money is a public utility, like that other medium of roads. You can have the
most expensive car out there, but you still don't own the road.
It's not that society should be either private, or public, but an intelligent mix of
both.
Just winging it a bit here but perhaps it might be an idea to map out money flows to help
decide how to strengthen America's industrial health. As an example, it might be time to end
some subsidies. I understand that there are deliberate tax breaks for corporations that move
their manufacturing overseas. Cut them now for a start. Yeah, I know. Closing the barn door
too late.
To free up cash for R&D, turn back the clock to 1982 and make stock buybacks once more
illegal. Give tax credits to companies that pay for a younger generation of machinist's
education. Have the Federal government match dollar-for-dollar money spent on R&D. If the
government really wants to free up resources, bring out a law that says that it is illegal
for the government to give any subsidies for any corporation with a net worth of $1 billion
or more.
But we all know that none of this will ever happen as there are far too many rice bowls
involved for this to be done – until it is too late. Oh well.
"I understand that there are deliberate tax breaks for corporations that move their
manufacturing overseas. Cut them now for a start. Yeah, I know. Closing the barn door too
late."
Better late than never!
Personally, I think that is the only way to get a handle on this situation – Change
the tax laws.
1. Designate industries as targets to retain/recreate significant manufacturing capability
in the US – semiconductors, flat screens, solar panels, and pharmaceuticals come to
mind. Give them preferential protection with quotas, tariffs etc. instead of just shotgun
tariffs. These industries should be forward looking instead of recreating mid 20th
century.
2. Integrate this into NAFTA and maybe add Central American countries to it. If we need to
use cheap labor, then do it in countries that otherwise provide illegal immigrants to us to
build up their economies. Far better than sending the jobs to China, a major global
competitor.
3. Fund big science such as NASA etc. A lot of discoveries come out that can then be
commercialized with manufacturing inside the US and NAFTA.
It's very refreshing to read articles of this kind. Thank you.
I'm recently retired and my career consisted of a healthy portion of managerial and
executive responsibilities as well as a long denouement of flat out proletarian,
worker-drone, pseudo-Taylorized work. (Think Amazon but not at Amazon.) I've experienced, in
some detail, what I consider to be both sides of the post WWII dynamic as it relates to
technology and who controls the shop floor. Now that I have some time on my hands I've
decided to see if I can better understand what appears to be a central contradiction of
modern industrial practice and especially what I believe to be misguided efforts by
non-industrial corporations to employ industrial-work-process techniques in day-to-day
practice.
It does seem to me that we can do a lot better. A well developed industrial policy should
include both a strategy for improving our productive capacity while simultaneously more
fairly distributing the fruits of productivity more broadly throughout the population.
This article and the comments are very helpful in pointing the way.
For those who have used up their free access to Foreign Policy there's a non-paywalled
version of the Pettis article on the Carnegie endowment website.
There is so much to like in this post I am going to concentrate on the few points with
which I had problems:
1. Any time I hear an economist bemoaning policies which "may retard overall economic
growth." I am tempted to just tune out. 'nega-growth', a variant of Amory Lovins'
'Nega-Watts' maybe. But surely not more military Keynesianism, speeded up planned
obsolescence and just plain junk!
2. Then there is "the convenient marriage of national security considerations and with
international investment and trade." If national security considerations involve insuring
circuit boards for more exceptional (SIC) fighting machines like the F35 or for that matter
more hydrogen bombs that might actually work, count me out. OTOH if they include, for
example, insuring the country has the capability to produce its own medicines and generally
any of the goods and services required for national survival, sign me up.
(national security) Then there is 'climate change', brought to us by Exxon Mobile and the
century-long pursuit of
The Prize in the Middle Eastern deserts.
An anecdote regarding this free market for everything all the time mentality –
My small city's council recently debated whether to pay several tens of thousands of
dollars for a "branding" campaign with a PR/marketing company who in the past has dealt with
Conde Nast, so read high end clientele. My better half, who is a councilor, argued that
spending all that $$$ to attract more tourists wasn't the best use of the city's funds and
that we weren't a "brand" to begin with, but a city. We've already had big problems will
illegal Airbnb's removing significant amounts of housing from the market and housing costs
have skyrocketed in recent years while wages, of course, have not. The city had until
relatively recently been a blue collar suburb but that has changed rapidly. My wife tried to
make the case that the result of this "branding" was likely to push housing costs even higher
and push more long time residents right of of town. The council is pretty liberal, whatever
that means these days, and I don't believe there is a pro-business Republican among them. She
was still on the losing end of a 6-1 vote in favor of the "branding".
Very good article, however I don't think trying to bring manufacturing back by framing it
in terms of 'national security' is a good idea. Although the idea itself is correct,
explicitly promoting it this way would just hand more power over to the national security
industry and that has not served us well at all in the last two decades.
This was a great summary of rational thinking. Thank you MA. I've been almost depressed
this last year or so by the relentless undermining of national sovereignty. Trying to replace
it with everything from global supply chains to the ECB to Brexit-free-trade (even without
Europe) to private property rights to you name it. Sovereignty is a very basic thing –
we agree to it like we agree to our currency. And by that agreement we certainly imply an
"Industrial Policy to create an economy for all." How this wisdom got systematically
gaslighted is a whole nuther story. I'm glad China didn't get hooked.
Apparently, Americans don't need flag-making jobs as they will not Make America Great.
Trump campaign making banners in China – moving fast to beat tariffs deadline. Although
there is the possibility that these are for domestic consumption in China to help rally
Chinese hackers to the cause of supporting the Trump campaign, including voting for Trump.
That would prove there is No Collusion with Russia.
This post started off suggesting it's time to toss the "the free market" and I would add
that it's time to toss "free trade/globalization" too, but it shifted to discussions of
R&D spending, cautions to anti-trust advocates, and considerations of industrial policy
and national security.
If R&D spending and productivity increase with scale, and many sectors of the US
economy are dominated by a handful of large International Corporations does that mean that US
R&D spending and productivity are close to full-scale -- as are the Corporations? How
does scaled-up R&D spending reconcile with "massive dividend payouts and unprecedented
spending on stock repurchases" and the Corporate prioritization of "short-term
profitability"? Should I read the claims about how R&D spending and productivity increase
with 'scale' to mean the scale of the R&D spending -- not the scale of the firm? If so
what sort of calculations should be made by "antitrust advocates when they call for breaking
up big tech" if I separate the scale of a firm from the scale of the R&D spending? Does
it matter where the R&D is done? Haven't many of the large International Corporations
moved their software development and R&D offshore too? ["Software retention"? -- What
"software retention"?]
"Likewise, the problem in both the EU and the U.S. is not the size of these companies
generated by national developmentalism, but a size-neutral form of national regulation that
precludes these companies from stifling competition." What sort of industrial policy will
compel International Cartels to play nice with domestic small and medium-sized businesses?
Will that industrial policy be tied with some kind of changes to the 'free market' for
politicians, prosecutors, courts, and regulators?
If we sell it here, but we don't make it here any more then what kind of industrial policy
will rebuild the factories, the base of industrial capital, skills, and technical know-how?
It will take more than trade disputes or currency rate of exchange tricks, or R&D
spending, or targeted spending on a few DoD programs to rebuild US Industry. Shouldn't an
industrial policy address the little problem of the long distance splaying of industries
across seas and nations, the narrowing and consolidation of supply chains for the parts used
the products still 'made in the usa'? If the US started protecting its 'infant industry' I
think that might impact the way a lot of countries will run their economies. This would
affect a basis for our international hegemony. And if we don't protect our industry, which
will have to be re-built and raised from the razed factory buildings scattered around this
country, how would it ever reach the size and complexity needed to prosper again?
When the government subsidize R&D here, what reason would there be for the
resultant products that come from that R&D, be made here? In Canada the SRED (Scientific
Research and Experimental Development) tax credits are used by companies to develop products
that are then manufactured in China. No Canadian production worker will ever see an hour of
labor from those subsidies. That result is baked into the R&D cake.
As you point out, "many of the large International Corporations moved their software
development and R&D offshore too". What stops them from co-mingling the subsidies and
scamming the system for their benefit, since everything done to favor big business resolves
to a scam on the peasants.
"... Robert Pfaller: Until the late 1970s, all "Western" (capitalist) governments, right or left, pursued a Keynesian economic policy of state investment and deficit spending. (Even Richard Nixon is said to have once, in the early 1970ies, stated, "We are all Keynesians"). This lead to a considerable decrease of inequality in Western societies in the first three decades after WWII, as the numbers presented by Thomas Piketty and Branko Milanovic in their books prove. Apparently, it was seen as necessary to appease Western workers with high wages and high employment rates in order to prevent them from becoming communists. ..."
"... Whenever the social-democratic left came into power, for example with Tony Blair, or Gerhard Schroeder, they proved to be the even more radical neoliberal reformers. As a consequence, leftist parties did not have an economic alternative to what their conservative and liberal opponents offered. Thus they had to find another point of distinction. This is how the left became "cultural" (while, of course, ceasing to be a "left"): from now on the marks of distinction were produced by all kinds of concerns for minorities or subaltern groups. And instead of promoting economic equality and equal rights for all groups, the left now focused on symbolic "recognition" and "visibility" for these groups. ..."
"... Thus not only all economic and social concerns were sacrificed for the sake of sexual and ethnic minorities, but even the sake of these minorities itself. Since a good part of the problem of these groups was precisely economic, social and juridical, and not cultural or symbolic. And whenever you really solve a problem of a minority group, the visibility of this group decreases. But by insisting on the visibility of these groups, the policies of the new pseudo-left succeded at making the problems of these groups permanent – and, of course, at pissing off many other people who started to guess that the concern for minorities was actually just a pretext for pursuing a most brutal policy of increasing economic inequality. ..."
"... The connection to neoliberalism is the latter's totalitarian contention of reducing the entirety of human condition into a gender-neutral cosmopolitan self expressing nondescript market preferences in a conceptual vacuum, a contention celebrated by its ideologues as "liberation" and "humanism" despite its inherent repression and inhumanity. ..."
"... "..'identity politics,' which pretty much encapsulate the central concerns of what these days is deemed to represent what little of the 'left' survives, plays into the hands of the neoliberal ruling establishment(s), because at bottom it is a 'politics' that has been emptied of all that is substantively political.." ..."
"... Agreed. And the truth is that the message is much clearer than that of the critics, below. So it ought to be for the world, sliding into fascism, in which we live in might have been baked by the neo-liberals but it was iced by 57 varieties of Blairites . The cowards who flinched led by the traitors who sneered. ..."
"... 'identity politics,' which pretty much encapsulate the central concerns of what these days is deemed to represent what little of the 'left' survives, plays into the hands of the neoliberal ruling establishment(s), because at bottom it is a 'politics' that has been emptied of all that is substantively political, namely, the fight for an equitable production and distribution of goods, both material and cultural, ensuring a decent life for all. ..."
"... Why bother getting your hands dirty with an actual worker's struggle when you can write yet another glamorously "radical" critique of the latest Hollywood blockbuster (which in truth just ends up as another advert for it)? ..."
"... The One Per Cent saw an opportunity of unlimited exploitation and they ran with it. They're still running (albeit in jets and yachts) and us Proles are either struggling or crawling. Greed is neither Left or Right. It exists for its own self gratification. ..."
"... Actually, post-modernism doesn't include everybody -- just the 'marginalized' and 'disenfranchised' minorities whom Michel Foucault championed. The whole thing resembles nothing so much as the old capitalist strategy of playing off the Lumpenproletariat against the proletariat, to borrow the original Marxist terminology. ..."
"... if you don't mind me asking, exactly at what point do you feel capitalism was restored in the USSR? It was, I take it, with the first Five Year Plan, not the NEP? ..."
"... Also, the Socialist or, to use your nomenclature, "Stalinist" system, that was destroyed in the the USSR in the 1990s–it was, in truth, just one form of capitalism replaced by another form of capitalism? ..."
Robert Pfaller interviewed by Kamran Baradaran, via
ILNA
The ruling ideology since the fall of the Berlin Wall, or even earlier, is postmodernism. This is the ideological embellishment
that the brutal neoliberal attack on Western societies' welfare (that was launched in the late 1970s) required in order to attain
a "human", "liberal" and "progressive" face.
Robert Pfaller is one of the most distinguished figures in today's radical Left. He teaches at the University of Art and Industrial
Design in Linz, Austria. He is a founding member of the Viennese psychoanalytic research group 'stuzzicadenti'.
Pfaller is the author of books such as On the Pleasure Principle in Culture: Illusions Without Owners , Interpassivity:
The Aesthetics of Delegated Enjoyment , among others. Below is the ILNA's interview with this authoritative philosopher on
the Fall of Berlin Wall and "Idea of Communism".
ILNA: What is the role of "pleasure principle" in a world after the Berlin Wall? What role does the lack of ideological
dichotomy, which unveils itself as absent of a powerful left state, play in dismantling democracy?
Robert Pfaller: Until the late 1970s, all "Western" (capitalist) governments, right or left, pursued a Keynesian economic
policy of state investment and deficit spending. (Even Richard Nixon is said to have once, in the early 1970ies, stated, "We are
all Keynesians"). This lead to a considerable decrease of inequality in Western societies in the first three decades after WWII,
as the numbers presented by Thomas Piketty and Branko Milanovic in their books prove. Apparently, it was seen as necessary to
appease Western workers with high wages and high employment rates in order to prevent them from becoming communists.
Ironically one could say that it was precisely Western workers who profited considerably of "real existing socialism" in the
Eastern European countries.
At the very moment when the "threat" of real existing socialism was not felt anymore, due to the Western economic and military
superiority in the 1980ies (that led to the fall of the Berlin Wall), the economic paradigm in the Western countries shifted.
All of a sudden, all governments, left or right, pursued a neoliberal economic policy (of privatization, austerity politics, the
subjection of education and health sectors under the rule of profitability, liberalization of regulations for the migration of
capital and cheap labour, limitation of democratic sovereignty, etc.).
Whenever the social-democratic left came into power, for example with Tony Blair, or Gerhard Schroeder, they proved to
be the even more radical neoliberal reformers. As a consequence, leftist parties did not have an economic alternative to what
their conservative and liberal opponents offered. Thus they had to find another point of distinction. This is how the left became
"cultural" (while, of course, ceasing to be a "left"): from now on the marks of distinction were produced by all kinds of concerns
for minorities or subaltern groups. And instead of promoting economic equality and equal rights for all groups, the left now focused
on symbolic "recognition" and "visibility" for these groups.
Thus not only all economic and social concerns were sacrificed for the sake of sexual and ethnic minorities, but even the
sake of these minorities itself. Since a good part of the problem of these groups was precisely economic, social and juridical,
and not cultural or symbolic. And whenever you really solve a problem of a minority group, the visibility of this group decreases.
But by insisting on the visibility of these groups, the policies of the new pseudo-left succeded at making the problems of these
groups permanent – and, of course, at pissing off many other people who started to guess that the concern for minorities was actually
just a pretext for pursuing a most brutal policy of increasing economic inequality.
ILNA: The world after the Berlin Wall is mainly considered as post-ideological. Does ideology has truly decamped from our
world or it has only taken more perverse forms? On the other hand, many liberals believe that our world today is based on the
promise of happiness. In this sense, how does capitalism promotes itself on the basis of this ideology?
Robert Pfaller: The ruling ideology since the fall of the Berlin Wall, or even earlier, is postmodernism. This is the ideological
embellishment that the brutal neoliberal attack on Western societies' welfare (that was launched in the late 1970s) required in
order to attain a "human", "liberal" and "progressive" face. This coalition between an economic policy that serves the interest
of a tiny minority, and an ideology that appears to "include" everybody is what Nancy Fraser has aptly called "progressive neoliberalism".
It consists of neoliberalism, plus postmodernism as its ideological superstructure.
The ideology of postmodernism today has some of its most prominent symptoms in the omnipresent concern about "discrimination"
(for example, of "people of color") and in the resentment against "old, white men". This is particularly funny in countries like
Germany: since, of course, there has been massive racism and slavery in Germany in the 20th century – yet the victims of this
racism and slavery in Germany have in the first place been white men (Jews, communists, Gypsies, red army prisoners of war, etc.).
Here it is most obvious that a certain German pseudo-leftism does not care for the real problems of this society, but prefers
to import some of the problems that US-society has to deal with. As Louis Althusser has remarked, ideology always consists in
trading in your real problems for the imaginary problems that you would prefer to have.
The general ideological task of postmodernism is to present all existing injustice as an effect of discrimination. This is,
of course, funny again: Since every discrimination presupposes an already established class structure of inequality. If you do
not have unequal places, you cannot distribute individuals in a discriminating way, even if you want to do so. Thus progressive
neoliberalism massively increases social inequality, while distributing all minority groups in an "equal" way over the unequal
places.
MASTER OF UNIVE
Abbreviate & reduce to lowest common denominator which is hyperinflation by today's standards given that we are indeed all
Keynesians now that leveraged debt no longer suffices to prop Wall Street up.
Welcome to the New World Disorder. Screw 'postmodernism' & Chicago School 'neoliberalism'!
MOU
Danubium
There is no such thing as "post-modernism".
The derided fad is an organic evolution of the ideologies of "modernity" and the "Enlightenment", and represents the logical
conclusion of their core premise: the "enlightened self" as the source of truth instead of the pre-modern epistemologies of
divine revelation, tradition and reason.
It does not represent any "liberation" from restrictive thought, as the "self" can only ever be "enlightened" by cult-like
submission to dogma or groupthink that gives tangible meaning to the intangible buzzword, its apparent relativism is a product
of social detachment of the intellectual class and its complete and utter apathy towards the human condition.
The connection to neoliberalism is the latter's totalitarian contention of reducing the entirety of human condition into
a gender-neutral cosmopolitan self expressing nondescript market preferences in a conceptual vacuum, a contention celebrated
by its ideologues as "liberation" and "humanism" despite its inherent repression and inhumanity.
The trend is not to successor or opponent, but rather modernism itself in its degenerative, terminal stage.
Monobazeus
Well said
bevin
"..'identity politics,' which pretty much encapsulate the central concerns of what these days is deemed to represent what little
of the 'left' survives, plays into the hands of the neoliberal ruling establishment(s), because at bottom it is a 'politics'
that has been emptied of all that is substantively political.."
Agreed. And the truth is that the message is much clearer than that of the critics, below.
So it ought to be for the world, sliding into fascism, in which we live in might have been baked by the neo-liberals but it
was iced by 57 varieties of Blairites . The cowards who flinched led by the traitors who sneered.
So cutting through all of the verbiage, the upshot of Pfaller's contentions seems to be that 'identity politics,' which pretty
much encapsulate the central concerns of what these days is deemed to represent what little of the 'left' survives, plays into
the hands of the neoliberal ruling establishment(s), because at bottom it is a 'politics' that has been emptied of all that
is substantively political, namely, the fight for an equitable production and distribution of goods, both material and cultural,
ensuring a decent life for all.
Difficult not to agree.
For indeed, "If you do not have unequal places, you cannot distribute individuals in a discriminating way, even if you want
to do so."
Capricornia Man
You've nailed it, Norman. In many countries, the left's obsession with identity politics has driven class politics to the periphery
of its concerns, which is exactly where the neoliberals want it to be. It's why the working class just isn't interested.
Martin Usher
It must be fun to sit on top of the heap watching the great unwashed squabbling over the crumbs.
Red Allover
The world needs another put down of postmodern philosophy like it needs a Bob Dylan album of Sinatra covers . . .
maxine chiu
I'm glad the article was short .I don't think I'm stupid but too much pseudo-intellectualism makes me fall asleep.
Tim Jenkins
Lol, especially when there are some galling glaring errors within " too much pseudo-intellectualism "
Thanks for the laugh, maxine,
Let them stew & chew (chiu) on our comments 🙂
Bootlyboob
As with any use of an -ism though, you need sort the wheat from the chaff when it comes to using 'postmodernism'. Do you mean
Baudrillard and Delueze? or do you mean some dirty cunt like Bernard Henri-Levy. There is a bit of a difference.
Bootlyboob
Ok, so Levi is not really a postmodernist. But still, there are philosphers of postmodernism that were, and still are, worth
reading.
BigB
Postmodernism: what is it? I defy anyone to give a coherent and specific definition. Not least, because the one 'Classical
Liberal' philosopher who did – Stephen Hicks – used the term as a blanket commodification of all post-Enlightenment thought
starting with Rousseau's Romanticism. So PoMo has pre-Modern roots? When the left start playing broad and wide with political
philosophical categories too – grafting PoMo onto post-Classical roots as a seeming post-Berlin Wall emergence what actually
is being said? With such a depth and breadth of human inquiry being commodified as 'PoMo' – arguably, nothing useful.
Neoliberalism is Classic Liberalism writ large. The basic unit of Classicism is an individuated, independent, intentional,
individual identitarianism as an atom of the rational ('moral') market and its self-maximising agency. Only, the 'Rights of
Man' and the 'Social Contract' have been transfered from the Person (collectively: "We the People " as a the democratic sovereign
power) to the Corporation as the new 'Neo-Classicist' supranational sovereign. Fundamentally, nothing has changed.
As pointed out below: this was already well underway by November 1991 – as a structural-function of the burgeoning Euromarkets.
These were themselves on the rise as the largest source of global capital *before* the Nixon Shock in 1971. There is an argument
to be made that they actually caused the abandoning of Breton Woods and the Gold Standard. Nonetheless, 1991 is a somewhat
arbitrary date for the transition from 'High Modernity' to 'PostModernity'. Philosophers. political, and social scientists
– as Wittgenstein pointed out – perhaps are victims of their own commodification and naming crisis? Don't get me started on
'post-Humanism' but what does PoMo actually mean?
As the article hints at: the grafting of some subjectivist single rights issues to the ultra-objectivist core market rationality
of neoliberalism is an intentional character masking. Even the 'neoliberal CNS' (central nervous system) of the WEF admits
to four distinct phases of globalisation. The current 'Globalisation 4.0' – concurrent with the 'Fourth Industrial Revolution'
– is a further development of this quasi-subjectivist propagandic ploy. Globalisation is now humanist, sovereigntist, environmentalist,
and technologist (technocratic). Its ultimate *telos* is 'fully automated luxury communism' or the harmoniousness of man and
nature under an ecolological *Tianxia* the sustainable 'Ecological Civilisation'. Which, I would hope, absolutely nobody is
gullible enough to believe?
Who says the leopard cannot change its spots? It can, and indeed does. Neoliberalism is a big-data micromarketing driven
technocratic engine of reproduction tailored to the identitarian individual. PoMo – in one sense – is thus the logical extremisation
of Classical Liberalism which is happening within the Classical Liberal tradition. It is certainly not a successor state or
'Fourth Political Theory' which is one of the few things Aleksandr Dugin gets right.
This is why the term needs defintion and precisification or, preferably, abandoning. If both the left and right bandy the
term around as a eupehemism for what either does not like – the term can only be a noun of incoherence. Much like 'antisemitism':
it becomes a negative projection of all undesirable effects onto the 'Other'. Which, when either end of the political spectrum
nihilates the Other leaves us with the vicious dehumanisation of the 'traditional' identitarian fascist centre. All binary
arguments using shared synthetic terminology – that are plastic in meaning depending on who is using the term – cancel each
other out.
Of which, much of which is objectified and commodified as 'PoMo' was a reaction against. A reaction that anticipated the
breakdown of the identitarian and sectarian 'technological postmodern' society. So how can that logically be a 'reaction against'
and an 'embelishment to' neoliberalism'?
This is not a mere instance of pedantry: I/we are witnessing the decoherence of language due to an extremisation of generalisation
and abstraction of sense and meaning. That meaning is deferred is a post-structuralist tenet: but one that proceeds from the
extreme objectivisation of language (one to one mapping of meaning as the analytical signified/signifier relationship) and
the mathematicisation of logic (post-Fregian 'meta-ontology') not its subjectivisation.
If PoMo means anything: it is a rich and authentic vein of human inquiry that was/is a creative attempt to rescue us from
a pure objectivist Hell (David Ray Griffin's "positive postmodernism"). One that was/is not entirely satisfactory; merely because
it has not yet completed. In the midst: we have the morbid hybrid symptomatology of the old Classical Libertarian fascism trying
to recuperate the new Universal Humanism for which PoMo is a meaningless label. Especially if it is used to character masque
the perennial philosophy of Humanism that has been dehumanised and subjugated by successive identitarian regimes of knowledge
and power since forever in pre-Antiquity.
We are all human: only some humans are ideologically more human than others is the counter-history of humanity. When we
encounter such ideologically imprecise degenerative labels as 'PoMo' – that can mean anything to anyone (but favours the status
quo) this makes a nonsense of at least 5,000 years of thought. Is it any wonder that we are super-ordinated by those who can
better dictate who we are? Language is overpower and writing is supra-sovereign administration and bureaucracy over the 'owness'
of identity. Its co-option by the pseudoleft is a complete denigration and betrayal of the potential of a new Humanism. The
key to which is the spiritual recovery and embodiment of who we really are – proto-linguistically and pre-ontologically – before
all these meaningless labels get in the way.
Bootlyboob
You said it better than I ever could.
Stephen Hick's book is quite the laugh. I tried to read it but it made no sense. From memory, it starts at Kant and Hegel
and gets them completely wrong, (he even draws little charts with their ideas in tabulated form, WTF?) so I quickly deleted
the .pdf. Any book that begins with a summary of these two philosophers and then thinks they can hold my attention until they
get to their take on 'postmodernism' is sorely mistaken. Postmodernism is a made up label for about four or five French intellectuals
in the 1970's that somehow took over the world and completely fucked it up. Why do I somehow not follow this line of 'thought'?
Reg
No, Postmodernism is a real thing, it is the capitalist assimilation of situationism to overcome the crisis of profit in the
70s caused by overproduction and the attempt by the 1% to recapture a greater a greater % of GDP that they had lost due to
the post war settlement. This was an increasingly a zero sum game economy after Germany and Japan had rebuilt their manufacturing
capacity, with the US constrained by a widening trade deficit and the cost of the cold and Vietnam war increasing US debt.
The inflation spikes in the 70s is only reflective of these competing demands.
The problem of modernism is than peoples needs are easily saited, particularly in conditions of overproduction. Postmodern
production is all about creating virtual needs that are unsatisfied. The desire for status or belonging or identity are infinite,
and overcomes the dead time of 'valourisation' (time taken for investment to turn into profit) of capital by switching to virtual
production of weightless capitalism. The creation of 'intangible asset's such as trade marks, while off shoring production
is central. This is a form of rentier extraction, as the creation of a trade mark creates no real value if you have offshored
not only production but R&D to China. This is why fiance, and free movement of capital supported by monetary policy and independent
central banks are central to Postmodern neo-liberal production. The problem being that intangible assets are easy to replace
and require monopoly protection supported by a Imperial hegemon to maintain rentier extraction. Why does China need a US or
UK trade mark of products where both innovation and production increasingly come from China? How long can the US as a diminishing
empire maintain rentier extraction at the point of a military it increasingly cannot afford, particularly against a military
and economic superpower like China? It is no accident US companies that have managed to monetise internet technologies are
monopolies, google, microsoft, Apple. An operating system for example has a reproduction cost of zero, the same can be said
of films or music, so the natural price is zero, only a monopoly maintains profit.
The connection to situationism is the cry of May 68 'Make your dreams reality', which was marketised by making peoples dreams
very interesting ones about fitted kitchens, where even 'self actualisation was developed into a product, where even ones own
body identity became a product to be developed at a price. This is at the extreme end of Marxist alienation as not only work
or the home becomes alienated, but the body itself.
David Harvey covers some of this quite well in his "The condition of Postmodernity". Adam Curtis also covers quite well in
'The Trap' and the 'Century of the self'.
BigB
I'm inclined to agree with everything you write. It would fall into what I called 'precisification' and actual definition.
What you describe is pure Baudrillard: that capitalism reproduces as a holistic system of objects that we buy into without
ever satisfying the artificial advertorial need to buy. What we actually seek is a holism of self that cannot be replaced by
a holism of objects hence an encoded need for dissatisfaction articulated as dissatisfaction a Hyperrealism of the eternally
desiring capitalist subject. But Baudrillard rejected the label too.
What I was pointing out was the idea of 'contested concept'. Sure, if we define terms, let's use it. Without that pre-agreed
defintion: the term is meaningless. As are many of our grandiloquent ideas of 'Democracy', 'Freedom', 'Prosperity', and especially
'Peace'. Language is partisan and polarised. Plastic words like 'change' can mean anything and intentionally do. And the convention
of naming creates its own decoherence sequence. What follows 'postmodernism'? Post-humanism is an assault on sense and meaning.
As is the current idea that "reality is the greatest illusion of all".
We are having a real communication breakdown due to the limitations of the language and out proliferation of beliefs. Baudrillard
also anticipated the involution and implosion of the Code. He was speaking from a de Saussurian (semiologic) perspective. Cognitive
Linguistics makes this ever more clear. Language is maninly frames and metaphors. Over expand them over too many cognitive
domains: and the sense and meaning capability is diluted toward meaninglessnes – where reality is no longer real. This puts
us in the inferiorised position of having our terms – and thus our meaning – dictated by a cognitive elite a linguistic 'noocracy'
(which is homologous with the plutocracy – who can afford private education).
Capitalism itself is a purely linguistic phenomena: which is so far off the beaten track I'm not even going to expand on
it. Except to say: that a pre-existing system of objects giving rise to a separate system of thoughts – separate objectivity
and subjectivity – is becoming less tenable to defend. I'd prefer to think in terms of 'embodiment' and 'disembodiment' rather
than distinct historical phases. And open and closed cognitive cycles rather than discreet psycholgical phases. We cannot be
post-humans if we never embodied our humanism fully. And we cannot be be post-modern when we have never fully lived in the
present having invented a disembodied reality without us in it, which we proliferated trans-historically the so-called 'remembered
present'.
Language and our ideas of reality are close-correlates – I would argue very close correlates. They are breaking down because
language and realism are disembodied which, in itself is ludicrous to say. But we have inherited and formalised an idealism
that is exactly that. Meaning resides in an immaterial intellect in an intangible mind floating around in an abstract neo-Platonic
heaven waiting for Reason to concur with it. Which is metaphysical bullshit, but it is also the foundation of culture and 'Realism'.
Which makes my position 'anti-Realist'. Can you see my problem with socio-philosophical labels now!? They can carry sense if
used carefully, as you did. In general discourse they mean whatever they want to mean. Which generally means they will be used
against you.
Ramdan
"the SPIRITUAL RECOVERY and embodiment of who we really are – PROTO-LINGUISTICALLY and PRE-ONTOLOGICALLY – BEFORE all these
MEANINGLESS LABELS get in the way."
Thanks BigB. I just took the liberty to add emphasis.
Robbobbobin
Smarty pants (label).
Robert Laine
A reply to the article worthy of another Off-G article (or perhaps a book) which would include at a minimum the importance
of non-dualistic thinking, misuse of language in the creation of MSM and government narratives and the need to be conscious
of living life from time to time while we talk about it. Thankyou, BigB.
Don't you love how all these people discuss postmodernism without ever bothering to define what it is. How confused. Hicks
and Peterson see postmodernists as Neo-Marxists and this guy sees them as Neoliberals. None of the main theorists that have
been associated with Postmodernism and Post-Structuralism and I'm thinking Derrida, Baudrillard and Foucault here (not that
I see Foucault as really belonging in the group) would not even accept the term 'postmodernism' as they would see it as an
inappropriate form of stereo-typography with no coherent meaning or definition and that presupposing that one can simply trade
such signifiers in 'transparent' communication and for us all to think and understand the same thing that 'postmodernism' as
a body of texts and ideas might be 'constituted by' is a large part of the problem under discussion. I often think that a large
question that arises from Derrida's project is not to study communication as such but to study and understand miss-communication
and how and why it comes about and what is involved in our misunderstandings. If people don't get that about 'postmodern' and
post-structuralist theories then they've not understood any thing about it.
BigB
You are absolutely right: the way we think in commodities of identities – as huge generalizations and blanket abstractions
– tends toward grand narration and meaninglessness. Which is at once dehumanising, ethnocentric, exceptionalist, imperialist
in a way that favours dominion and overpower. All these tendencies are encoded in the hierarchical structures of the language
– as "vicious" binary constructivisms. In short, socio-linguistic culture is a regime of overpower and subjugation. One that
is "philosopho-political" and hyper-normalises our discrimination.
Deleuze went further when he said language is "univocal". We only have one equiprimordial concept of identity – Being. It
is our ontological primitive singularity of sense and meaning. Everything we identity – as "Difference" – is in terms of Being
(non-Being is it's binary mirror state) as an object with attributes (substances). Being is differentiated into hierarchies
(the more attributes, the more "substantial"- the 'greater' the being) which are made "real" by "Repetition" hence Difference
and Repetition. The language of Dominion, polarization, and overpower is a reified "grand ontological narrative" constructivism.
One dominated by absolutised conceptual Being. That's all.
[One in which we are naturally inferiorised in our unconscious relationship of being qua Being in which we are dominated
by a conceptual "Oedipal Father" – the singularity of the Known – but that's another primal 'onto-theocratic' narrative the
grandest of then all].
One that we are born and acculturated into. Which the majority accept and never question. How many people question not just
their processes of thought but the structure of their processes of thought? A thought cannot escape its own structure and that
structure is inherently dominative. If not in it's immediacy then deferred somewhere else via a coduit of systemic violence
structured as a "violent hierarchy" of opposition and Othering.
Which is the ultimate mis-communication of anything that can be said to be "real" non-dominative, egalitarian, empathic,
etc. Which, of course, if we realise the full implications we can change the way we think and the "naturalised" power structures
we collectively validate.
When people let their opinions be formed for them, and commodify Romanticism, German Idealism, Marxism, Phenomenology, Structuralism,
Post-Structuralism, Existentialism, etc as the pseudo-word "PoMo" – only to dismiss it they are unbeknowingly validating the
hegemony of power and false-knowledge over. Then paradoxically using those binary power structures to rail about being dominated!
Those linguistic power structures dominate politics too. The "political unconscious" is binary and oppositional which tends
toward negation and favours the status quo but how many people think in terms of the psychopolitical and psycholinguistic algorithms
of power and politics?
Derrida's project is now our project and it has hardly yet begun. Not least because cognitive linguistics were unkown to
Derrida. That's how knowledge works by contemporising and updating previous knowledge from Structuralism to Post-Structuralism
to
Nihilating anything that can be called "PoMo" (including that other pseudo-label "Cultural Marxism") condemns us to another
200 years of Classical Liberalism which should be enough impetus to compel everyone to embrace the positive aspects of PoMo!
Especially post-post-structuralism that stupid naming convention again
I think a lot of people forget that both Derrida and Baudrillard died before the financial crisis. I don't think either of
them like myself at that time paid much attention to economics and markets as they worked within very specific and focused
fields. Derrida spent his whole life analysing phonocentrism and logocentrism throughout the history of philosophy and Baudrillard
was more a cultural sociologist then anything else. They like most people assumed that neoliberalism was working and they enjoyed
well paid jobs and great celebrity so they didn't have much cause to pay that much attention to politics. Following the Invasion
of Iraq Derrida did come out very strongly against the US calling it the biggest and most dangerous rogue state in the world
and he cited and quoted Chomsky's excellent work. We should also include the UK as the second biggest rogue state.
Once the GFC happened I realized that my knowledge on those subjects was virtually zero and I have since spent years looking
at them all very closely. I think Derrida and Baudrillard would have become very political following the GFC and even more
so now given current events with the yellow vests in France. Shame those two great thinkers died before all the corruption
of neoliberalism was finally revealed. I believe that would have had a great deal to say about it Derrida at least was a very
moral and ethical man.
Bootlyboob
I think you would like this essay if you have not read it already.
If anyone wants a good overview of postmodernism and post-structuralism Cuck philosophy has has some excellent videos covering
the subject matter and ideas. He explains how postmodernism has nothing to do with identity politics and shows how Hick and
Peterson have fundamentally misunderstood postmodernism. He also has 3 videos covering postmodern basics and some others on
Derrida and Baudrillard. You will not find the concepts explained better though one can never give a comprehensive review as
such things are essentially beyond us.
He puts too much weight on Foucault for my liking but that's just the fact that my understanding of postmodernism is obviously
different to his because all of our largely chance encounters with different texts at different times, which mean that we all
come away with slightly different ideas about what these things might mean at any given time. Even in relation to differences
in our own ideas from day to day or year to year.
Bootlyboob
Yes, that's why I mentioned the article in relation to your earlier comment. I don't think any of these philosophers would
have changed their stances based on the events 20 or 30 post their deaths. They essentially predicted the course that society
has taken.
Judith Butler took part in the occupy wall street movement and she's a post-structuralist so she has clearly changed her mind
since the GFC. Deleuze may have to a certain extent have predicted such things but that doesn't necessarily mean they would
have been happy about them. Derrida always spoke of the 'democracy' to come. Instead what we are looking forward to is tech
based technocratic totalitarianism. I don't go along with Deleuze on that matter anyway. I don't see a discreet transition
from one to the other but rather see us having to endure the combined worst of both scenarios.
Bootlyboob
In relation to Peterson. I did write an email to him once and he wrote back to me saying he does indeed like the writings of
Deleuze and Baudrillard. But it was a one line response. I'm still assuming he merely uses a false reading of Derrida as a
prop to advance his own arguments.
Peterson doesn't understand that postmodernism is not the source of identity politics or cultural marxism. That source is Anglo
sociology. I was doing an MSc in sociology back in 1994/95 and they had been transitioning away from Marx and class conflict
to Nietzsche and power conflicts understood within a very simplistic definition of power as a simple binary opposition of forces
between and 'oppressor' and a 'resistor'.
They borrow a bit from Foucault but they cannot accept his postmodern conclusions as power is necessarily revealed as a
positive force that actually constructs us all: in which case one cannot really object to it on political grounds. Let's face
it, these cultural ex-Marxists (now actually an elitist Nietzschean ubermench) don't seem to object to power's miss-functioning
at all on any kind of institutional level but solely concentrate on supposed power relations at the personal level.
That's all if you buy into 'power'at all as such. Baudrillard wrote 'Forget Foucault' and that 'the more one sees power
everywhere the less one is able to speak thereof'. I try and stay clear of any theory that tries to account for everything
with a single concept or perspective as they end up over-determining and reductionist.
A major benefit (for the elites) of postmodernism is its epistemological relativism, which denies the fundamentally important
commitments to objectivity, to facts and evidence. This results in the absurd situation where all the matters is the narrative.
This obvious fact is partially obscured by the substitution of emotion for evidence and logic.
https://viewsandstories.blogspot.com/2018/06/emotion-substitutes-for-evidence-and.html
Seamus Padraig
Yup. Among other things, po-mo 'theory' enables Orwell's doublethink .
BigB
This is exactly the misunderstanding of a mythical "po-mo 'theory'" – if such a thing exists – that I am getting at. 'Po-mo
theory' is in fact a modernity/postmodernity hybrid theory. Pomo theory is yet to emerge.
For instance: Derrida talked of the 'alterity' of language and consciousness that was neither subjectivist nor objectivist.
He also spoke of 'inversion/subversion' – where one bipolar oppositional term becomes the new dominant ie 'black over white'
or 'female over male'. This, he made specifically clear, was just as violent a domination as the old normal. How is this enabling
'doublethink'.
If you actually study where Derrida, Baudrillard, Deleuze; etc where taking their 'semiotics' it was to the 'Middle Way'
of language – much the same destination as Buddhism. This is the clear and precise non-domination of either extreme of language.
Only, they never supplied the praxis; and their followers and denigrators where not as prescient.
There is so much more to come from de Saussurian/Piercian semiotics and Bergsonian/Whiteheadian process philosophy. We have
barely scratched the surface. One possibility is the fabled East/West synthesis of thought that quantum physics and neuroscience
hint at.
What yo do not realise is that our true identity is lost in the language. Specifically: the Law of Identity and the Law
of the Excluded Middle of our current Theory of Mind prevent the understanding of consciousness. To understand why you actually
have to read and understand the linguistic foundations of the very theory you have just dismissed.
Robbobbobin
"Specifically: the Law of Identity and the Law of the Excluded Middle of our current Theory of Mind prevent the understanding
of consciousness."
Yes, but. What do you mean by " our current Theory of Mind"?
Tim Jenkins
Was that a promo for Po-mo theory, BigB ? (chuckle)
BigB
In fact: if followed through – PoMo leads to the point of decoherence of all narrative constructivism. Which is the same point
the Buddhist Yogacara/Madhyamaka synthesis leads to. Which is the same point quantum physics and contemporary cognitive neuroscience
leads to. The fact of a pre-existent, mind-independent, objective ground for reality is no longer tenable. Objectivism is dead.
But so is subjectivism.
What is yet to appear is a coherent narrative that accommodates this. Precisely because language does not allow this. It
is either subjectivism or objectivism tertium non datur – a third is not given. It is precisely within the excluded middle
of language that the understanding of consciouness lies. The reason we have an ontological cosmogony without consciousness
lies precisely in the objectification and commodification of language. All propositions and narratives are ultimately false
especially this one.
Crucially, just because we cannot create a narrative construction or identity for 'reality' – does not mean we cannot experience
'reality'. Which is what a propositional device like a Zen koan refers to
All linguistic constructivism – whether objective or subjective – acts as a covering of reality. We take the ontological
narrative imaginary for the real 'abhuta-parikalpa'. Both object and subject are pratitya-samutpada – co-evolutionary contingent
dependendencies. The disjunction of all dualities via ersatz spatio-temporality creates Samsara. The ending of Samsara is the
ending and re-uniting of all falsely dichotomised binary definitions. About which: we can say precisely nothing.
Does this mean language is dead? No way. Language is there for the reclamation by understanding its superimpositional qualitiy
(upacara). A metaphoric understanding that George Lakoff has reached with Mark Johnston totally independently of Buddhism.
I call it 'poetic objectivism' of 'critical realism' which is the non-nihilational, non-solipsistic, middle way. Which precisely
nihilates both elitism and capitalism: which is why there is so much confusion around the language. There is more at stake
than mere linguistics. The future of humanity will be determined by our relationship with our languages.
vexarb
@BigB: "The fact of a pre-existent, mind-independent, objective ground for reality is no longer tenable. Objectivism is dead."
Do you mean that there is more to life than just "atoms and empty space"? Plato, Dante and Blake (to name the first 3 who
popped into my head) would have agreed with that: the ground of objective reality is mind -- the mind of God.
"The atoms of Democritus, and Newton's particles of Light,
Are sands upon the Red Sea shore, Where Israel's tents do shine so bright".
Tim Jenkins
Funnily enough, I was only writing just yesterday on OffG's 'India's Tryst with Destiny' article, just what poor standards
we have in the Education of our children today, in urgent need of massive revisions, which I've highlighted and how the guilt
lays squarely on the shoulders of Scientists & Academia in our Universities, from Physics to History & Law & the 'Physiology
of Psychology' these guys really just don't 'cut it' anymore resting on Laurels, living in Fear and corrupted by capitalism
>>> wholly !
Somebody should be shot, I say for Terrorist Acts !
Corruption is the Destruction of Culture &
"The Destruction of Culture is a Terrorist Act", now officially,
in international Law @UNESCO (thanks, Irina Bokova)
Would the author of this piece like to review & correct some obviously glaring errors ?
George
Good article. On this topic, I read an essay by the late Ellen Meiksins Wood where she noted that our splendid "new Left" are
all at once too pessimistic and too optimistic. Too pessimistic because they blandly assume that socialism is dead and so all
struggles in that direction are futile. Too optimistic because they assume that this (up till now) bearable capitalism around
them can simply continue with its shopping sprees, pop celebrity culture, soap operas, scandal sheets, ineffectual though comfortable
tut-tutting over corrupt and stupid politicians and – best of all – its endless opportunity for writing postmodernist deconstructions
of all those phenomena.
Why bother getting your hands dirty with an actual worker's struggle when you can write yet another
glamorously "radical" critique of the latest Hollywood blockbuster (which in truth just ends up as another advert for it)?
Fair Dinkum
During the 50's and 60's most folks living in Western cultures were happy with their lot: One house, one car, one spouse, one
job, three or four kids and enough money to live the 'good life'
Then along came Vance Packard's 'Hidden Persuaders' and hell broke loose.
The One Per Cent saw an opportunity of unlimited exploitation and they ran with it.
They're still running (albeit in jets and yachts) and us Proles are either struggling or crawling.
Greed is neither Left or Right.
It exists for its own self gratification.
Seamus Padraig
Excellent article and very true. Just one minor quibble:
This coalition between an economic policy that serves the interest of a tiny minority, and an ideology that appears to
"include" everybody is what Nancy Fraser has aptly called "progressive neoliberalism".
Actually, post-modernism doesn't include everybody -- just the 'marginalized' and 'disenfranchised' minorities whom
Michel Foucault championed. The whole thing resembles nothing so much as the old capitalist strategy of playing off the
Lumpenproletariat against the proletariat, to borrow the original Marxist terminology.
Stephen Morrell
The following facile claim doesn't bear scrutiny: "At the very moment when the "threat" of real existing socialism was not
felt anymore, due to the Western economic and military superiority in the 1980ies (that led to the fall of the Berlin Wall),
the economic paradigm in the Western countries shifted."
The economic paradigm shifted well before the 1980s and it had nothing to do with "Western economic and military superiority
in the 1980ies". The death knell of Keynesianism was sounded with the de-linking of the US dollar and the gold standard in
1971 and the first oil crisis of 1973. Subsequently, the 1970s were marked by a continuous and escalating campaign of capital
strikes which produced both high inflation and high unemployment ('stagflation') in the main imperial centres. These strikes
persisted until the bourgeoisie's servants were able to implement their desired 'free market' measures in the 1980s, the key
ones being smashing of trade union power and consequent devastation of working conditions and living standards, privatisation
of essential services, dissolution of social welfare and all the rest. All in the name of 'encouraging investment'.
The fear of 'existing socialism' (and of the military might of Eastern Europe and the USSR) persisted right up to the restoration
of capitalism in the USSR in 1991-92. The post-soviet triumphalism (to that moronic and ultimate post-modernist war cry, 'The
End of History') only opened the floodgates for the imposition of the neoliberal paradigm over the whole globe. The real essence
of the 'globalisation' ideology has been this imposition of imperial monopoly and hegemony on economically backward but resource-rich
countries that hitherto could gain some respite or succour from the USSR and Eastern Europe as an alternative to the tender
mercies of the World Bank and IMF whose terms correspondingly centred on the neoliberal paradigm.
The key class-war victories of the 1980s by the ruling class, especially in the main Anglophone imperial centres (exemplified
by the air traffic controllers strike in Reagan's US and the Great Coal Strike in Thatcher's England), were the necessary condition
to them getting their way domestically. However, the dissolution of the USSR not only allowed the imperialists to rampage internationally
(through the World Bank, IMF, WTO, etc) but gave great fillip to their initial class-war victories at home to impose with impunity
ever more grinding impoverishment and austerity on the working class and oppressed -- from the 1990s right up to fraught and
crisis-ridden present. The impunity was fuelled in many countries by that domestic accompaniment to the dissolution of the
USSR, the rapidly spiralling and terminal decline of the mass Stalinist Communist parties, the bourgeoisie's bogeyman.
Finally, productivity in the capitalist west was always higher than in post-capitalist countries. The latter universally
have been socialised economies built in economically backward countries and saddled with stultifying Stalinist bureaucracies,
including in the USSR and Eastern Europe. Capitalist productivity didn't suddenly exceed that in the USSR or Eastern Europe
in the 1980s.
So, overall, the 'triumph' of the neoliberal paradigm didn't really have much to do with the imperialist lie of "Western
economic and military superiority in the 1980ies". That fairytale might fit into some post-modernist relativist epistemology
of everything being equally 'true' or 'valid', but in the real world it doesn't hold up empirically or logically. In Anglophone
philosophic academia at least, post-modernism really picked up only after Althusser strangled his wife, and hyper-objectivist
structuralism correspondingly was strangled by hyper-subjectivist post-modernism.
Seamus Padraig
The death knell of Keynesianism was sounded with the de-linking of the US dollar and the gold standard in 1971 and the
first oil crisis of 1973.
Not really, no. In fact, we still do have Keynesianism; but now, it's just a Keynsianism for the banks, the corporations
and the MIC rather than the rest of us. But check the stats: the governments of West are still heavily involved in deficit
spending–US deficits, in fact, haven't been this big since WW2! Wish I got some of that money
Tim Jenkins
I find this kind of a pointless discussion on Keynes & so on
"Capitalism has Failed." Christine Lagarde 27/5/2014 Mansion House
"Socialism for the Rich" (Stiglitz: Nobel Economic laureate, 2008/9)
More important is the structuring of Central Banks to discuss and
Richard A. Werner's sound observations in the link
Riddle me this Seamus: this year we just got a new statue of Woodrow Wilson in Plovdiv BG.
Last year we got a statue of John no-name McCain in Sofia Bulgaria
See the patterns in the most poverty stricken EU nation ?
Not difficult !
vexarb
Seamus, me too! At least, wish I could get some of my own money back.
Tim Jenkins
Whenever I think about some serious R.O.I. of time & money & family contributions to Tech. Designs, lost in the '80's, I have
to play some music or switch to Zen mode 🙂
vexarb
@Tim: "R.O.I (Return On Investment)". The first time I have come across that P.O.V (Point Of View) on this site. The essence
of Darwin's theory of evolutionary progress: to slowly build on an initial slight advantage. The 80s (I was there), Maggie
Snatcher, Baroness Muck, no such thing as Society, the years that the Locust has eaten. Little ROI despite a tsunami of fiat
money swirling around the electronic world. Where is the ROI from capital in the WC.Clinton / B.Liar / Brown regimes, that
were so boastful of their economic policies. Where are the snows of yesteryear?
Tim Jenkins
Well said, Stephen: this wholly weird wee article certainly begs the question, how old is & where was this tainted memory &
member of academia in the 'Winter of '79' ? and how could he have possibly missed all the denationalisation/privatisation,
beginning with NFC and onwards, throughout the '80's, under Thatcher ? Culminating in screwing UK societal futures, by failing
to rollout Fibre Optic Cable in the UK, (except for the Square Mile city interests of London) which Boris now promises to do
today, nationwide,
a mere 30 years too damn late, when it would have been so cheap, back then and production costs could have been tied to
contracts of sale of the elite British Tech. at that time
Worth reading both part one & two of that link, imo scandalous !
Nice wholly suitable reference to Althusser 😉 say no more.
Talk about 'Bonkers' 🙂 we shan't be buying the book, for sure 🙂
Your comment was way more valuable. Do people get paid for writing things like this, these days. I was just outside Linz
for 2 months, just before last Christmas and I found more knowledgeable people on the street, in & around Hitler's ole' 'patch',
during his formative years, on the streets of Linz: where the joke goes something along the lines of
"If a homeless unemployed artist can't make it in Austria, he has nothing to fear, knowing that he can be on the road to
becoming the Chancellor of Germany in just another year "
BigB
I was right with you to the end, Stephen. Althusser killed his wife for sure: but he was deemed insane and never stood trial.
He was almost certainly suffering from a combination of conditions, exacerbated by a severe form of PTSD, as we would call
it now.
Whether or not one has sympathy for this has become highly politicised. Classic Liberals, anti-communists, and radical feminists
always seem to portray the 'murder' as a rational act of the misogynistic male in the grips of a radical philosophy for which
wife murder is as natural a consequence as the Gulag. His supporters try to portray the 'mercy' killing of Helene as an 'act
of love'. It wasn't that simple though, was it? Nor that black and white.
I cannot imagine what life was like in a German concentration camp for someone who was already suffering from mental illness.
From what I have read: the 'treatment' available in the '50s was worse than the underlying condition. He was also 'self-medicating'.
I cannot imagine what the state of his mind was in 1980: but I am inclined to cut him some slack. A lot of slack.
I cannot agree with your last statement. Althusser's madness was not a global trigger event – proceeding as a natural consequence
from "hyper-subjectivist post-modernism". Which makes for a literary original, but highly inaccurate metaphor. Not least because
Althusser was generally considered as a Structuralist himself.
Other than that, great comment.
Stephen Morrell
I understand your sentiments toward Althusser, and am sorry if my remarks about him were insensitive or offensive. However,
I know from personal experience of hardline Althusserian academic philosophers who suddenly became post-modernists after the
unfortunate incident. The point I was trying to make was that his philosophy wasn't abandoned for philosophical reasons but
non-philosophical, moral ones. It wasn't a condemnation of Althusser. It was a condemnation of many of his followers.
I made no claim that this was some kind of 'global trigger event'. Philosophy departments, or ideas as such, don't bring
change. If post-modernism didn't become useful to at least some sectors of the ruling class at some point, then it would have
remained an academic backwater (as it should have). Nor that post-modernism was some kind of 'natural consequence' of structuralism
(which is what I think you meant). Philosophically, it was a certainly one reaction to structuralism, one among several. Other
more rational reactions to structuralism included EP Thompson's and Sebastiano Timpinaro's.
As Marx said, "the ideas of the ruling class are in every epoch the ruling ideas" [German Ideology], and if the ruling class
finds some of them useful they'll adopt them. Or as Milton Friedman, one of the main proponents of neoliberalism, proclaimed:
"Only a crisis – actual or perceived – produces real change. When that crisis occurs, the actions that are taken depend on
the ideas that are lying around." Post-modernism, as a philosophy 'lying around', serves as a nice philosophical/ideological
fit for the intelligentsia to rationalise the anti-science ideology the ruling class today is foisting on rest of the population.
Politically, Althusser was disowned by many French leftists for his support of the thoroughly counter-revolutionary role
of the Stalinist PCF in the 1968 May events. His authority lasted for over a decade longer in the Anglophone countries.
Lochearn
"In Anglophone philosophic academia at least, post-modernism really picked up only after Althusser strangled his wife, and
hyper-objectivist structuralism correspondingly was strangled by hyper-subjectivist post-modernism."
Wonderful sentence. I'll keep that – if I may – for some imaginary dinner table with some imaginary academic friends.
Tim Jenkins
I was thinking exactly the same and imagining the window of opportunity to provoke some sound conversation, after some spluttering of red w(h)ine
Stephen Morrell
Thank you. I'll rephrase it to improve it slightly if you like:
In Anglophone philosophic academia at least, post-modernism really picked up only after Althusser strangled his wife, and
in revenge hyper-objectivist structuralism was strangled by hyper-subjectivist post-modernism.
Red Allover
Mr. Morrell's use of the phrase "stultifying Stalinist bureaucracies," to describe the actually existing Socialist societies
of the Eastern bloc, indicates to me that he is very much of the bourgeois mind set that he purports to criticize. This "plague
on both your houses" attitude is very typical of the lower middle class intellectual in capitalist countries, c.f. Chomsky,
Zizek, etc.
Stephen Morrell
On the contrary, all the remaining workers states (China, North Korea, Viet Nam, Laos and Cuba) must be defended against imperialist
attack and internal counterrevolution despite the bureaucratic castes that hold political power in these countries. Political,
not social, revolutions are needed to sweep away these bureaucracies to establish organs of workers democracy and political
power (eg soviets) which never existed in these countries (unlike in the first years of the USSR).
To his last days, the dying Lenin fought the rising bureaucracy led by Stalin, but Russia's backwardness and the failure
of the revolution to spread to an advanced country (especially Germany, October 1923) drove its rise. Its ideological shell
was the profoundly reactionary outlook and program of 'Socialism in One Country' (and only one country). And while Stalin defeated
him and his followers, it was Trotsky who came to a Marxist, materialist understanding of what produced and drove the Soviet
Thermidor. Trotsky didn't go running off to the bourgeoisie of the world blubbering about a 'new class' the way Kautsky, Djilas,
Shachtman, Cliff, et al. did.
The restoration of capitalism in the Soviet Union was a profound defeat for the working class worldwide, as it would be
for the remaining workers states. Now if that's a 'bourgeois mindset' of a 'lower middle class intellectual', be my guest and
nominate the bourgeois or petty bourgeois layers that hold such views. Certainly Chomsky, Zizek et al. couldn't agree with
such an outlook, but it's only the bourgeoisie and the Stalinists who contend that the workers states are 'socialist' or 'communist'.
Only a true post-modernist could delude themselves into concurring, or claim that the political repression, censorship and
corrupting bureaucratism of the Stalinist regimes were indeed not stultifying.
Red Allover
Thanks for your intelligent response. I am very familiar with the Trotskyist positions you outline. I could give you the Leninist
rebuttal to each of them, but you are probably familiar with them as well. I don't want to waste your time, or mine. However,
if you don't mind me asking, exactly at what point do you feel capitalism was restored in the USSR? It was, I take it, with
the first Five Year Plan, not the NEP?
Also, the Socialist or, to use your nomenclature, "Stalinist" system, that was destroyed in the the USSR in the 1990s–it was,
in truth, just one form of capitalism replaced by another form of capitalism? Would this summarize your view accurately?
Stephen Morrell
Capitalism was restored in the USSR in 1991-92. Stalinism was not another form of capitalism, as the Third Campists would contend.
The Stalinist bureaucracy rested on exactly the same property relations a socialist system would which were destroyed with
Yeltsin's (and Bush's) counterrevolution. Last, I've never labelled the Stalinist bureaucracy as a 'system'.
Perhaps if you changed your moniker to: "Troll Allover" one could take you seriously, well, not really – 'seriously' – but
at least in a sort of weird, twisted & warped post-modern sense – eh?
Red Allover
I'm sorry, what is the argument you are making? I know name calling is beneath intelligent, educated people.
Reverting to the first point, my main problem with your explanation of how you use the
term 'neoliberal' is that your definition of 'neoliberal' depends on your definition of
'classical liberal', and you haven't explained how you use the term 'classical
liberal'.
IMHO, neoliberalism has probably closer connection to Trotskyism then to the classic
liberalism and Mont Pelerin Society can be renamed into "The Committee for the adaptation of
Trotskyism for the needs of financial oligarchy"
Some commonalities (in no particular order, or importance):
-- The brutal suppression of organized labor
-- Rampant militarism as the method of controlling of the population; outsized role on
intelligence agencies in the society; the regime of total surveillance; the conversion of the
state into the national security state
-- Scapegoating and victimization of Untermensch
-- The mantle of inevitability (famous TINA statement of Margaret Thatcher )
-- The concept of the "new class" as the driving force in history which is destined to guide
the humanity forward ( with the replacement of "proletariat" with the "creative class".) See
also Rand positivism with its cult of entrepreneurs.
-- The implicit rejection of the normal interpretation of the rule of the law for "The
Masters of the Universe" and the idea of "neoliberal justice" (tough justice for Untermensch
only).
-- Messianic zeal and hate for the "old order"
-- Rejection of the ideas of universal truth, adoption of variation of "a class truth" via
postmodernism; neoliberals reject the idea that there are any universal and/or religious (for
example Christian) moral values and the concept of truth.
-- Implicit denial of the idea of "free press". The press is converted into neoliberal
propaganda machine and journalists, writers, etc are viewed as "the solders of the ideology"
who should advance neoliberalism
-- The use of university economics courses for the indoctrination
-- Pervasive use of academic science and "think tanks" for brainwashing of the
population.
-- The idea of the Uniparty -- a single party system, with the ruling party serves as the
vanguard of the hegemonic neoliberal class (top 1%) and represents only its interests. Which
was adapted in the USA to a two Party system to preserve the illusion of democracy.
-- Economic fetishism, the deliberate conversion of the ideology into a secular religion,
questioning postulates of which can lead to ostracism. Neoliberals see the market as a sacred
element of human civilization. Like is the case with Marxism, "Neoliberal rationality" is
heavily tilted toward viewing the people as "homo economicus". (See Professor Wendy Brown
discussion on the subject)
-- Cult of GDP with GDP growth as the ultimate goal of any society. Measurement of GDP became
"number racket" and is distorted for political gains. Like Marxism, neoliberalism reduces
individuals to statistics contained within aggregate economic performance.
-- Justification of the use of violence as the political tool. The idea of Permanent
[neoliberal] revolution to bring to power the new hegemonic class in all countries of the
globe despite the resistance of the population. Like Trotskyism, neoliberalism consider wars
to impose a neoliberal society on weaker countries (which in modern times are countries
without nuclear weapons) which cannot give a fair fight to Western armies as inherently
just
-- The idea of artificial creation of the "revolutionary situation" for overthrow of
"unfriendly" regimes ( via color revolution methods); assigning similar roles to students and
media in such a coup d'état.
-- Reliance on international organizations to bully countries into submission (remember
Communist International (aka Comintern) and its network of spies and Communist Parties all
over the world).
Tim Worstall @10
Those things you mention are all prime example of neoliberal policies and privatisations
implemented in the nineties, parts of the worldwide neoliberal trend.
If we "tend to think of all of those as not being very neoliberal" it is because the
governments and parties that implemented these policies sometimes called themselves social
democratic or even socialist, but that is really the explanation why such far-reaching
changes could be made with so little resistance: the political majorities of every color,
left and right, embraced the neoliberal project wholeheartedly.
Contrary to its reputation, my country, Sweden, is in many aspects more privatised than
Chile. All of the old 20th century state monopolies are gone, and whatever few state-run
functions still left are currently being dismantled by the social democratic government.
"... An obvious point is that there is no such thing as a 'pure' neoliberal government, any more than there is a 'pure' social democratic government. All governments are mixtures of interest groups and of course, individuals, who may have different opinions and probably do. Also Govt.s 'change tack' over time. ..."
"... Nonetheless we can say that certain governments tend towards one or other end of the ideological spectrum. The Labour Government of 1945 and FDR's New Deal, are clearly on the 'left' hand side of the spectrum, and the Thatcher and Reagan government are on the Right (both of these are both clearly neoliberal, incidentally, in intent if not always in deed). Where one places other post-war governments is clearly to a certain extent in the eye of the beholder, but general trends are obvious. ..."
"... Certain people on this very thread are very desirous for these obviously apparent trends not to be so apparent or so obvious, and for equally obvious conclusions not to be therefore drawn about where, say, the Clinton Presidency or the Tony Blair Government stand on this 'left to right' spectrum, and one has to ask why that is. ..."
I
think this is a very important topic, and I would encourage others to contribute as much as
possible and create an educational interesting discussion.
John Quiggin on November 2, 2019
One obvious problem with my claim that neoliberalism has failed is that I haven't provided
either 'neoliberalism' or 'failure'. Taking the second point first, there are several ways in
which a political ideology may be a failure.
First, it may never attract sufficient support to have a serious influence on political
outcomes. In this sense, ideologies like libertarianism and guild socialism may be regarded
as failures.
Second, an ideology may be adopted and implemented, then discredited and discarded, or
superseded by some new idea. This is the eventual fate of most political ideologies.
Communism is the most recent example of a failure of this kind.
Third, an ideology may fail to deliver the promised outcomes. This is much more a matter
of judgment, since promises are never delivered in full and failures are rarely complete.
It is important to remember that failure is never final.
The last one is an important and valid observation. Humans are immensely flexible. I think
the broadest measure of the failure of a particular social system (and connected ideology)
might be the stagnation or even decline of the standard of living of the bottom 80% of the
population.
The key promise of neoliberalism is that redistribution of wealth up will lift that standard
of living of everybody ("a rising tide lifts all boats" meme.) It did not happen.
Equally obviously, neoliberalism has almost completely failed to deliver on most of its
promises, but, like Communism, that won't stop the True Believers.
Thank you! The analogy with Communism is very deep indeed, and exists on many levels. Dmitry
Orlov touched it in his writings. Any system based on ideology is somewhat similar to theocracy
and as such, carries the seeds of its own destruction within. As soon as the majority of the
population rejects the ideology troubles start, although the social system can continue to
exist for, say, half a century or more. So, in a way, 2007 created the 2016 Hillary fiasco: the
population had sent the establishment neoliberal candidate to the dustbin of history.
Moreover, the neoliberal New Class looks very similar to Soviet Nomenklatura: to belong to
this class it is not enough to have only money. It is more important to have a high-level
position in the industry, education, media, sport, or government. As soon as you lose this
position, you no longer belong to the New Class, even if you have millions in your bank
account. To accomplish the soft-landing, you can create your own charity (Gates, Clintons), or
to get some sinecure like to become a board member in an S&P500 corporation (Comey,
Mueller) although the latter is still "downgrades your social statuts, etc.
IMHO, after 2007 the situation with Neoliberalism is broadly similar to the situation with
the collapsing ideology in which Bolshevism found itself in 1945. The latter lasted almost 50
years after that, so we can probably assume that it takes from half a century to century for
such a neo-theocratic social system to disintegrate.
Surprisingly after 2007 managed to counterattack in several countries (Brazil, Argentina).
This phenomenon is discussed by by Colin Crouch in his short but influential book "The Strange
Non-Death of Neoliberalism" (2011)
So it had shown the same of higher resilience as Bolshevism, and in the absence of viable
alternatives it might even take longer to disintegrate. I suspect that much depends on the
"peak/plato oil" phenomenon. Prices over $100 per barrel might speed up the collapse.
In a sense, the current NeoMcCartyism (Russophobia, Sinophobia) epidemic in the USA can
partially be viewed as a yet another sign of the crisis of neoliberalism: a desperate attempt
to patch the cracks in the neoliberal façade using scapegoating -- creation of an
external enemy to project the problems of the neoliberal society.
I would add another, pretty subjective measure of failure: the degradation of the elite.
When you look at Hillary, Trump, Biden, Warren, Harris, etc, you instantly understand what I am
talking about. They all look are the second-rate, if not the third rate politicians. Also, the
Epstein case was pretty symbolic.
The main luck of neoliberalism is that after 1980th, the society experienced two
technological revolutions at once: one in computing and the other in telecommunications
(Internet and broadband communications). Dissolution and subsequent merciless plunder of xUSSR
economic space a large part of which now is colonized by EU and the USA (Central European
countries previously belonging to the Warsaw block, Baltic countries, Ukraine, Georgia, etc.)
also helped to stem the slide of the standard of living in Western countries at least for a
decade or two.
Another factor was the injection of Soviet block engineers (including programmers) in the
USA and several other Western countries (Germany, UK, Scandinavian countries, Australia,
Israel, and Canada). I suspect that the Israel techno boom can be explained by this lucky
chance, although many later left Israel. Now the "Triumphal march of neoliberalism" is history,
the USSR is history, and the situation looks pretty bleak: high inequality has well known
destabilizing effects of the society.
Protests are coming. Whether those protests can be suppressed by the power of the national
security state installed after 9/11 in the USA, remain to be seen.
Hidari 11.04.19 at 11:22 am (no link)
Three more pieces on the philosophy which apparently does not exist, or, if it does exist,
can't be defined.
(Ideas associated with neoliberalism include) ' economic liberalization policies such as
privatization, austerity, deregulation, free trade and reductions in government spending in
order to increase the role of the private sector in the economy and society.'
(A neoliberal agenda) pushes 'deregulation on economies around the world, (opens) national
markets to trade and capital, and (demands) that governments shrink themselves via austerity
or privatisation. '
The major ideological opponents of neoliberalism therefore (social democracy, democratic
socialism) oppose all these things.
So instead of privatisation, nationalisation.
Instead of austerity, Keynesian 'pump priming' of the economy.
Instead of deregulation, regulation (of business).
Instead of a reduction of govt. spending, an increase in govt. spending.
Instead of Capital, unions.
And so on.
Hidari 11.04.19 at 12:45 pm (no link)
An obvious point is that there is no such thing as a 'pure' neoliberal government, any more
than there is a 'pure' social democratic government. All governments are mixtures of interest
groups and of course, individuals, who may have different opinions and probably do. Also
Govt.s 'change tack' over time.
Nonetheless we can say that certain governments tend towards one or other end of the
ideological spectrum. The Labour Government of 1945 and FDR's New Deal, are clearly on the
'left' hand side of the spectrum, and the Thatcher and Reagan government are on the Right
(both of these are both clearly neoliberal, incidentally, in intent if not always in deed).
Where one places other post-war governments is clearly to a certain extent in the eye
of the beholder, but general trends are obvious.
Certain people on this very thread are very desirous for these obviously apparent trends
not to be so apparent or so obvious, and for equally obvious conclusions not to be therefore
drawn about where, say, the Clinton Presidency or the Tony Blair Government stand on this
'left to right' spectrum, and one has to ask why that is.
Three years ago, American pundits could seriously predict a never-ending economic boom.
The combination of continued prosperity and 'the end of welfare as we know it' seemed to be
on the verge of eliminating crime and unemployment.
Should that be a thirty instead of three?
Otherwise, thanks for the best definition of neoliberalism I've seen. Keep up the great
writing, it's stimulating great conversations among friends.
Hidari 11.02.19 at 6:43 pm (no link)
I think this is excellent. Despite what was claimed on the previous thread, I think
neoliberalism has a fairly definite meaning, which is best summarised (as per the OP) in
comparison with its intellectual 'enemy': social democracy (or democratic socialism).
A key way of looking at this is: 'on whom does the burden of proof lie?' (or, to put it
another way, where do you put your Bayesian prior?)
For example. For the social democrat, and most Western European socialists/social
democrats, private enterprise in terms of large corporations/companies which had some form of
social benefit (or should have) were to be considered 'guilty until proven innocent'. In
other words, the burden of proof, so to speak, lay with the Right: they had to prove why
private was better. If they couldn't, the business/enterprise should remain in the public
sphere.
The neoliberal revolution (Thatcherism, Reaganism) reversed that burden of proof.
Suddenly, for them (and, soon, for us all), the burden of proof lay on the public sphere, not
the private. Suddenly it was public enterprises, not private, that were 'guilty until proven
innocent'. And unless overwhelming bodies of evidence were produced that public was better
for individual industries, then it was simply assumed that private was better, with the
obvious political corollary:
If an industry could be privatised it must be privatised.
When it could not be privatised, for whatever reason, it must be forced into some form of
collaboration with private industry (e.g. the notorious PPP), or 'internal markets'
introduced (cf the BBC, the NHS).
Increasing inequality was not sought out, per se, but insofar as it followed from the
marketisation of society, it was not to be fought against in any meaningful way.
The Golden Rules of neoliberalism were rarely stated openly, but informally one remembers
phrases like 'you can't buck the markets' and 'there is no alternative' (i.e. to the markets,
and marketisation).
As I say, it's bewildering that people pretend that neoliberalism doesn't have a fairly
clearly defined meaning, or even that 'there's no such thing as neoliberalism' (a quote that
went the rounds on social media a few months ago).
Equally obviously neoliberalism has almost completely failed to deliver on most of its
promises, but, like Communism, that won't stop the True Believers.
When I arrived in the United States from France in 1999, I felt like I was entering the land of free markets. Nearly
everything -- from laptops to internet service to plane tickets -- was cheaper here than in Europe.
Twenty years later, this is no longer the case. Internet service, cellphone plans, and plane tickets are now much
cheaper in Europe and Asia than in the United States, and the price differences are staggering. In 2018, according to
data gathered by the comparison site Cable
, the average monthly cost of a broadband internet connection was $29 in
Italy, $31 in France, $32 in South Korea, and $37 in Germany and Japan. The same connection cost $68 in the United
States, putting the country on par with Madagascar, Honduras, and Swaziland. American households spend about $100 a
month on cellphone services, the Consumer Expenditure Survey from the U.S. Bureau of Labor Statistics indicates.
Households in France and Germany pay less than half of that, according to the economists Mara Faccio and Luigi Zingales.
None of this has happened by
chance. In 1999, the United States had free and competitive markets in many industries that, in Europe, were dominated
by oligopolies.
Today the opposite is true. French households can typically choose
among five or more internet-service providers; American households are lucky if they have a choice between two, and many
have only one. The American airline industry has become fully oligopolistic; profits per passenger mile are now about
twice as high as in Europe, where low-cost airlines compete aggressively with incumbents.
This is in part because the rest of the world was inspired by the United States and caught up, and in part because
the United States became complacent and fell behind. In the late 1990s, legally incorporating a business in France took
15 administrative steps and 53 days; in 2016,
it took only four days
. Over the same period, however, the entry delay in the United States went up from four days
to six days. In other words, opening a business used to be much faster in the United States than in France, but it is
now somewhat slower.
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The irony is that the free-market ideas and business models that benefit European consumers today were inspired by
American regulations circa 1990. Meanwhile, in industry after industry in the United States -- the country that invented
antitrust laws -- incumbent companies have increased their market power by acquiring nascent competitors, heavily lobbying
regulators, and lavishly spending on campaign contributions. Free markets are supposed to punish private companies that
take their customers for granted, but today many American companies have grown so dominant that they can get away with
offering bad service, charging high prices, and collecting, exploiting, and inadequately guarding their customers'
private data.
In Europe, greater integration among national economies turned out to be a force for greater competition within
individual economies. The very same politicians who disliked free markets at home agreed to promote them at the European
level. Why? Because everyone understood that the single market required independent regulators as well as a commitment
that individual countries would not subsidize their domestic champions.
As it turned out, politicians were more worried about the regulator being captured by the other country than they
were attracted by the opportunity to capture the regulator themselves. French (or German) politicians might not like a
strong and independent antitrust regulator within their own borders, but they like even less the idea of Germany (or
France) exerting political influence over the EU's antitrust regulator. As a result, if they are to agree on any
supranational institution, it will have a bias toward more independence.
The case of the industrial giants Alstom and Siemens provided an almost perfect test of my theory. After Germany's
Siemens and France's Alstom decided in 2017 to merge their rail activities, the EU's two largest and most influential
member states both wanted the merger approved. But the EU's powerful competition commissioner, Margrethe Vestager, stood
her ground. She and her team concluded that the merger "would have significantly reduced competition" in signaling
equipment and high-speed trains, "depriving customers, including train operators and rail-infrastructure managers, of a
choice of suppliers and products." The European Commission blocked the merger in February 2019.
In the United States, meanwhile, antitrust enforcement has become less stringent, while the debate over market
competition has become highly ideological and untethered from what data actually show.
A central argument of the Chicago school of antitrust -- whose laissez-faire approach was influential in persuading
American regulators to take a more hands-off attitude toward mergers -- is that monopoly power is transient because high
profits attract new competitors. If profits rise in one industry and fall in another, one would expect more entry of new
firms in the former than in the latter. This used to be true -- until the late 1990s.
Since about 2000,
however, high profits have persisted, rather than attracting new competitors to the American market. This suggests a
shift from an economy where entry acted as a fundamental rebalancing mechanism to one where high profits mostly reflect
large barriers to entry. The Chicago school took free entry for granted and underestimated the many ways in which large
firms can keep new rivals out.
What the Chicago school got right, however, is that some of these barriers to entry come from excessive regulations.
In some industries, licensing rules directly exclude new competitors; in other cases, regulations are complex enough
that only the largest companies can afford to comply.
Instead of debating more regulation versus less -- as ideologues on the left and right tend to do -- Americans should be
asking which regulations protect free markets and which ones raise barriers to entry.
Creeping monopoly power has slowly but surely suffocated the middle class. From 2000 to 2018, the median weekly
earnings of full-time workers increased from $575 to $886, an increase of 54 percent, but the Consumer Price Index
increased by 46 percent. As a result, the real labor income of the typical worker has grown by less than one-third of 1
percent a year for nearly two decades. This explains in part why much of the middle class distrusts politicians,
believes the economic system is rigged, and even rejects capitalism altogether.
What the middle class may not fully understand, however, is that much of its stagnation is due to the money that
monopolists and oligopolists can squeeze out of consumers. Telecoms and airlines are some of the worst offenders, but
barriers to entry also drive up the prices of legal, financial, and professional services. Anticompetitive behavior
among hospitals and pharmaceutical companies is a significant contributor to the exorbitant cost of health care in the
United States.
In my research on monopolization in the American economy, I estimate that the basket of goods and services consumed
by a typical household in 2018 cost 5 to 10 percent more than it would have had competition remained as healthy as it
was in 2000. Competitive prices would directly save at least $300 a month per household, translating to a nationwide
annual household savings of about $600 billion.
And this figure captures only half of the benefits that increased competition would bring. Competition boosts
production, employment, and wages. When firms face competition in the marketplace, they also invest more, which drives
up productivity and further increases wages. Indeed, my research indicates that private investment -- broadly defined to
include plants and equipment, as well as software, research and development, and intellectual property -- has been
surprisingly weak in recent years, despite low interest rates and record profits and stock prices. Monopoly profits do
not translate into increased investment. Instead, just as economic theory predicts, they flow into dividends and share
buybacks.
Taking into account these indirect effects, I estimate that the gross domestic product of the United States would
increase by almost $1 trillion and labor income by about $1.25 trillion if we could return to the levels of competition
that prevailed circa 2000. Profits, on the other hand, would decrease by about $250 billion. Crucially, these figures
combine large efficiency gains shared by all citizens with significant redistribution toward wage earners. The median
household would earn a lot more in labor income and a bit less in dividends.
If America wants to lead once more in this realm, it must remember its own history and relearn the lessons it
successfully taught the rest of the world. While legal scholars and elected officials alike have shown more interest in
antitrust in the United States of late, much of that attention has been focused exclusively on the major internet
platforms. To promote greater economic prosperity, a resurgence of antitrust would need to tackle both new and old
monopolies -- the Googles and Facebooks and the pharmaceutical and telecom companies alike.
Regardless of these predictable challenges, renewing America's traditional commitment to free markets is a worthy
endeavor. Truly free and competitive markets keep profits in check and motivate firms to invest and innovate. The 2020
Democratic presidential campaign has already generated some interesting policy proposals, but none that, like restoring
free markets, would increase labor income by more than $1 trillion. Taxes cannot solve all of America's problems. Taxes
can redistribute. Competition can redistribute, but it can also grow the pie.
Americans' views on
impeachment are neatly split along partisan lines. The latest polling averages,
tracked by the website
FiveThirtyEight
, show that 84 percent of Democrats now support impeachment, close to the highest level since
at least August 2018, when the site started collecting polls on the issue. By contrast, only 11 percent of Republicans
support impeachment, a number that has stayed fairly consistent over the past year and a half. This gulf in Democrats' and
Republicans' views is more than just partisanship, however. It's the latest evidence that political tribalism has taken
over nearly every part of American life.
According to a growing body of political-science research, Americans largely no longer feel a shared sense of national
identity. Democrats and Republicans see their political opponents as enemies with totally incomprehensible beliefs and
lifestyles. On impeachment, members of the two parties see things radically differently, not just because they have
dissimilar political opinions, but because they have entirely divergent views on how to approach life. The vicious
impeachment fight ahead may further exacerbate polarization in America, leaving Republicans, Democrats, and everyone in
between feeling even more suspicious of one another.
The WTO is being dismantled by Trumpian nonfeasance in pursuit of the deliberate rejection of the very idea of international
institutions (of imperialism, as I see it, but others don’t,) standing above the national state, immunizing the market against
the mistakes of democracy, providing the essential support to make a world market.
The OP says in the title this is arrogance, presumably as violating economic science. But all these seeming side issues are
about political economy in the end. Trump wants to pretend the US has been exploited by the old system, and pose as a nationalist.
I think he just wants to rationalize US empire, cutting costs, increasing ROI, etc.
I think Trump is getting support, primarily from the rich; also from middle strata, the kind of people who put FOX TV on in
the waiting rooms of their businesses; aksi from lower strata led by Christianity to favor any oppressive government that will
provide them support for their efforts to police society; also lower strata ethnic groups who have slowly been turning inwards
to each other as they see a future dog-eat-dog country where the breeds of dogs have to stick together, or perish.
In short, what the OP sees as arrogant dismissal of science I see as desperation masked with bravado.
Because it is primarily based on a critique of social democracy, neoliberalism places much
more weight on economic freedom than on personal freedom or civil liberties, reversing the
emphasis of classical liberalism. Indeed, it is fair to say that on matters of personal
freedom, neoliberalism is basically agnostic, encompassing a range of views from repressive
traditionalism to libertarianism.
In terms of economic policy, neoliberalism is constrained by the need to compete with the
achievements of social democracy. Hence, it is inconsistent with the kind of dogmatic
libertarianism that would leave the poor to starvation or private charity, and would leave
education to parents. Neoliberalism seeks to cut back the role of the state as much as possible
while maintaining public guarantees of access to basic health, education and income
security.
The core of the neoliberal program is
(i) to remove the state altogether from 'non-core' functions such as the provision of
infrastructure services
(ii) to minimise the state role in core functions (health, education, income security) through
contracting out, voucher schemes and so on
(iii) to reject redistribution of income except insofar as it is implied by the provision of a
basic 'safety net'.
With this definition, a reasonably pure form of neoliberalism (except for some subsidies to
favored businesses) is embodied in the program of the US Republican Party, and particularly the
Contract with America proposed by Gingrich in 1994. The ACT Party in New Zealand also takes a
fairly clear neoliberal stance, as do the more ideologically consistent elements of the British
Conservative Party and the Australian Liberal Party.
My claim that neoliberalism has failed therefore uses several different meanings of the term
'failure'. In Europe, apart from Britain, neoliberalism has mostly failed in sense (i). The EU
is inherently social democratic in its structure and attempts by poltical groups in some
Eastern European countries (notably the Czech Republic and Estonia) to pursue a free market
line have failed in the light of the superior attractions of the EU. It is true that the
European social democracies have given some ground, notably with respect to privatisation, but
no genuinely neoliberal party has arisen or seems likely to. The political right has moved back
to the older and more fertile ground of law and order and xenophobia.
In Britain, neoliberalism has failed in sense (ii). The Conservative party is hovering on
the edge of extinction and, as I have arged previously, the 'New Labour' government has shifted
steadily away from neoliberalism and towards a mildly modernised form of social democracy. The
same is true in New Zealand, where the advocates of neoliberalism, once dominant, are now
completely marginalised.
Although the Australian government started out with a clearly neoliberal framework it has
gradually dropped it in favor of the kind of law and order/xenophobia/militarist position that
characterises the traditional right. The repeated resort to ad hoc levies as fixes for
industry-specific problems is indicative of a government that has lost its economic bearings.
Moreover, the Liberals look like being in semi-permanent opposition in most of the states and
the Howard government is unlikely to survive the end of the housing bubble (although given the
quality of Federal Labor, anything could happen).
Finally, in the US, neoliberalism remains the dominant ideology but is increasingly failing
in sense (iii). Three years ago, American pundits could seriously predict a never-ending
economic boom. The combination of continued prosperity and 'the end of welfare as we know it'
seemed to be on the verge of eliminating crime and unemployment. Now the most charitable
assessment of US economic performance is 'better than average' and even this cannot be
sustained of the current recession/stagnation drags on much longer. The basic problem is that,
given high levels of inequality, very strong economic performance is required to match the
levels of economic security and social services delivered under social democracy even with
mediocre growth outcomes.
(i) to remove the state altogether from 'non-core' functions such as the provision of
infrastructure services
I respectfully disagree. My feeling is that neoliberals are statists "par excellence" and
use the state to enforce the neoliberal ideology on population "from above", using coercion,
if necessary Although they prefer soft methods (Wolin's "inverted totalitarism" captures this
difference)
Neoliberal revolutions are almost always revolutions from above (often using support of
domestic or foreign intelligence agencies), a coup d'état either via internal fifth
column (Simon Johnson's "The Quiet Coup" model -- like happened in the USA and GB ) or via
external interference (color revolution model like in Russia, Georgia, Ukraine, Moldova,
Argentina, Brazil, etc)
In essence, neoliberalism can be viewed as "Trotskyism for the rich" with the same
hegemonic drive toward global dominance (the "World Revolution" in Trotskyism terms) and
substitution of Marxists slogan "proletarians of all countries unite" with more realistic and
devious "Financial oligarchy of all countries unite." Unfortunately for classic
neoliberalism, the latter proved to be unsustainable, as contradictions between various
groups of financial oligarchy are too great, and the quest for capturing the foreign markets
pits them against each other.
After "Triumphal march of neoliberal over the globe" (which ended in 2000 with the
rejection of neoliberal model in Russia) neoliberalism repositioned itself as a "secular
religion" (only complete idiot after 2007 can believe in its key postulates and, in
particular, neoclassic economics with all its mathiness). The capture of the university
education and MSM, like for Bolsheviks before them, were two high priority tasks and they
were essentially complete at the end of Clinton administration.
Like Bolsheviks before them, after coming to power, neoliberal junta quickly moves to
capture key positions in government institutions, in case of the USA -- Treasury, FED
(Greenspan), the Department of State (neocons), and economic departments at universities
(Friedman, Greg Mankiw, Summers, Bernanke, DeJong, Krugman, etc) , in a typical ruthless
Trotskyites/Bolsheviks fashion.
While initially it strived just to completely eliminate New Deal regulations to get the
economy boost and restore the power of financial oligarchy, later neoliberalism morphed into
supported by the state "secular religion" (much like Marxism in the USSR) in which those who
do not want to became "high priest of the cult ("soldies of of the Party" in USSR terms), or,
at lease, pretend to believe in this ideology are ostracized, send to the periphery (the
State Department), and (in universities) deprived of any funding. Much like was the case (in
a more brutal form) under Bolshevism.
Now classic neoliberalism tried to defend itself against the ascendance of "national
neoliberalism" using dirty methods like Ukrainegate, using the full power of captured by them
state institutions, including, but not limited to, intelligence agencies.
Please note that, historically, neoliberalism ascendance started with the coup in Chile,
in which repressions were of the scale typical for a fascist regime, including mass killings
of opponents. That's where Friedman Chicago boys cut their teeth.
Also neocon scum (Cheney, Wolfowitz, and company) got in high level government positions
only under Reagan and quickly switched the USA foreign policy in completely imperial
direction, although the process started under Carter (Carter Doctrine, creation of political
Islam to fight Soviets, etc.). The State Department remains a neocon viper nest since this
period. And they recently managed to sting Trump (Taylor and Volker testimonies are nice
examples here)
Again too, across the Arab world, there is a legitimacy-deficit staining existing
élites. But it applies not just to the Middle East. As protesters peer around the world,
through their smart phones, how can they fail to observe the low-intensity 'civil war' –
the polarised protests – in the US, the UK and parts of Europe, waged precisely against
certain élites. What price then, western 'values' – if westerners themselves are
at war over them?
Of course, this dis-esteem for global élites is connected to that other powerful
dynamic affecting the Middle East: the latter may not be in a 'good place' politically, but it
is in an even worse place economically. In Lebanon, one-third of Lebanese are living below the
poverty line , while the top one percent hold one-quarter of the nation's wealth,
according to the United Nations. This is not the exception for the region – It is the
norm.
And intimations of global slow-down and recession are touching the region. We all know the
figures: half of the population in under 25. What is their future? Where is there some 'light'
to this tunnel?
The western world is in the very late stage to a trade and credit cycle (as the economists
describe it). A down-turning is coming. But there are indications too, that we may be
approaching the end of a meta-cycle, too.
The post-WW2 period saw the US leverage the war-consequences to give it its dollar hegemony,
as the world's unique trading currency. But also, circumstances were to give US banks the
exceptional ability to issue fiat credit across the globe at no cost (the US simply could
'print' its fiat credit). But ultimately that came at a price: the limitation – to being
the global rentier – became evident through the consequence of the incremental
impoverishment of the American Middle Classes – as well-paid jobs evaporated, even as
America's financialised banking balance sheet ballooned.
Today, we seem to be entering a new cycle period, with different trade characteristics. We
are in a post-general manufacturing era. Those jobs are gone to Asia, and are not 'coming
home'. The 'new' trade war is no longer about building a bigger bankers' balance sheet; but
about commanding the top-end of tech innovation and manufacturing – which is to say,
gaining command of its 'high peaks' that, in turn, offer the ability to dominate, and impose
the industry standards for the next decades. This – tech standards – is, as it
were, the new 'currency', the new 'dollar' of the coming era. It is, of course, all about
states maintaining political power.
So, what has this to do with the Middle East? Well, quite a lot. The new, global tech
competition implies a big problem (as one Washington commentator noted to me). It is this: what
to with the 20% of Americans that would become 'un-needed' in this new top-end tech era –
especially when lower paid jobs are being progressively robotised.
Here is the point: This tech 'war' will be between the US, China and (to a lesser extent)
Russia. Europe will be a bit-player, hard pressed to compete. If the US thinks it will end with
20% of population surplus to requirement, for Europe it likely will be higher; and for the
Middle East? It does not bear thinking about.
The Middle East is still a fossil fuel fed economy (at time when fossil fuel is fast falling
out of fashion, capital expenditure is paused, and growth forecasts for demand, are being cut).
Even Lebanon's economy – which has no oil – is (paradoxically) still an oil
economy. The Lebanese either work in the Gulf, servicing the ancillary services to a
fossil-fuel based economy and remit their savings to Lebanese banks, or work in the Lebanese
financial sector, managing savings derived largely from this sector.
The point is, how will the region find a future for a young population that is out-running
the continent's water and (useful) land resources, if fossil fuel cannot be the employment
driver?
@goldhoarder #16
Indeed. Latin and South American countries are all dominated by 200 or so families each, some
overlapping nations. These criollo families don't give a crap about the rest of the society
in any way, so long as they can keep their money and power. It is easy for even ham-handed
Americans to keep bribing one or another of these families to keep the rest mollified and the
rest of the population pacified.
Russia, China and a few other nations have different goals. Not at all necessarily
altruistic, but absolutely more cognizant of national goals and needs rather than personal
enrichment.
What's really interesting now is how the Europeans are going to turn out. Will they continue
to allow themselves to be suppressed by their Atlanticist ruling classes, even when both
absolute and relative measures of prosperity are no longer positive?
In Chile, a country of around 17 million people, more than 1 million people r out in the
streets of capital Santiago protesting neoliberalism and the US-friendly govt's repression of
protest. The Western media are curiously silent about the scale of the uprising. #
ChileDesperto
... ... ...
Once again, protests in 22 countries is rather a lot (and these, as it were,
the wildfires, not small flare-ups here and there). But note that none of the sources
(including me, "L.S.") have a consistent list; it's extraordinary that Bloomberg, which is an
actual new gathering organization, omits Haiti, and that Human Rights Watch (HRW) omits France
(since the
state violence deployed against the gilet jaunes has been significant, far me so
than Hong Kong).
So how are we to make sense of these protests? The Dean, we might call her, of studies in
non-violent protest (and hence of the violence that accompanies or suppresses it) is Erica
Chenoweth, so we will begin with her (I would classify her as an academic rather than an
advocate, like Gene Sharp.) From there, we will broaden out to look at how the data that any
academic -- and, one would think, news-gathering organizations -- would use. Finally, we'll
look at what the previous two academic approaches do not really consider: The social basis of
protests as a predictor of success.
She speculates that the cause of the this decline is due to Authoritarian Adaptation:
the ability of authoritarian governments to adopt more politically savvy repressive tools
may be part of
the reason for the decline in success rates in the past six years. 21 .
Authoritarian leaders have begun to
develop and systematize sophisticated techniques to undermine and thwart nonviolent
activists.
Chenoweth provides this table, categorizing these techniques:
table l Methods of authoritarian adaptation against nonviolent resistance 2
*
Strategies to Reinforce Elite Loyalty
• Pay off the inner entourage
•Co-optoppositionists
• Use public brutality against accused defectors to deter further defections
Strategies to Suppress or Undermine the Movement
• Use direct violence against dissidents or their associates
• Counter-mobilize one's own supporters
• Plant plain-clothes police and agents provocateurs
• Solicit the help of paramilitary groups and pro-state armed militias
• Infiltrate the movement and engage in surveillance
• Pass pseudo-legitimate laws and practices that criminalize erstwhile legal
behaviors
• Add administrative and financial burdens to civil society groups
Strategies to Reinforce Support among the Public and Other Observers
• Blame foreigners and outsiders
• Mischaracterize domestic oppositionists as terrorists, traitors, coup plotters,
or
communists
• Conceal information through censorship and spin
• Remove foreign journalists from the country
21. There may be several other reasons for this decline in effectiveness. First, because
non-violent resistance has become such a popular and widespread practice, it is possible that
those wielding it do not yet have the requisite skill sets to ensure victory. For example,
Kurt Weyland has shown that radicals in various European capitals mobilized against their
dynastic sovereigns with a sense of false optimism , having witnessed a successful
revolution in France in February of 1848 (Kurt Weyland, 'The Diffusion of Revolution: "1848"
in Europe and Latin America,' International Organization 63/3:391–423 (2009)). They
essentially drew what Weyland calls "rash conclusions" about their own prospects for success
and attempted to import the French revolutionary model into their own contexts, failing
miserably. Second, a higher proportion of nonviolent uprisings since 2010 possess
"violent flanks" -- segments or groups within the campaign that destroy property,
engage in street fighting, or use lethal violence alongside a predominantly nonviolent
movement -- than in previous decades. Violent flanks tend to undermine participation rates in
nonviolent movements while discouraging security force defections (see Erica Chenoweth and
Kurt Schock, 'Do Contemporaneous Armed Challenges Affect the Out-comes of Mass Nonviolent
Campaigns?' Mobilization: An International Quarterly 20/4: 427–451 (2015)). Whereas the
most successful decades of nonviolent resistance featured highly disciplined campaigns of
nonviolent action, today almost 50% of primarily nonviolent campaigns possess some degree of
violent activity from within .
Chenoweth's strictures on "violent flanks" may apply to Hong Kong (though it is also true
that the Hong Kong protesters have achieved their first goal, the withdrawal of the of the
extradition bill). However, we should also remember the protester's spray-painted slogan: "
It was you who taught me that peaceful marches are useless ." We have yet to see. Perhaps
practice has outrun the academics. Perhaps not. We will look at this issue more tomorrow;
obviously, it applies to Chile.
Data Gathering (Fisher, et al.)
Chenoweth's dataset of "major episodes of contention, 1/1/1900–5/1/2016" includes 237
non-violent and 235 violent cases. But if we seek to record and classify protests in near real
time, there will be orders of magnitude more cases than that. Two projects to do just that are
described by Dana R. Fisher, Kenneth T. Andrews, Neal Caren, Erica Chenoweth, Michael T.
Heaney, Tommy Leung, L. Nathan Perkins, and Jeremy Pressman in " The science of contemporary street
protest: New efforts in the United States " (Science Advances, October 23, 2019). This is a
fascinating article, which I encourage all big data fans to read in full. From the
abstract:
This article reviews the two most central methods for studying street protest on a large
scale: building comprehensive event databases and conducting field surveys of participants at
demonstrations.
Of event databases, they write:
Tracking protest events in real time is fundamentally a discovery and coding problem. It
resembles the data collection components of past efforts to study protest by aggregating data
from third-party sources (51, 54). Unique to today's environment is the sheer number of
sources and the time-limited nature of the discovery-and-review period: Given the transience
of information on the internet compared to print media, thousands of sources produce reports
of variable reliability on a daily basis. Researchers must archive and extract information
such as where, when, and why a protest took place, as well as how many people attended,
before that content is moved behind a paywall, deleted, or otherwise made unavailable.
(Encouragingly, the event database is a citizen science effort.) However:
these event-counting methods also have several reliability, coding, and discovery
limitations and challenges, including (i) resolving discrepancies in reported data, such as
crowd size, for the same event reported by multiple sources; (ii) evaluating the reliability
and bias of each source; (iii) requiring manual review of what can be hundreds of potential
protest reports every day; (iv) accurately and consistently coding events in near real time;
and (v) having an incomplete list of sources and an incomplete list of reports from known
sources.
Of field surveys, Fisher et al. write:
The complex environment of a protest leads researchers to focus their attention on several
considerations that are not common in many other types of surveys. First, it is impossible to
establish a sampling frame based on the population, as the investigator does not have a list
of all people participating in an event; who participates in a protest is not known until the
day of the event; and no census of participants exists. Working without this information, the
investigator must find a way to elicit a random sample in the field during the event. Second,
crowd conditions may affect the ability of the investigator to draw a sample. The ease or
difficulty of sampling depends on whether the crowd is stationary or moving, whether it is
sparse or dense, and the level of confrontation by participants. Stationary, sparse crowds
that are peaceful and not engaged in confrontational tactics (such as civil disobedience, or
more violent tactics, like throwing items at the police) tend to be more conducive to
research. In general, the presence of police, counter-protesters, or violence by
demonstrators are all likely to make it more difficult to collect a sample. Third and last,
weather is an important factor. Weather conditions, such as rain, snow, or high temperatures,
may interfere with the data collection process and the crowd's willingness to participate in
a survey.
The Women's March after Trump was elected was one subject of surveys:
In her book American Resistance , Fisher examined seven of the largest protests
in Washington, DC, associated with opposition to President Trump: the 2017 Women's March, the
March for Science, the People's Climate March, the March for Racial Justice, the 2018 Women's
March, the March for Our Lives, and Families Belong Together (81). Her results show that the
Resistance was disproportionately female (at least 54%), highly educated (with more than 70%
holding a bachelor's degree), majority white (more than 62%), and had an average adult age of
38 to 49 years. Further, she found that the Resistance is almost entirely left-leaning in its
political ideology (more than 85%). Resistance participants were motivated to march by a wide
range of issues, with women's rights, environmental protection, racial justice, immigration,
and police brutality being among the more common motivations (83). She also found that
participants did not limit their activism to marching in the streets, as more than half of
the respondents had previously contacted an elected official and more than 40% had attended a
town hall meeting
I think Thomas Frank would recognize "the Resistance," although Fisher seems to have an odd
concept of what "the left" might mean. For example, there's no mention of strengthening unions,
the minimum wage, or the power of billionaries, so I wonder what her coding practices were.
The authors conclude -- as a good academic should do! -- with a call for further
research:
Moving forward, best practices will require forming teams of scholars that are
geographically dispersed in a way that corresponds with the distribution of the events under
investigation. While previous studies have concentrated on conducting surveys in different
regions and in major cities, the datasets would be more representative if data were collected
in multiple locations simultaneously in a way that represents smaller cities, suburbs, and
rural areas.
Consider an event projected to take place in 300 cities simultaneously in the United
States or Europe. Suppose that the target areas were stratified into 12 regions or countries.
If a survey was conducted in three types of locations -- one city, one suburb, and one rural
site or one capital, one college town, and one urban area with neither a capital nor a
university -- in each region, that would require the survey to go into the field in 36
locations (or roughly 12% of events). Such a task would likely require a minimum of 12 to 36
scholars working together, each coordinating research teams to collect survey data at events
in their region. Even more resources and institutionalization would be required to conduct
crowd surveys at a genuine random sample of events.
Beyond collaboration among multiple scholars, scaling up the administration of surveys
would also require standardization of the instrument, sampling, and practices in entering and
coding the survey data.
Ironically, the scale of the effort to survey and record such an event -- say, each scholar
would have a team of 10, for a total of 360, would be within an order of magnitude or so of
that required to organize it! (There were 24,000 Bolsheviks in 1917). What this
article does show, however, is how blind the public and the press are flying (though doubtless
the various organs of state security have better information.)
We further develop the argument that opposition movements dominated by industrial workers
or the urban middle classes have both the requisite motivation and capacity to bring
about
democratization . We clarify how and why the social composition of opposition movements
affects democratization. We expect that both the urban middle classes and, especially,
industrial workers have the requisite motivation and capacity to engender democratization, at
least in fairly urban and industrialized societies.
Other social groups -- even after mobilizing in opposition to the regime -- often lack the
capacity to sustain large-scale collective action or the motivation to pursue democracy. We
collect data on the social composition of opposition movements to test these expectations,
measuring degree of participation of six major social groups in about 200 antiregime
campaigns globally from 1900 to 2006. Movements dominated by industrial workers or middle
classes are more likely to yield democratization, particularly in fairly urbanized societies.
Movements dominated by other groups, such as peasants or military personnel, are not
conducive to democratization, even compared to situations without any opposition
mobilization. When separating the groups, results are more robust for industrial worker
campaigns
The capacities of protestors are found in their leverage and in their abilities to
coordinate and maintain large-scale collective action. Leverage comes from the power
resources that a group can draw on to inflict various costs on the autocratic regime and thus
use to extract concessions, including political liberalization. Leverage can come from the
ability to impose economic costs on the regime, through measures such as moving capital
assets abroad or carrying out strikes in vital sectors. Other sources of leverage include
access to weapons, manpower with relevant training, and militant ideologies that motivate
recruits. Urban middle classes score high on leverage in many societies. Many urban
professionals occupy inflection points in the economy, such as finance. Industrial workers
can also hold a strategic stranglehold over the economy, being able to organize nationwide or
localized strikes targeting key sources of revenue for the regime. In addition, workers often
have fairly high military potential, due to military experience (e.g., under mass
conscription) and, historically, often being related to revolutionary, sometimes
violence-condoning, ideologies (Hobsbawm 1974).
Riots and uprisings are often fleeting, and opposition movements are therefore more
frequent than regime changes. Hence, in addition to leverage, protestors must be able to
organize and maintain large-scale collective action over time, also after an initial
uprising, in order to challenge the regime. In this regard, groups with permanent,
streamlined organizations can effectively transmit information, monitor participants, and
disperse side payments. Organizations also help with recruiting new individuals, networking
with foreign actors, and experimenting with and learning effective tactics. The urban middle
classes have some potent assets in this regard, as they include members with high human
capital, which might enhance organizational skills. Various civil society, student, and
professional organizations can help mobilize at least parts of the middle classes. Industrial
workers typically score very high on organizational capacity (see Collier 1999; Rueschemeyer
et al. 1992). They are often organized in long-standing and comprehensive unions and labor
parties and have extensive networks, including international labor organizations and the
Socialist International. In sum, we expect opposition movements dominated by the middle
classes or industrial workers to be related to subsequent democratization. Yet, we anticipate
a clearer relationship for industrial worker campaigns, due to their multiple sources of
leverage and especially strong organizational capacity allowing for effective and sustained
challenges to the regime.
Lots to ponder here, including the effectiveness (or lack thereof) of a quintessentially
"urban middle class" protest, the Women's March, potential differences between Hong Kong and
(say) Chile, and much much more -- including the operational capacities of our own working
class, and the effects of deindustrialization and gutting unions. I wonder of the condition of
teeth, as a class marker, is included in any survey coding?
Conclusion
I hope this survey of the literature has been stimulating. I will have more to say about
invididual protests tomorrow.
NOTES
[1] I'm super-uncomfortable with the "responsibility to protect" framing (which is why so
much of the focus of the article is on state violence, presumably as a justification for the
U.S. to intervene). That suggests to me that Chenoweth runs with the wrong crowd, at least part
of the time.
Back in 2004 I had a few friends working in a film shot during the RNC convention
protests. It made headlines because actress Rosario Dawson was arrested (police thought she
was an anarchist protestor). The film shoot had footage of an undercover police officer
posing as a protestor starting scuffles and trying to rile up other protestors.
It was written up in The NY Times but people still act as if this is crazed conspiracy
talk.
Of interest is the underlying assumption in the Conclusion of your post; that pre-existing
exposure to sub-national group organizing is positive towards successful outcomes. In most
situations, a Union is organized against strong countervailing pressures from the Owner
class. A winnowing out process that concentrates and toughens successful organizers has
already occurred. As it were, protests that draw on extant Union personnel have an automatic
advantage. An entire step in the organization formation process has been rendered irrelevant.
Access to "off the shelf" organizers will jump start a movement.
As a corollary to the above, I note the absence of an even semi-professional class of
agitators in the United States. Not so do I note an absence of outright professional Organs
of the State: Oppressors.
A century ago, the world had several international organizations seriously dedicated to the
subversion and overthrow of "Free Market" Capitalism. Today?
A century ago, the world had several international organizations seriously dedicated to
the subversion and overthrow of "Free Market" Capitalism.
True, and that complicates the studies Lambert cites in at least two ways.
1. In what Lambert reports, and I think he's got the drift of their arguments, the
distinction between violent and nonviolent movements ignores the way in which nonviolent
movements have deployed the threat of violence precisely by offering themselves as a
nonviolent alternative. Within the Civil Rights movement in this country "if you don't
listent to us, you'll get them" was part of King's message to white elites, with "them"
referring to everyone from Malcolm X to the revolutionary elements of international Marxism.
Others with a better understanding of India's independence movement could find a
parallel.
2. Running in the opposite direction, international movements, particularly on the left,
have often been a brake on local initiative. The Trotskyist critique of Stalinist practice,
wherein the Stalinist international imposed, often murderously, controls on national
communist parties to avoid (overly) antagonizing the bourgeois international, is at least
historically accurate, however much one might dispute its strategic validity. This isn't so
immediately relevant to the violent/nonviolent question, but it does help foreground the
international context that the summarized articles appear to lose track of.
Especially due to (1) the data behind the graph needs a good review for 'interactive
effects' of this sort.
3 weeks ago I witnessed a large protest on the streets of Seoul, I'd think at least 50,000
people. But it was mostly elderly folk and very right wing, essentially protesting at what
they see as Government policies that are too pro Chinese and pro North Korean. The protests
were clearly well financed and organized – the banners were mass produced and
'non-official' ones were almost all pushed to the fringes. Locals were contemptuous, saying
they'd all been paid to turn up and bussed in from the provinces. There were smaller protests
on other days. All were peaceful.
I also saw the aftermath of a very big protest in Hong Kong A few days before. There was a
lot less damage than you'd think from the international reporting, a few shops burnt out. But
I was left with little doubt that there was a lot of 'silent' support among regular HKers and
even ethnic Chinese (mainlanders) for the protests.
The winners write history. Surviving losers also rewrite history ('Gone with the Wind").
Or, past lives are never written about at all. The problem is that western government has
swirled down the drain into incompetent delusion. Corporations rule. Plutocrats are in combat
over the spoils. Protests won't work until police and mercenaries realized that they aren't
being paid enough to die or to subjugate their own families.
Right now, the problem is two million Californians forced out of their homes or waiting
with no electricity for evacuation orders. The American government is simply incapable
rebuilding Puerto Rico or Northern California. Or handling global plagues such as African
Swine Fever that has already killed a quarter of the global pig population. Simply put,
climate change, overpopulation, and rising inequality assure that revolutions cannot be
orderly.
The 10% Technocrats like Elizabeth Warren will try to keep things running until they can't
anymore.
I don't see how the protests in Spain by Catalan nationalists are a case of political
freedom.
If you believe that the right of self determination means that countries like Spain are
divisible, then why not also allow Catalonia to also be divisible? And let people in every
city, town, street, and house be able to decide which country they want to split off or
join?
I would have complete sympathy if Catalans were protesting against any legitimate
oppression regarding their language or culture, or any other related discrimination. Why
don't more Catalans simple work with others in Spain and the EU to make it more equal, fair,
and just, than give in to racist nationalism?
The modern world simply cannot afford to allow nationists to split up the world into
smaller pieces, which often leads to wars, ethnic cleansing, and additional oppression of any
remaining "non-pure" people.
This is a good question for which the stupidity of brainless nationalism has no answer
(nationalism musn't be brainless but too often it is). In reality this is more an struggle
for political power rather than fight for rights. And of course, although less noisy, there
are many catalans that don't give a damn on independence. Only, or as many as, 42%
of catalans ask for a referendum on independence but a larger majority prefers
negotiations on autonomy.
One would think that brexit is a good example of what could go wrong on badly thougth
procedures of independence but blind nationalism, always believes in its exceptionality. You
can compare the Torras and Puigdemont of the moment as illuminated as Jonhson or Blair in
their own moments: feeling incapable of wrong doing and above procedure rules. A recipe for
disaster if they ever prevail.
As an example we have Mr. Utility Friendly Torras, current president of the Generalitat,
going his way on energy policy and giving still validity in Catalonia to an anachronic decree
approved in Spain by his co-religionary Rajoy (but hated because, you know, spanish) in 2009
–and now derogued– that was a stop signal for the development of renewables. This
occurs even when the Parliament od Catalonia has already repealed the decree. Shows the kind
of respect this great leader has for procedures when anything does not align with his
ideas.
If Gazans wanted political freedom, they'd be rioting against Hamas, which has refused to
hold general elections for eight years and kills its political opponents and civilians who
object to their policies. What they really want is dead Jews.
The Gazans are in a tough spot. The surrounding states view the Gazan situation as a spur
in the flank of Israel. The constant threat of the descendants of those Arabs 'ethnically
cleansed' out of the whole of Palestine in 1947 being sent into Israel to reclaim their
ancestral lands is a constant in the Arab state's permanent conflict with the State of
Israel.
The alternative offered to the Gazans is to become permanent second class citizens in a
Greater Israel. Actually, make that third class citizens. At present, Israel has First Class,
comprised of the Orthodox religious Jews, Second Class, comprising the Secular Jews, and
Third Class, all others.
As for self rule, with a dollop of actual democracy, well, easier said than done.
" Violent flanks tend to undermine participation rates in nonviolent movements while
discouraging security force defections"
Ecuador and Chile pose a challenge to that theory. The events there are significant in
themselves, because traditionally, capturing the capital constitutes victory, whether a
revolution or an invasion. In Ecuador, that was clearcut: the demonstrators – not very
non-violent – controlled the capital and drove the government out of it, then continued
a rampage against government buildings. The president, from Guayaquil, ordered the military
to remove them – which didn't happen, probably for ethnic reasons. As before, this was
essentially an Indian uprising. Moreno caved, which means he can't meet his agreement with
the IMF. This was the IMF riot to end all. And we were just talking about retiring in
Ecuador.
In Chile, more than a million people in the street have essentially captured the capital,
as the videos make clear. Nothing is going to move, short of extreme violence. Again, the
president capitulated and undertook to meet the demonstrators' demands. That one wasn't
really non-violent, either, though the culminating demonstration was.
In both cases, victory is somewhat qualified because the right-wing president remains; the
real result remains to be seen – but notice has been served. If that process continued
much further, he could be lynched in the street. (I do wonder why Chile re-elected a
right-winger, only a year ago. They now have to reverse an election.)
And looking at the map: the US isn't there. A hyper-violent police force alienated from
the public might be a factor.
> Ecuador and Chile pose a challenge to that theory
I think Chenoweth's perspective could be a bit US-centric, or academic-centric. I have to
admit that one reason I agreed with her is that the black bloc's role in Occupy was so
pernicious (with "diversity of tactics" being on a par with "innovation" and "sharing" for
seamy tendentiousness). I think in the United States we are not ready, as it were,
for "violent flanks."
So when I started following Hong Kong, I viewed matters at first through the Occupy Frame
(and the black-clad protesters didn't help me avoid that). However, it's clear that a
substantial portion of the population really does see then as "front-liners," as in America
we would not. Further, property violence seems carefully calibrated, as in the United States
it is not. So I was wrong.
Thanks, Lambert; I get that Here; in the U.S. it is *divide and conquer* , or conquering
by division as long as we fight with each other over *hot button* topics; we can't get
together to deal with the big; underlying issues.
There's another kind of protest entierely; the entiely fabricated protest as means of
pro-establishment propaganda. Here in Portland, OR, we've been treated to some breathlessly
sensationalized street battles between ostensibly far right and far left 'protesters'.
Eyewitness accounts speak of supposed ultra-conservative activists popping out of the back of
police vans to instigate dustups. And anyone who's not wholly ignorant of the infiltration of
left activists in the 60s knows just how easy this is. A Punch and Judy show managed from FBI
headquarters which is then reported by hyperventilating media. Fox News shows us raggedy
Bolsheviks with bandito massks beating up clean cut journo Andy Ngo (who then goes on the
pro-Israel circuit after recovering from massive brain trauma!) Then switching to Amy
Goodman, you get bald thuggish looking white guys with tattoos variously of Christian and
Viking themes (how exactly these really mesh in anyone's mind, I don't quite get-but that's
supposing it's real) forming a phalanx and waving confederate flags.
The entire thing seems fabricated to push fretting liberal homeowners and Responsible People
to support the 'radical center' of neoliberal Clintonism.
Since you live in Rose City, feel free to go on down and meet the "raggedy Bolsheviks" for
your own self. Or talk to the nazis, most are friendly enough to 'non-combatants'.
No doubt there are false flaggers and cops in both groups, but I assure you the conflict
itself is not staged.
Thanks for starting to wade into this topic. I appreciate the academic sideboards as a way
to discover the common elements. Which will help us with the revolution against neoliberalism
here in the US.
let me add my thanks for this round up. I look forward to continuing coverage on this
topic and especially beg those living outside the US, most especially those speaking the
local languages to give us the benefit of your observations.
Marcie Smith has done amazing research into the "guru of nonviolent revolution," Gene
Sharp, who turns out to be a CIA tool responsible for the "nonviolent" color revolutions
which were just an easier assertion of soft power than those annoying invasions and
coups.
So amazing that you can't be bothered to supply readers with the link?
Here is it is . I think Smith
oversimplifies ; I also think misuse of Smith's work leads to a quasi-religious tendency
("faith is the evidence of things not seen") to imagine CIA agents behind every protest sign,
and to imagine Sharp as a Saruman-like figure controlling the action from a distance, all of
which is both untrue and demoralizing/disempowering. You also seem to think that Sharp's
techniques substitute for invasions and coups; but in Serbia they clearly did not,
since we had both Otpor and bombing; and in Tahrir Square, to the extent that Sharp inspired
that protest -- the hashtag #GeneSharpTaughtMe was widely used at the time, in mockery -- an
invasion wasn't even an option. It's also not clear that the outcome of Tahrir Square was an
outcome we even desired; clearly the protesters had no idea what to do with power if they
won, which one would think their case officers would have handled as a matter of course.
The reflexiv sequence protest -> color revolution -> Gene
Sharp -> CIA seems deeply attractive to some soi disant leftists;
it's so mechanical and pointless and self-defeating it makes head hurt and my back teeth
itch. (Even at the best, it's like arguing that because the Germans sent Lenin over the
Russian border in a sealed train in 1917, that the Bolsheviks were all a plot by Kaiser
Wilhelm II.)
I'm also curious why you even bring up Gene Sharp. The post doesn't mention him. Is it
your thesis that the CIA is behind all the global protests?
This is a good point.
Not all opposition is controlled, but that does not mean the forces of the ancien regime
don't try. The upheavals in Egypt caught the neoliberal paladins by surprise and caused much
dismay. That the Army brought the mild islamist party leader down in a counter-doup is not a
symptom that the entirety of the Tahrir Square enterprise was a CIA orchestrated hoax of some
kind. Just that the US was happy to let Morsi hang once the Generals got their act together.
There certainly are many pro neoliberal coups that dress themselves up in liberatory
clothing. (Maidan and Georgia are the claerest examples.)
Gene Sharp, from everything I've seen on him and his career, showed him to be a true
believer in neoliberalism and the empire that propped it up. I suggest people look into his
views on the "free market," and its relation to democracy, to see what he was really
about.
What was the name of the institute he headed over at Harvard for so many years? Why, it
was the "Center for International Affairs"! Now why did they decide to rename that, after
waves of student protests against it? The acronym just a little too "on the nose?" He seemed
like a willfully ignorant dupe working alongside a long list of cold war psychopaths. Whether
or not he "believed" this or that, about his own work, is irrelevant.
Not to mention the underemployed -- the ongoing commitment of western regimes to inflation
prevention at the expense of labor wastage and the consequent immiseration of the citizenry
is scandalous.
Kenneth Pomeranz's "The Great Divergence: China, Europe, and the Making of the Modern
World Economy," basically proves your point very effectively. Pretty much beats down any
crypto-racist theories on the superiority of "western civilization," etc. China didn't have
coal, simple as that.
I would say that one has to categorize "protests" in order to uncover how they relate to
social relations of power. Violent vs non-violent framing is useful if you want to argue that
violence is not just immoral but actually impractical. If you want to try to prove the
eternal moral basis of the liberal order, it's great. If you really want to uncover how
conflict and power work, you need more vectors.
Complicate Chenoweth's liberal framing by adding more categories. What's the goal of the
movement? Is it revolutionary of reformist? Is the movement organized or diffuse? If the
violence is diffused is it lumpen rioting and random terror? If the violence is organized is
it terror cells, military columns, foreign invasion or something else? If the movement is
organized non-violent, does it exist at the same time as an organized violent movement with
similar goals? If the movement is organized non-violent, are the people in it armed but not
using the arms? If the movement is diffused non-violent is it actively opposed to violence?
Every combination matters in context, and the reform vs revolutionary labels absolutely
matter. There is a big difference between demanding the end of a fuel tax and demanding the
end of capitalism. There is a big difference between the treatment of armed people and
unarmed people by security forces, depending on the context.
In general IMO, reforms under liberalism can be captured through non-violent protest, and
diffused violence can harm their chances because they give security forces an excuse for a
crackdown. The organized threat of violence can help organized non-violent reform protests
because it scares the ruling class (BPP in the USA is a great example), but organized
violence itself can harm non-violent reform protests unless it's successfully revolutionary.
Revolution (not just a change in government!) can never be achieved through non-violent
protest, because the ruling class will use violence to save themselves.
Area Man@14 writes nothing, actually. I might attempt to refute his views if were so
innocent as to make them known. But I can't help feeling that if this were a real comment even
an Area Man might care to know more details I strenuously disagree upon. There are times when
the accusations of incoherence are prompted by comments that altogether too easily understood
yet not easily refuted. I think this is such an occasion.
faustusnotes@16 at least makes an effort. First, translation is treason to the author. My
attempt at translation didn't make it clear likbez does *not* see any color revolution afoot in
the US, but merely attempts to use some of the techniques here as used abroad. And in fact one
of the points he makes is about why they aren't making any headway. But faustusnotes is
perilously close to denying that there is such a thing as a color revolution, or at least,
insisting against the evidence color revolutions really do lead to the expression of the
people's will. I hope not, as that is a shameful position to take.
The removal of Lula via false charges, to allow faustusnotes' friend Bolsonaro to ascend to
the Brazilian presidency, is exactly the kind of color revolution mechanism likbez is thinking
of, I believe. The insistence that Trump really is a traitor because "Russiagate" and
"Ukrainegate" is preposterous for exactly the same reasons accusations of treason against
Clinton for Benghazi and emails were preposterous. The only reason for a double standard is
rotten, reactionary politics. So far from thinking a color revolution is going to ensue, likbez
is inclined to think this scheme may even backfire, and help Trump. That's why Pelosi (and
reactionaries-at-heart, like LGM) were so opposed to even talking impeachment for so long,
until they found a sufficiently reactionary cause. Impeachment on a leftist charge is
unendurable for this lot! The insinuation that removing a president isn't revolutionary at all
is, well, the best phrase I can think of, is, hiding in a dictionary.
All faustusnotes' remarks to this point smack of the sleazy, but at least they are
semi-defensible as clueless pedantry and petty malice. The breath-taking arrogance in
pronouncing "Japan, Korea, China, Australia, NZ and Germany" don't have "rigid" class systems
is very convenient, but not actually facts, much less a refutation. [Talking about Germany's
class system without thinking of Gastarbeiter is preposterous, for a single example.]
The proffered history of class society is also deranged, as England had classes before 1066,
for a single example. it is also moving the goalposts. The issue of course is that since about
the middle seventies, real wages for most families have stagnated, even if you don't think the
need for so many wives to work outside the home is any issue at all. It appears that
faustusnotes has complete rejected the notion of a Great Compression, too. I must say, that's
bold! Lastly on this point, too, non-rigid class societies are very much so because of economic
growth offering opportunities. It was likbez who was making an issue of secular stagnation
changing class politics. Unlike faustusnotes, I don't think this is manifest absurdity, as
it has something to do with reality. I'm not sure faustusnotes even accepts there are issues
with stagnation, much less that it has social and political consequences.
By the end faustusnotes has completely lost it. I almost missed it, but the phrase
"Putin-fluffing" is apparently a reference to porn, where off-camera parties help get stars
ready for their scenes, or maybe keeps them from being distracted by the film crew? What brings
on this scurrility is the mention of Biden's corruption. The obvious reason for people talking
about Hunter Biden and Burisma now is simply that most of us hadn't heard of Burisma. The mass
press is very selective in its coverage.
I cannot speak for likbez on this, but I firmly believe a cardinal principle of politics is,
the true corruption of a system is what's legal. I also believe that Hunter Biden's influence
peddling is legal, but for peons such as myself, still corrupt. Biden was already disgraced by
being Obama's vice president, proving he would never really change anything, not even if given
a mandate for change. I can't admire such solicitude for Biden.
I'm not quite sure what nastywoman@17 is saying. It sounds something like the EU is a
spiritual ideal walking the earth, and it will inspire the masses to reject revolution in favor
of social democracy, which to be honest sounds much crazier than likbez, even in the hostile
misreadings. But the truth is, I could very well be wrong, as I find nastywoman to be
incoherent in a way I've never found likbez.
All of these events are symptoms of the real problem which those pulling the strings behind
the scenes do not want to admit to, most of the people hate both them and their grand
plans...
I have a take on Neoliberalism- it's pretty poorly informed, but then a lot of people have
pretty poorly informed takes on this subject.
There are actually three phenomena that masquerade under the name Neoliberalism:
A) A situation of class power in which elites are claiming an unusual portion of the
spoils.
B) A special strategy by which that unusual portion of the spoils is extracted (economic
policy done on a purely efficiency basis- unweighted CBA.)
C) An ideology that justifies B.
I think C) has fallen, although it retains a pallid existence in economics departments for
want of a clear alternative.
B) has not entirely fallen, but has come under severe pressure, as elites have become more
willing to adopt extractive strategies which clearly aren't even pretending to be efficiency
based.
A) on the other hand is doing fine. It's perhaps a tad more nervous than it was in the
past, but only a tad.
Whether phrases like "national neoliberalism" makes sense will depend on what you identify
as the key portion of the beast. Is it the ideas, the policies, or an overall balance of
class forces that you identify with "Neoliberalism"?
I think calling a specific balance of class forces that does not favor the working class
"Neoliberalism" is too much of a stretch on the original meaning of the term- which clearly
concerned a specific specific ideology and strategy. On that basis, I would say that
Neoliberalism is dead or dying, and has been replaced with something far more openly venal.
The unusually complete dominance of the ruling class has not (yet) diminished, but its
accouterments have changed entirely.
Indeed venality seems to be the dominant feature of the ruling class in this period- a
kind of dissolute uselessness that, somehow, is associated with no visible diminishment of
power. On that basis I propose that the GFC marked the beginning of the Venal Age.
There are actually three phenomena that masquerade under the name Neoliberalism:
A) A situation of class power in which elites are claiming an unusual portion of the
spoils.
B) A special strategy by which that unusual portion of the spoils is extracted (economic
policy done on a purely efficiency basis- unweighted CBA.)
C) An ideology that justifies B.
I think C) has fallen, although it retains a pallid existence in economics departments
for want of a clear alternative.
B) has not entirely fallen, but has come under severe pressure, as elites have become
more willing to adopt extractive strategies which clearly aren't even pretending to be
efficiency based.
A) on the other hand is doing fine. It's perhaps a tad more nervous than it was in the
past, but only a tad.
That's an interesting observation. I never thought about the possibility to decompose
neoliberalism in such a way. Thank you !
As a side note, I think you slightly underestimate the level of anxiety among the USA
financial oligarchy. Jamie Dimon desire for "kinder gentler capitalism", his sudden
willingness to pay higher taxes (with the precondition that the government spends it wisely
;-) and his statement that student lending in the U.S. has been "a disgrace" and it's
"hurting America" clearly reflect a slightly different condition then "a tad more
nervous".
He is willing to betray three classic neoliberal postulates at once. That's probably can
be characterized more close to panic, then "a tad more nervous".
On the other hand "the absence of clear alternative" is what prolong the life of
neoliberalism in its current "zombie" state. And the term "zombie" state in turn presuppose
increased venality and bloodthirstiness of the neoliberal elite, along with the increasing
level of moral and social degradation (Trump, Biden, Schiff, Epstein, Clinton, etc )
So the increasing venality of neoliberal elite can probably be viewed as yet another
manifestation of the crisis of neoliberalism.
Actually amorality and criminality of neoliberal elite and the increasing level of its
rejection by the "deplorables" should probably be viewed as one of the defining features of
the current stage of neoliberalism.
The growing view on neoliberal MSM as "fake news" might be yet another symptom along the
lines of classic Marxism "revolutionary situation" definition: when the elite can't rule "as
usual" and "deplorable" do not want to live "as usual".
From Wikipedia
Lenin describes the "revolutionary situation" as follows:
"To the Marxist it is indisputable that a revolution is impossible without a
revolutionary situation; furthermore, it is not every revolutionary situation that leads to
revolution. What, generally speaking, are the symptoms of a revolutionary situation? We
shall certainly not be mistaken if we indicate the following three major symptoms:
(1) when it is impossible for the ruling classes to maintain their rule without any change; when there is a crisis, in
one form or another, among the "upper classes", a crisis in the policy of the ruling class, leading to a fissure through
which the discontent and indignation of the oppressed classes burst forth. For a revolution to take place, it is usually
insufficient for "the lower classes not to want" to live in the old way; it is also necessary that "the upper classes should
be unable" to rule in the old way;
(2) when the suffering and want of the oppressed classes have grown more acute than
usual;
(3) when, as a consequence of the above causes, there is a considerable increase in the
activity of the masses, who uncomplainingly allow themselves to be robbed in "peace time",
but, in turbulent times, are drawn both by all the circumstances of the crisis and by the
"upper classes" themselves into independent historical action.
very year, when it comes time for a publicly traded company to make its annual report to shareholders, its CEO writes
a letter thanking those shareholders for owning their stock, reflecting on the company's wins and losses, and
offering some forward-looking projections for how that company will perform in the future. While most of these
letters typically consist of misleading graphs that help break up pages of fluffy bullshit about how the CEO is
focused on the long-term growth of the company and doesn't care whether the stock price goes up (while also
justifying the stock buybacks that artificially prop it up), some corporate bigwigs like Jeff Bezos and Warren
Buffett use their annual letters as an opportunity to reflect on the nature of the world, the nature of business, and
the nature of the world of business. Such letters are tomes of Fake Deep wisdom, revered by dudes who like to dress
"zany" on Casual Friday. Jamie Dimon, CEO of the megabank JPMorgan Chase, is one such epistolary-minded titan of
industry.
Jamie Dimon is a famous CEO for two reasons. One, he is very good at fulfilling his "fiduciary duty" to
JPMorgan Chase's shareholders by creating value for them -- most notably during the financial crisis of 2007-2008,
when he was able to keep the company afloat at a time when basically every other bank was going under. Two, he
oversaw JPMorgan Chase at a time when it was handing out a shitload of the bad loans that helped cause the financial
crisis of 2007-2008, and in 2012, personally approved the actions of Bruno Iksil, the so-called "London Whale" who
placed such heavy derivatives trades that he singlehandedly lost JPMorgan Chase $6 billion. Together, these scandals
resulted in JPMorgan Chase paying a total of roughly $14 billion in fines over the course of 2013 (about
$13 billion for helping cause
the recession
, plus a cool
$920 million
for the London Whale).
People in the finance world tend to focus on thing one (the good thing), while those of us in the real world tend
to focus on the bad thing, a.k.a. the shoddy mortgages and irresponsible trades and billions of dollars in fines and
all that. Intuitively, this makes sense: If a bank such as JPMorgan Chase is creating value for its shareholders,
that value has to come from somewhere, frequently its customers. In other words, your opinion of Jamie Dimon probably
depends on whether or not you're on the receiving end of his innovation that the bank industry should engage in the
upward redistribution of wealth.
For Dimon, however, this is not enough. He is a well-known public figure, and it must be sort of a drag, I assume,
to be hated by millions of strangers. Plus, if it could be said that you were both a cause and a beneficiary of the
financial crisis, you might be interested in rehabilitating your image just a tad.
In recent years, Jamie Dimon has tried his hardest to take advantage of the incredibly low expectations America
holds for its richest citizens, who can say things like "capitalism might have some problems, honestly" and be hailed
as brave visionaries. Last January, the bank announced it was raising the minimum wages of its lowest-paid employees
to $15-$18 per hour, essentially voluntarily meeting the demands of the significant coalition of activists advocating
for a national minimum wage of $15 per hour. On March 14, it was announced that JPMorgan Chase would
no longer finance private prisons
, while
a few days later, Dimon did, indeed,
admit
that America was
"fundamentally anti-poor."
A 2013 photo of Dimon and Mary Callahan Erdoes of JPMorgan Chase with Gary Cohn
and Dina Powell, then of Goldman Sachs, both of whom went on to work in the Trump administration.
Via
Wiki Commons
It's his annual shareholder letters, though, where Dimon really relishing in talking his shit. While high-level
finance people tend to promote a specific vision of the world in which peace, or at least global stability, and the
spread of free-market capitalism go hand in hand -- after all, if your country is involved in a serious war, you
probably aren't thinking too hard about getting a loan to start a business or buy a house -- Dimon's shareholder
letters have taken on an activist edge in the Trump era. This started in April of 2017 with his letter shareholders
covering the 2016 fiscal year, in which he advocated for an increase in education spending offset by decreased
military budgets, lamented the effects that increased healthcare costs and mass incarceration have had on the
economy, and generally came across, as
The New
Yorker
joked
, "like a more restrained Bernie Sanders."
These themes, of economic inequality and the stagnation of American middle-class progress, were also present in
his
most recent shareholder
letter
, which was issued early last week. In tone and substance, it is not substantially different from the 2017
letter, once again touching on the numerous ailments to the United States that most rational people agree really
ought to be fixed. "America has always had its flaws," Dimon writes. "Some of its more recent issues center on income
inequality, stagnant wages, lack of equal opportunity, immigration and lack of access to healthcare." Which, yeah,
sure, fine. I'm a firm believer that you deserve credit for being able to point out there's a bird in the sky even if
you only know it's there because it just crapped on your head.
But then Dimon gets to the really good stuff:
Is capitalism to blame? Is socialism better?
There is no question that capitalism has been the most successful economic system the world has ever seen. It has
helped lift billions of people out of poverty, and it has helped enhance the wealth, health and education of
people around the world. Capitalism enables competition, innovation and choice.
I point this passage out specifically because it's more or less a mashup of rhetoric used by The Heritage
Foundation (read the first paragraph of
this
), as well as Sean Hannity (read
this
transcript
and keep scrolling until you get to the part where he screams about Alexandria Ocasio-Cortez), and
also because whenever a rich finance guy starts talking about socialism you know you're in for a wild ride. He
continues, with some even better stuff:
When governments control companies, economic assets (companies, lenders and so on) over time are used to further
political interests – leading to inefficient companies and markets, enormous favoritism and corruption. As
Margaret Thatcher said, "The problem with socialism is that eventually you run out of other people's money."
Socialism inevitably produces stagnation, corruption and often worse -- such as authoritarian government officials
who often have an increasing ability to interfere with both the economy and individual lives -- which they
frequently do to maintain power. This would be as much a disaster for our country as it has been in the other
places it's been tried.
This assertion, coming from Dimon, is hilarious, given that when Jamie Dimon controls a company, he will further
its interests politically by
personally calling legislators trying to convince them to vote for bills that will make him money
, as well as do
things that interfere with the economy -- such as helping cause a financial crisis -- and individual lives -- such as
screwing people over by giving them loans despite knowing they weren't in a position to pay them back. Throw in his
random invocation of Margaret Thatcher, and I offer the above passage as proof that Jamie Dimon is at least as funny
as mid-tier comedian Colin Jost.
The fact that Dimon is so incensed by the specter of creeping socialism is telling. It's easy to imagine a world
in which a politician like Bernie Sanders or Elizabeth Warren becomes president, nationalizes the healthcare system
to at least some degree, and then causes people to wonder what other stuff should be taken out of the hands of
profit-seeking CEOs with a hard-on about dividend increases. For years, Sanders has
advocated for revitalizing the lagging postal system by authorizing every post office to perform basic banking
services
. Meanwhile,
the idea of communities
putting their money in state-owned public banks
, rather than privately held banking institutions, is growing in
popularity, especially as
operators in the
legal weed industry need a place to put all their cash
. Hell, even Andrew Yang's goofy-ass "everybody gets a
thousand bucks a month, ESPECIALLY gamers" platform might convince people that they don't need banks such as JPMorgan
Chase to live their lives. I realize that personal banking, which I am referring to above, only makes up a fraction
of what large banks such as the one Dimon runs actually does, but megabanks only work if they have other people's
money to do crazy shit with, and in a more socialist country, those other people might put their money elsewhere and
put the Jamie Dimons of the world out of a job in the process.
Politically, Dimon could best be described as a "centrist" in the Howard Schultz sense of the word: socially
liberal, but with a self-serving fiscal sensibility that he convinces himself is not somehow at odds with whatever
"progressive" views he might have. In that same shareholder letter, Dimon praises Trump's big business-favoring tax
cuts before arguing that they don't go far enough: He claims that countries, in order to reap
any
taxes from
large companies, need to bend over backwards before those companies find another country that will. He doubled down
on this assertion yesterday while
appearing in front
of the House Financial Services Committee
, offering his weaselly "Eh, whaddya gonna do?" argument in response to
a barbed line of questioning from Rep. Nydia Velazquez.
"It's not enough just for companies to meet the letter and the spirit of the law. They can also aggressively work
to improve society," writes Dimon as he inches towards the conclusion of his 50-page letter that, frankly, I wish I
had not read the entirety of. In his view, governments should act more like companies, competing with one another in
order to earn the pittance of tax revenues doled out by global megacorporations. It only follows, then, that he
thinks companies should conduct themselves more like governments, engaging in ostensibly selfless efforts to improve
society for the better. This is a tack I suspect we'll see more of in the future, a fundamentally conservative appeal
made by those in positions of power that uses the language of social justice to cling desperately to a status quo
that ultimately favors them, rather than dramatically shifting power away from those who have proven that they in no
way deserve it.
Hearing a CEO like Jamie Dimon argue that the solution to capitalism is for he and his colleagues to aspire to a
greater degree of social responsibility is not unlike hearing an unrepentant alcoholic argue that the solution for
drunk driving is for he and his drinking buddies to take driving lessons -- after all, if you take their licenses
away, how the hell are him and his friends going to get around town? Jamie Dimon's billions of dollars in fines does
not grant him an ounce of moral clarity; he is vaguely woke strictly out of a sense of self-preservation.
The metaphor I used in the above paragraph was not 100 percent apt. After all, driving under the influence of
alcohol is a clear, and clearly punishable, crime, but there is no equally enforceable law for serving as an
accessory to a recession. So let me try again: If a soldier returns home from combat to tell you that war is hell,
then you should believe them; if a banker returns from paying $14 billion in fines to tell you that America is
broken; then you should believe him as well -- and then throw him in jail for breaking it.
Since the moment the votes were totaled in the June 2016 Brexit referendum there has
been nothing but handwringing about what it implied
. The Brexit vote showed, quite
clearly, that
growing political unions were unsustainable.
It was the first in a series of electoral losses where the people finally said enough to
an expanding EU.
Four months later the US voted Donald Trump
, of all people, into the
White House, again throwing into the air another 'two fingers up' to the Western political
establishment that wanted to break down borders and blur the lines between nation states.
Trump's first moves were to nullify the Paris Accord on Climate Change and both the TTIP and
TPP. These are all globalist, transnational treaties designed to usurp national governments and put
control of the world economy into the hands of corporations with little recourse to the courts for
those harmed.
In 2017 Catalonia held an independence referendum against the wishes of Spain's
government
which used force to stop it from happening. Today the leaders of that
independence movement are convicted felons in exile facing more than a decade in prison while the
streets of Barcelona are filled with outrage.
In Italy, dire conditions there thanks to the euro
, Angela Merkel's
immigration policy stemming from a failed bid to atomize Syria and the growing EU political
integration,
ended the 2018 election with two Euroskeptics from opposite ends of the
political spectrum
forging a populist government. This was eventually betrayed by one
party, Five Star Movement, through the undemocratic process of refusing new elections because the
polls had shifted further away from the pro-EU position.
The polls have not shifted back even though Matteo Salvini and Lega have been deposed from
power.
Germany's 2017 election ended with another unpopular, and now distinctly minority,
coalition forming to stop Euroskeptic Alternative for Germany (AfD) coming to power.
The Greens are ascendant as the Social Democrats collapse. Merkel presides over a zombie Bundestag.
And today, three years after Brexit and Trump's victory, powerful forces are working expressly
against the people to overthrow both of these results through cynical and reprehensible acts of
political vandalism, hamstringing leadership without a care of the long-term societal damage it is
causing.
In fact, I'd argue that the societal damage is the goal of these moves to thwart the
people's desires in the hope that they take it out on each other rather than the ones setting the
table in the first place.
The endless maneuvering in the British Parliament to block any form of meaningful Brexit has
placed Prime Minister Boris Johnson in the position of having to sacrifice part of his country to
have any chance of success.
And what success he's achieved still leaves Brexit's fate in limbo. So, in effect, he's won the
ultimate Pyrrhic victory which will leave him in a political no-man's land after finally getting a
general election held where the Tories have to ally with Nigel Farage's Brexit Party to have a
prayer of forming a government capable of governing.
All of these events are symptoms of the real problem
which those pulling the
strings behind the scenes do not want to admit to,
most of the people hate both them and
their grand plans.
We live in a rapidly decentralizing age where technology gives us access to information in real
time that used to take us months, if not years, to properly disseminate and then it was only to
those who were already fellow travelers.
And that has empowered in ways no one currently wielding power is comfortable with.
The reality of reaching out en masse to others along the political and socio-economic spectrum
to discuss the merits of changing the course of society was simply not possible even ten years ago.
And today those forces of decentralization are the real problem facing these elites who have
enjoyed the illusion of running the world for the past few generations.
But these events like Brexit, Trump, Catalonia and others are castigated as the real
problems not the symptoms of the much deeper problems caused by unsustainable political and
economic systems based on fraud, cheap money, theft and propaganda.
George Galloway, writing for RT, identified a real divide within the United Kingdom that Brexit
has exposed, the fallacy that Ireland is two separate countries.
The six counties of the north east of Ireland were unnaturally torn from the Irish motherland a
century ago, but its status was always historically speaking, doomed.
Despite its Gerrymandered borders, tortuously carved to ensure a built-in Protestant
(pro-British unionist) majority, and its near-apartheid treatment of its Catholic minority
including disenfranchisement of many, the writing was already on the wall. As my own family
demonstrates, Catholics simply have bigger families than Protestants. That and the emigration of a
steady stream of educated Protestants unwilling to stick around in the thoroughly abnormal statelet
they call Northern Ireland. Neither Irish nor British, dominated by a brand of sectarian politics,
at least half-a-century an embarrassment, a steady stream of northern Protestants simply voted with
their feet and a ticket to England.
George goes on to say that despite the noises from the Scottish National Party (SNP) the
likelihood of Scotland trading its current support structure coming from Westminster to the
austerity demanded by Brussels is laughable.
I won't argue with George on that, he knows his people far better than I do. But I will say that
the divisions between these countries – England, Scotland and Wales – are deep enough that a
breaking point isn't far-fetched.
What is very clear to me, however, is that even older unnatural agglomerations of
'countries' into constructs like the U.K. are showing the strains of holding fast against a world
where technology is rapidly empowering individuals to trade across arbitrary political borders.
This is in stark opposition to the arguments for the European Union; that to compete the small
countries of Europe need a big common political structure to compete against the U.S, India, Russia
and China.
But the reality is that those big countries are all at different points along the same path the
U.K. is on with respect to Ireland. From where I sit, the US is becoming multiple regional fiefdoms
just like the U.K.
We are quickly becoming peoples separated by a common language, to invoke George Bernard
Shaw, which is sowing enmity and division between the states to levels that haven't existed since
the run up to what is commonly misreferred to as the US Civil War.
Properly framed, that war was one fought by President Lincoln to preserve the Union not stave
off an attack on Washington by forces that wanted to wrest control of the government. That is a
civil war.
The wars being fought today by the leadership in Brussels are similar to the one Lincoln fought.
These are political wars fought against the current will of the people to prevent secession from
the EU – Brexit, Italeave, Catalonia.
When people are denied their rights through the political process, however, the inevitable next
step is through violence. And that is what comes next unless those in power accede to reality.
For his part, Donald Trump is beginning to see this with respect to US occupation of
foreign countries like Syria and Afghanistan. In the coming weeks Iraq may try and make that
decision for him.
Events there and in Lebanon, thanks to crippling acts of war known colloquially as 'sanctions,'
bear watching carefully as any resolution which abrogates existing debt and political alliances
will have immense downstream consequences for the region.
But between now and then we can bet on more of the same behavior from disconnected and
corrupt politicians who are so caught up in their own solipsistic fugue they won't see the end of
their political lives until the guillotines are wheeled into the capitol square.
lol. criminal NWO elite..like the mis direction of folks like
this author...has to do with criminal "conspiracy" as fewer and
fewer become so wealthy they are a new species of man. Our western
Legal system is now the weapon of the elite who are above Law.
look around the western nations, and see the result of the
corruption of our legal systems...monopoly much?
What these power-crazed
psychopaths who seized control of national governments choose to
ignore is that as far back as mankind emerged on Earth, humans
have a natural inclination to coalesce into groups of like-minded
others where they share similar cultures and lifestyles etc. That
gave birth to Nation States with borders to keep the unwanted out.
Nation States cannot now be abolished because each one has many
differences to all the others and some have been far more
successful. It's better that we share different cultures rather
than impose standardisation like automatons.
These political maniacs want to create a one-world globalised
government to impose a standard model of culture onto everybody,
with themselves controlling all the levers of power and the rest
of us relegated to mere hoi polloi.
This madness has been tried a 100 times before and has never
worked. Look at the Bolsheviks who seized control of Russia and
turned it into the USSR. It collapsed after ~70 years. As Luongo
says look at Spain/Catalonia and elsewhere. People do not want
their culture mixed and diluted into a giant one-world melting pot
and lost or destroyed.
Exactly how can low IQ poorly educated blacks in Africa
integrate into a modern Western society?
Exactly how can Moslems integrate into our societies?
The globalists are travelling down a dangerous path and it
will not end well.
Hardly themost
trustworthy of sources; either of them.
One of these is not like
the others..
,
12 minutes ago
link
Actually, I think I might be inclined more to trust a man like
George who is prepared to function as a human shield for what
he believes in over the usual unprincipled scum that we see
doing his job.
And I sure as **** now believe in the
rebranded "Pravda" as a news source, than our lamestream media,
although I actually believe more in even the new somewhat
corrupted ZH, to be a good source of accurate, tested &
verified truth..
And whilst I might be extremely rude to most of you, and
I've even been known to return bit of hatred to it's owners,
this comments section is a crucible, where an awful lot of
********, (even my own occasionally, although there isn't much
of that TBF) gets burned away from the unalloyed truth. Long
may it continue!
"The Government should create, issue, and circulate all
the currency and credits needed to satisfy the spending
power of the Government and the buying power of consumers.
By the adoption of these principles, the taxpayers will be
saved immense sums of interest. Money will cease to be
master and become the servant of humanity."
Abraham
Lincoln
When anyone tries to do that they die - Lincoln
and Kennedy.
Why is it important to take money creation away from
bankers?
"When a government is dependent upon bankers for
money, they and not the leaders of the government control
the situation, since the hand that gives is above the hand
that takes Money has no motherland; financiers are without
patriotism and without decency; their sole object is gain."
– Napoleon Bonaparte, Emperor of France, 1815
The prophecy on the neoliberal ideology emanating from
the US.
"The death of Lincoln was a disaster for Christendom.
There was no man in the United States great enough to wear
his boots and the bankers went anew to grab the riches. I
fear that foreign bankers with their craftiness and tortuous
tricks will entirely control the exuberant riches of America
and use it to systematically corrupt civilization."
Otto
von Bismark (1815-1898), German Chancellor, after the
Lincoln assassination
Impoverished economics? Unpacking the economics Nobel Prize
When the world is facing large systemic crises, why is the economics profession celebrating
small technical fixes?
By Ingrid Harvold Kvangraven
This week it was announced that Abhijit Banerjee, Esther Duflo and Michael Kremer won the
Economics Nobel Prize (or more accurately: the 'Sveriges Riksbank Prize in Economic Sciences in
Memory of Alfred Nobel'). The trio of economists were awarded the prize for "their experimental
approach to alleviating global poverty".
On social media and in mainstream newspapers, there was an exceptional level of praise for
the laureates, reflecting their existing rockstar status within development economics. The
Financial Times even claimed that the "Economics Nobel for poverty work will help restore
profession's relevance". However, the widespread calls for celebration need to be considered
with a cautionary counterweight.
The experimental approach to poverty alleviation relies on so-called Randomized Control
Trials (RCTs). Inspired by studies in medicine, the approach targets specific interventions to
a randomly selected group (schools, classes, mothers, etc), and then compares how specific
outcomes change in the recipient group versus those who did not receive the treatment. As the
groups are assumed to be otherwise similar, the difference in outcomes can be causally
attributed to the intervention.
While the laureates were first pioneering this work in the 1990s in Kenyan schools, the
approach is now widely considered the new "gold standard" in development economics, also
sometimes simply called "New Economics". The approach has become enormously influential among
governments, international agencies and NGOs. The body of work pioneered by the laureates, or
the randomistas as they are sometimes called, is meant to alleviate poverty through simple
interventions such as combating teacher absenteeism, through cash transfers, and through
stimulating positive thinking among the people living in poverty. Sound good so far?
While the laureates' approach to poverty research and policy may seem harmless, if not
laudable, there are many reasons for concern. Both heterodox and mainstream economists as well
as other social scientists have long provided thorough critique of the turn towards RCTs in
economics, on philosophical, epistemological, political and methodological grounds. The
concerns with the approach can be roughly grouped into questions of focus, theory, and
methodology.
Focus: tackling symptoms and thinking small
The approach that is being promoted is concerned with poverty, not development, and is thus
a part of the larger trend in development economics that is moving away from development as
structural transformation to development as poverty alleviation. This movement towards
"thinking small" is a part of a broader trend, which has squeezed out questions related to
global economic institutions, trade, agricultural, industrial and fiscal policy, and the role
of political dynamics, in favor of the best ways to make smaller technical interventions.
The interventions considered by the Nobel laureates tend to be removed from analyses of
power and wider social change. In fact, the Nobel committee specifically gave it to Banerjee,
Duflo and Kremer for addressing "smaller, more manageable questions," rather than big ideas.
While such small interventions might generate positive results at the micro-level, they do
little to challenge the systems that produce the problems.
For example, rather than challenging the cuts to the school systems that are forced by
austerity, the focus of the randomistas directs our attention to absenteeism of teachers, the
effects of school meals and the number of teachers in the classroom on learning. Meanwhile,
their lack of challenge to the existing economic order is perhaps also precisely one of the
secrets to media and donor appeal, and ultimately also their success.
The lack of engagement with the conditions that create poverty has led many critics to
question to what extent RCTs will actually be able to significantly reduce global poverty. A
further consequence of this impoverished economics is that it limits the types of questions we
can ask, and it leads us "to imagine too few ways to change the world".
Theory: methodological individualism lives on
In a 2017 speech, Duflo famously likened economists to plumbers. In her view the role of an
economist is to solve real world problems in specific situations. This is a dangerous
assertion, as it suggests that the "plumbing" the randomistas are doing is purely technical,
and not guided by theory or values. However, the randomistas' approach to economics is not
objective, value-neutral, nor pragmatic, but rather, rooted in a particular theoretical
framework and world view – neoclassical microeconomic theory and methodological
individualism.
The experiments' grounding has implications for how experiments are designed and the
underlying assumptions about individual and collective behavior that are made. Perhaps the most
obvious example of this is that the laureates often argue that specific aspects of poverty can
be solved by correcting cognitive biases. Unsurprisingly, there is much overlap between the
work of randomistas and the mainstream behavioral economists, including a focus on nudges that
may facilitate better choices on the part of people living in poverty.
Another example is Duflo's analysis of women empowerment. Naila Kabeer argues that it
employs an understanding of human behavior "uncritically informed by neoclassical microeconomic
theory." Since all behavior can allegedly be explained as manifestations of individual
maximizing behavior, alternative explanations are dispensed with. Because of this, Duflo fails
to understand a series of other important factors related to women's empowerment, such as the
role of sustained struggle by women's organizations for rights or the need to address unfair
distribution of unpaid work that limits women's ability to participate in the community.
Note that there is nothing embedded in RCTs that forces randomistas to assume individuals
are rational optimizing agents. These assumptions come from the economics tradition. This is
therefore not a critique of RCTs per se, but of the way RCTs are employed in the laureates'
work and in most of mainstream economics.
Method: If you didn't randomize it, is it really knowledge?
While understanding causal processes is important in development economics, as in other
social science disciplines, RCTs do so in a very limited way. The causal model underlying RCTs
focuses on causal effects rather than causal mechanisms. Not only do RCTs not tell us exactly
what mechanisms are involved when something works, they also do not tell us whether the policy
in question can be reliably implemented elsewhere. In order to make such a judgement, a broader
assessment of economic and social realities is unavoidable.
Assuming that interventions are valid across geographies and scale suggests that micro
results are independent of their macroeconomic environment. However, while "effects" on
individuals and households are not separate from the societies in which they exist, randomistas
give little acknowledgement to other ways of knowing about the world that might help us better
understand individual motivations and socio-economic situations. As it is difficult to achieve
truly random sampling in human communities, it is perhaps not surprising that when RCTs are
replicated, they may come to substantially different results than the original.
Not only do RCTs rarely have external validity, but the specific circumstances needed to
understand the extent to which the experiments may have external validity are usually
inadequately reported. This has led even critics within the mainstream to argue that there are
misunderstandings about what RCTs are capable of accomplishing. A deeper epistemological
critique involves the problematic underlying assumption that there is one specific true impact
that can be uncovered through experiments.
Recent research has found that alternative attempts to assess the success of programs
transferring assets to women in extreme poverty in West Bengal and Sindh have been far superior
to RCTs, which provide very limited explanations for the patterns of outcomes observed. The
research concludes that it is unlikely that RCTs will be able to acknowledge the central role
of human agency in project success if they confine themselves to quantitative methods
alone.
There are also serious ethical problems at stake. Among these are issues such as lying,
instrumentalizing people, the role of consent, accountability, and foreign intervention, in
addition to the choice of who gets treatment. While ethical concerns regarding potential harm
to groups is discussed extensively in the medical literature, it receives less attention in
economics, despite the many ethically dubious experimental studies (e.g. allowing bribes for
people to get their drivers' licences in India or incentivizing Hong Kong university students
into participation in an antiauthoritarian protest). Finally, the colonial dimensions of
US-based researchers intervening to estimate what is best for people in the Global South cannot
be ignored.
Why it matters: limits to knowledge and policy-making
There will always be research that is more or less relevant for development, so why does it
matter what the randomistas do? Well, as the Nobel Committee stated, their "experimental
research methods now entirely dominate development economics". A serious epistemological
problem arises when the definition of what rigour and evidence means gets narrowed down to one
single approach that has so many limitations. This shift has taken place over the past couple
of decades in development economics, and is now strengthened by the 2019 Nobel Prize. As both
Banerjee and Duflo acknowledged in interviews after the prize was announced, this is not just a
prize for them, but a prize for the entire movement.
The discipline has not always been this way. The history of thought on development economics
is rich with debates about how capital accumulation differs across space, the role of
institutions in shaping behavior and economic development, the legacies of colonialism and
imperialism, unequal exchange, the global governance of technology, the role of fiscal policy,
and the relationship between agriculture and industry. The larger questions have since been
pushed out of the discipline, in favor of debates about smaller interventions.
The rise of the randomistas also matters because the randomistas are committed to provoke
results, not just provide an understanding of the situations in which people living in poverty
find themselves. In fact, it is one of their stated goals to produce a "better integration
between theory and empirical practice". A key argument by the randomistas is that "all too
often development policy is based on fads, and randomised evaluations could allow it to be
based on evidence".
However, the narrowness of the randomized trials is impractical for most forms of policies.
While RCTs tend to test at most a couple of variations of a policy, in the real world of
development, interventions are overlapping and synergistic. This reality recently led 15
leading economists to call to "evaluate whole public policies" rather than assess "short-term
impacts of micro-projects," given that what is needed is systems-level thinking to tackle the
scale of overlapping crises. Furthermore, the value of experimentation in policy-making, rather
than promoting pre-prescribed policies, should not be neglected.
The concept of "evidence-based policy" associated with the randomistas needs some unpacking.
It is important to note that policies are informed by reflections on values and objectives,
which economists are not necessarily well-suited to intervene in. Of course, evidence should be
a part of a policy-making process, but the pursuit of ineffective policies is often driven by
political priorities rather than lack of evidence.
While randomistas might respond to this by arguing that their trials are precisely meant to
de-politicize public policy, this is not necessarily a desirable step. Policy decisions are
political in nature, and shielding these value judgements from public scrutiny and debate does
little to strengthen democratic decision making. Suggesting that policy-making can be
depoliticized is dangerous and it belittles the agency and participation of people in
policy-making. After all, why should a policy that has been proven effective through an RCT
carry more weight than, for example, policies driven by people's demands and political and
social mobilisation?
While the Nobel Prize does leave those of us concerned with broader political economy
challenges in the world anxious, not everything is doom and gloom. Firstly, the Nobel directs
attention to the persistence of poverty in the world and the need to do something about it.
What we as critical development economists now need to do is to challenge the fact that the
Prize also legitimizes a prescriptive view of how to find solutions to global problems.
Secondly, the fact that a woman and a person of color were awarded a prize that is usually
reserved for white men is a step forward for a more open and inclusive field. Duflo herself
recognizes that the gender imbalance among Nobel Prize winners reflects a "structural" problem
in the economics profession and that her profession lacks ethnic diversity.
However, it is obvious that to challenge racism, sexism and Eurocentrism in economics, it is
not enough to simply be more inclusive of women and people of color that are firmly placed at
the top of the narrow, Eurocentric mainstream. To truly achieve a more open and democratic
science it is necessary to push for a field that is welcoming of a plurality of viewpoints,
methodologies, theoretical frameworks, forms of knowledge, and perspectives.
This is a massive challenge, but the systemic, global crises we face require broad,
interdisciplinary engagement in debates about possible solutions.
Ingrid Harvold Kvangraven is a Lecturer in International Development at the University of York.
Reply Saturday, October 26, 2019 at 11:52 AM Paine said in reply
to anne... Development v poverty amelioration
A Very basic goal conflict indeed.
Transformation
will never come
thru,
More effective off sets
to
Institutionally produced
misery powerlesses,
helplessness
The poverty of poor economics The winners of the Nobel Prize in Economics experiment on the poor, but their research doesn't
solve poverty. By Grieve Chelwa and Seán Muller
Monday, the Swedish Academy of Sciences awarded the "Nobel Prize" in economics to Abhijit
Banerjee, Esther Duflo and Michael Kremer for "their experimental approach to alleviating
global poverty."
...
Banerjee and Duflo teach at MIT while Kremer is at Harvard. The trio have been at the
forefront of pushing the use of randomized control trials (RCTs) in the sub-discipline of
economics known as development economics.... The main idea behind their work is that RCTs allow
us to know what works and doesn't work in development because of its "experimental" approach.
RCTs are most well-known for their use in medicine and involve the random assignment of
interventions into "treatment" and "control" groups. And just like in medicine, so the argument
goes, RCTs allow us to know which development pill to swallow because of the rigor associated
with the experimental approach. Banerjee and Duflo popularized their work in a 2011 book "Poor
Economics: A Radical Rethinking of the Way to Fight Global Poverty."
Even though other Nobel prize awards often attract public controversy (peace and literature
come to mind), the economics prize has largely flown under the radar with prize announcements
often met with the same shrugging of the shoulders as, for example, the chemistry prize. This
year has however been different (and so was the year that Milton Friedman, that high priest of
neoliberalism, won).
A broad section of commentary, particularly from the Global South, has puzzled over the
Committee's decision to not only reward an approach that many consider as suffering from
serious ethical and methodological problems, but also extol its virtues and supposed benefits
for poor people.
Many of the trio's RCTs have been performed on black and brown people in poor parts of the
world. And here, serious ethical and moral questions have been raised particularly about the
types of experiments that the randomistas, as they are colloquially known, have been allowed to
perform. In one study in western Kenya, which is one-half of the epicenter of this kind of
experimentation, randomistas deliberately gave some villages more money and others less money
to check if villages receiving less would become envious of those receiving more. The study's
authors, without any sense of shame, titled their paper "Is Your Gain My Pain?" In another
study in India, the other half of the epicenter, researchers installed intrusive cameras in
class rooms to police teacher attendance (this study was actually favorably mentioned by the
Swedish Academy). There are some superficial rationalizations for this sort of thing, but
studies of this kind -- and there are many -- would never have seen the light of day had the
experimental subjects been rich Westerners.
There are also concerns around the extractive nature of the RCT enterprise. To execute these
interventions, randomistas rely on massive teams of local assistants (local academics,
students, community workers, etcetera) who often make non-trivial contributions to the
projects. Similarly, those to be studied (the poor villagers) lend their incalculable emotional
labor to these projects (it is often unclear whether they have been adequately consulted or if
the randomistas have simply struck deals with local officials). The villagers are the ones that
have to deal with all the community-level disruptions that the randomistas introduce and then
leave behind once they've gone back to their cushy lives in the US and Europe.
And while there is an increasing amount of posturing to compensate for this exploitation,
with some researchers gushing about how they and their "native assistants" are bosom buddies,
the payoffs of the projects (lucrative career advancement, fame, speaking gigs, etcetera) only
ever accrue to the randomistas and randomistas alone. The extreme case is obviously this week's
award.
Beyond the ethics of the Nobel winners, their disciples, and the institutions they have
created in their image are two serious methodological problems that fundamentally undermine
their findings.
The first is that the vast majority of studies conducted using these methods (our rough
guess is more than 90%) have no formal basis for generalization. In other words, there is no
basis to believe that the findings of these studies can be applied beyond the narrow confines
of the population on which the experiments are undertaken. This is simply fatal for policy
purposes.
The prize giving committee addresses this only in passing by saying that "the laureates have
also been at the forefront of research on the issue of [whether experimental results apply in
other contexts]." This is misleading at best and false at worst. There are some advocates of
randomised trials who have done important research on the problem, but the majority of key
contributions are not by advocates of randomised trials and the three awardees have been
marginal contributors. The more important point is simply that if the problem of whether
experimental results are relevant outside the experiment has not been resolved, how can it be
claimed that the trio's work is "reducing world poverty?"
The second contradiction is more widely understood: despite the gushing headlines in the
Western press, there is simply no evidence that policy based on randomized trials is better
than alternatives. Countries that are now developed did not need foreign researchers running
experiments on local poor people to grow their economies. There is ample historical evidence
that growth, development and dramatic reductions in poverty can be achieved without randomised
trials. Randomistas claim that their methods are the holy grail of development yet they have
not presented any serious arguments to show why theirs is the appropriate response. Instead,
the case that such methods are crucial for policy is largely taken for granted by them because
they think they are doing "science." But while they are certainly imitating what researchers in
various scientific disciplines do, the claim that the results are as reliable and useful for
economic and social questions is unsupported. It is instead a matter of blind faith -- as with
the conviction many such individuals appear to have of a calling to save the poor, usually
black and brown, masses of the world.
We do not have a view on whether these individuals ought to have been awarded the prize --
prizes are usually somewhat dubious in their arbitrariness and historical contingency. But the
claims made about the usefulness and credibility of the methods employed are concerning, both
because they are unfounded and because they inform a missionary complex that we believe is more
of a threat to the progress of developing countries than it is an aid.
Grieve Chelwa teaches economics at the University of Cape Town. Seán Muller teaches
economics at the University of Johannesburg.
How curious that China starting from being among the poorest of countries, far poorer
than India in 1980, and having a population that is now 1.4 billion could have raised hundreds
of millions to middle class well-being, could have raised hundreds of millions from poverty and
coming ever closer to ending severe poverty in 2020, would have no economist worth a Nobel
prize for work on poverty. To me, this is a travesty of awarding the Nobel Prize for work on
poverty to 3 Massachusetts economists.
Distressing that the astonishing and wonderful progress China has made against poverty
should be given no attention and credit by the Nobel Prize folks or by the articles about the
prize that I have so far read. This tells me that the Massachusetts work on poverty and
evaluation of the work is highly problematic, which I already knew from reading the work.
Oh No! Interest on the Debt Is Half As Large as the 1990s Peak!
By Dean Baker
The Washington Post had a piece * on newly released data on the federal budget deficit.
The piece included the obligatory comments from the always wrong budget "experts" at the
Committee for a Responsible Federal Budget. It also warned readers:
"U.S. debt is considered one of the safest investments in the world and interest rates
remain low, which is why the government has been able to borrow money at cheap rates to
finance the large annual deficits. But the costs are adding up. The government spent about
$380 billion in interest payments on its debt last year, almost as much as the entire federal
government contribution to Medicaid."
"Almost as much as the entire federal government contribution to Medicaid!" Think about
that. Try also thinking about the fact that interest payments were around 1.7 percent of GDP
last year (before deducting money refunded from the Federal Reserve). That compares to a peak
of 3.2 percent of GDP in 1991. Are you scared yet?
It's also not quite right to claim that interest rates in the United States are especially
low, at least not compared to other rich countries. The U.S. pays an interest rate on 10-year
government bonds that is more two full percentage points higher than the interest rate paid
by Germany and the Netherlands. It's even higher than the interest rate paid by Greece.
"... The brother of the current Chilean president, scions of one of the richest families in Chile, became famous for introducing, as Minister of Labor and Social Security under Pinochet, a funded system of pensions where employees make compulsory contributions from their wages into one of several pension funds, and after retirement receive pensions based on investment performance of such funds. Old-age pensions thus became a part of roulette capitalism. But In the process, the pension funds, charging often exorbitant fees, and their managers became rich. ..."
"... José Piñera had tried to "sell" this model to Yeltsin's Russia and to George Bush's United States, but, despite the strong (and quite understandable) support of the financial communities in both countries, he failed. Nowadays, most Chilean pensioners receive $200-$300 per month in a country whose price level (according to International Comparison Project, a worldwide UN- and World Bank-led project to compare price levels around the world) is about 80% of that of the United States. ..."
"... the combined wealth of Chilean billionaires' (there were twelve of them) was equal to 25% of Chilean GDP. The next Latin American countries with highest wealth concentrations are Mexico and Peru where the wealth share of billionaires is about half (13 percent of GDP) of Chile's. But even better: Chile is the country where billionaires' share, in terms of GDP, is the highest in the world (if we exclude countries like Lebanon and Cyprus) where many foreign billionaires simply "park" their wealth for tax reasons. The wealth of Chile's billionaires, compared to their country's GDP, exceeds even that of Russians. [Graph] ..."
"... Such extraordinary inequality of wealth and income, combined with full marketization of many social services (water, electricity etc.), and pensions that depend on the vagaries of the stock market has long been "hidden" from foreign observers by Chile's success in raising its GDP per capita. ..."
"... if there Is no social justice and minimum of social cohesion, the effects of growth will dissolve in grief, demonstrations, and yes, in the shooting of people. ..."
Chile: The poster boy of neoliberalism who fell from grace
It is not common for an Organisation for Economic Co-operation and Development county to
shoot and kill 16 people in two days of socially motivated riots. (Perhaps only Turkey, in
its unending wars against the Kurdish guerrilla, comes close to that level of violence.) This
is however what Chilean government, the poster child of neoliberalism and transition to
democracy, did last week in the beginning of protests that do not show the signs of subsiding
despite cosmetic reforms proposed by President Sebastian Piñera.
The fall from grace of Chile is symptomatic of worldwide trends that reveal the damages
causes by neoliberal policies over the past thirty years, from privatizations in Eastern
Europe and Russia to the global financial crisis to the Euro-related austerity. Chile was
held, not the least thanks to favorable press that it enjoyed, as a exemplar of success.
Harsh policies introduced after the overthrow of Salvador Allende in 1973, and the murderous
spree that ensued afterwards, have been softened by the transition to democracy but their
essential features were preserved. Chile indeed had a remarkably good record of growth, and
while in the 1960-70s it was in the middle of the Latin American league by GDP per capita, it
is now the richest Latin American country. It was of course helped too by high prices for its
main export commodity, copper, but the success in growth is incontestable. Chile was
"rewarded" by the membership in the OECD, a club of the rich nations, the first South
American country to accede to it.
Where the country failed is in its social policies which somewhat bizarrely were
considered by many to have been successful too. In the 1980s-90s, the World Bank hailed
Chilean "flexible" labor policies which consisted of breaking up the unions and imposing a
model of branch-level negotiations between employers and workers rather than allowing an
overall umbrella union organization to negotiate for all workers. It was even more bizarrely
used by the World Bank as a model of transparency and good governance, something that the
transition countries in Eastern Europe should have presumably copied from Chile. The
brother of the current Chilean president, scions of one of the richest families in Chile,
became famous for introducing, as Minister of Labor and Social Security under Pinochet, a
funded system of pensions where employees make compulsory contributions from their wages into
one of several pension funds, and after retirement receive pensions based on investment
performance of such funds. Old-age pensions thus became a part of roulette capitalism. But In
the process, the pension funds, charging often exorbitant fees, and their managers became
rich.
José Piñera had tried to "sell" this model to Yeltsin's Russia and to
George Bush's United States, but, despite the strong (and quite understandable) support of
the financial communities in both countries, he failed. Nowadays, most Chilean pensioners
receive $200-$300 per month in a country whose price level (according to International
Comparison Project, a worldwide UN- and World Bank-led project to compare price levels around
the world) is about 80% of that of the United States.
While Chile leads Latin America in GDP per capita, it also leads it terms of inequality.
In 2015, its level of income inequality was higher than in any other Latin American country
except for Colombia and Honduras. It exceeded even Brazil's proverbially high inequality. The
bottom 5% of the Chilean population have an income level that is about the same as that of
the bottom 5% in Mongolia. The top 2% enjoy the income level equivalent to that of the top 2%
in Germany. Dortmund and poor suburbs of Ulan Bataar were thus brought together.
Chilean income distribution is extremely unequal. But even more so is its wealth
distribution. There, Chile is an outlier even compared to the rest of Latin America.
According to the Forbes' 2014 data on world billionaires, the combined wealth of Chilean
billionaires' (there were twelve of them) was equal to 25% of Chilean GDP. The next Latin
American countries with highest wealth concentrations are Mexico and Peru where the wealth
share of billionaires is about half (13 percent of GDP) of Chile's. But even better: Chile is
the country where billionaires' share, in terms of GDP, is the highest in the world (if we
exclude countries like Lebanon and Cyprus) where many foreign billionaires simply "park"
their wealth for tax reasons. The wealth of Chile's billionaires, compared to their country's
GDP, exceeds even that of Russians.
[Graph]
Such extraordinary inequality of wealth and income, combined with full marketization of
many social services (water, electricity etc.), and pensions that depend on the vagaries of
the stock market has long been "hidden" from foreign observers by Chile's success in raising
its GDP per capita.
But the recent protests show that the latter is not enough. Growth is
indispensable for economic success and reduction in poverty. But it is not enough: if there
Is no social justice and minimum of social cohesion, the effects of growth will dissolve in
grief, demonstrations, and yes, in the shooting of people.
A Portuguese populist party called Chega! -- Enough! -- has secured a seat in Parliament,
after winning more than 65,000 votes in legislative elections held on October 6.
It is the
first time that an anti-establishment party has entered Parliament since Portugal became a
democracy in 1974.
Chega leader André Ventura, a 36-year-old law professor and television sports personality,
campaigned on a theme of law and order and opposition to both political correctness and the
imposition of cultural Marxism.
He rode a wave of discontent with traditional center-right
parties, which in recent years have drifted to the left on domestic and foreign policy issues.
The Socialist Party
won
the election with
36.3% of the vote, far short of an outright majority. The center-right Social Democrats
won
27.8%,
the party's worst result since 1983. Chega, which was founded in March 2019,
won
2%
of the vote in Lisbon and 1.3% of the vote nationwide.
Political observers agreed that Chega's result was impressive for a party that is only
seven months old, and that Ventura's entry into Parliament would give Chega greater prominence and
media visibility, in addition to financial support.
Ventura, who has
said
that
the traditional parties "no longer respond to the people's problems" and that he
represents
"disillusioned
Portuguese," has called for lowering taxes, strengthening borders and increasing penalties for
serious crimes. He has called for a reducing by half the number of Members of Parliament,
introducing term limits and implementing measures aimed at increasing transparency and reducing
corruption.
Ventura has also called for a public referendum on reforming the Constitution in order to
replace the existing parliamentary system with a presidential system that better guarantees the
separation of powers.
The existing political system, he said, was created by Marxists and
fascists after the 1974 revolution in order to share the spoils after four decades of dictatorship.
Indeed, the Portuguese Constitution
calls
for
opening up "a path towards a socialist society."
In the area of foreign policy, Ventura has called for opposing European federalism,
safeguarding national sovereignty from encroaching globalism and taking Portugal out of the UN's
Global Compact for Migration. He has called for reinforcing Portugal's role in NATO, and for
fighting against the "hegemonic temptations" of China, Iran and the European Union. He has also
called for an "unequivocal commitment" to support the State of Israel and for transferring the
Portuguese embassy to Jerusalem.
Portugal's establishment media and left-wing parties have sought to discredit Chega by
branding the party as "far right," "extremist," and "populist right wing."
A review of
Chega's "
70
Measures to Rebuild Portugal
" shows it to be a conservative party promoting classical liberal
economic policies and traditional social values. These policies include:
Promote the teaching of Portuguese history and culture.
Overturn the Parity Law (
Lei da Paridade
) [Promulgated in March 2019, the law
states
that
candidate lists for Parliament must have a minimum representation of 40% of each sex] and other
positive discrimination quota policies in favor of merit-based policies.
Increase tax benefits for large families and introduce measures to increase the birth rate.
Portugal has a
birth
rate
of 1.3 children per woman, the second-lowest in Europe, after Cyprus, with one child
per woman.
Ensure that parents have control over the moral education of their children by requiring
schools to obtain express authorization from parents or guardians for any activity involving
ethical, social, civic, moral or sexual values for students up to secondary education.
Reform national adoption laws so that women with unexpected or unwanted pregnancies have
information, assistance and alternatives to abortion.
Change the Penal Code to require chemical castration for anyone convicted of sexual crimes
against children under 16 years of age.
Introduce mandatory prison sentences with no possibility of a suspended sentence for crimes
involving rape.
Introduce life imprisonment for the most serious crimes, namely crimes of homicide or
terrorism. Portugal abolished life imprisonment in 1884 and many criminals are released from
prison after serving short or partial sentences.
Publish nationality and origin data in crime statistics.
Reduce public spending, in particular by reducing the number of Members of Parliament to
100, down from 230, and by eliminating the perks of high office.
Reduce the role of the state in the economy. Abolish inheritance taxes. Eliminate or reduce
tariffs on electricity, gas and water.
Eliminate access to free health care for illegal immigrants.
Immediately inform the United Nations of Portugal's departure from the Global Compact for
Migration. The issue of immigration should be dealt with in accordance with the reality and the
sovereignty of each country.
Promote a new European treaty, in line with the Visegrad Group of countries, on borders,
national sovereignty and respect for the values of European culture.
Deport all illegal immigrants to their countries of origin. Deport all immigrants who, even
if they have a legal status, commit crimes that lead to the sentence of imprisonment.
Any illegal immigrants within the country will be excluded from the possibility of
regularizing their situation and receiving any state support.
For those seeking Portuguese nationality, increase the requirements in spoken and written
Portuguese, as well as cultural integration.
Loss of nationality for citizens of foreign origin who commit acts of terrorism or attacks
on Portugal's sovereignty, security and independence.
Combat political and religious practices which violate the Portuguese legal system
(especially anti-Semitism, gender ideologies, the application of Sharia law, female genital
mutilation, forced marriages of minors, among others).
Reassess Portugal's role in the United Nations, "which has become a producer and spreader of
cultural Marxism and mass globalism that we are unwilling to consume, much less pay for."
"CHEGA is a Conservative party that advocates a view of the world and of life based on the
values of freedom and representative democracy, the rule of law, a limited state and the
separation of powers.
"CHEGA fits into a current of thought that, based on an uncompromising defense of the dignity
of the individual (who, as a human being, has the right to life, liberty and the pursuit of
happiness), encourages the harmony of interests and rules of voluntary cooperation. All this in
a society historically built over centuries, with its own cultural identity defined by a certain
set of values, customs and traditions.
"This line of thought is also affiliated with respect for democracy, freedom, private
property and the rule of law, against arbitrariness, the use and abuse of power...that is,
against all forms of totalitarianism and 'soft tyrannies' that Alexis de Tocqueville so well
characterized. This line of thought therefore argues for a liberal, democratic and pluralistic
conservatism, committed to defending spontaneous order and promoting organic, orderly and
peaceful progress in the primacy of unconditional political, economic and civic freedoms.
"For the avoidance of doubt, our political theory and practice is based on the reflections of
authors such as Adam Smith and their 'Spontaneous Order'; Montesquieu and his 'Separation of
Powers'; John Locke and his 'Natural Rights'; Edmund Burke and Roger Scruton and their
reflections on the interconnection between 'Freedom, Free Markets, Tradition and Authority'; or
Ludwig von Mises with his Treaty on 'Human Action' or Friedrich von Hayek and his 'Law,
Legislation and Freedom.'
A section titled "Globalization and European Federalism"
reads
:
"We defend a Euro-integration against a Euro-dilution, as we defend a globalized but not
globalist world, against a massified and yes globalist world. Because globalization is a global
interaction of different people, families, nations and civilizations; globalism is the attempt
to destroy all differences by obtaining, as a result, an amorphous mass of peers who do not
interact but absorb the dictates, censorship, and slavery imposed by a Big Brother, a
sophisticated name for a mere foreman of global slaves who are powerless because they are
castrated....
"European integration is not, and cannot be, a dilution of all European nations, and all
their citizens, in a watery and indistinct solution of standardized and all equal Europeans.
"It is in the name of respect for the difference of men and peoples, and the identity of
Europe, that we reject this Euro-dilution. True integration could lead Europe to reverse the
path of its decay. But a dilution of all in all can only accelerate and make irreversible that
same path.
"The concept of a globalized world presupposes, in our view, a world of different men,
interacting, not a world of massed men, all poor in hopeless equality, unable to make an
original and innovative contribution. A globalized world is life. A globalist world is death.
"If globalization is understood as a global method of the leveling and progressive
de-differentiation of men, nations and cultures, the modern Right is against globalization. But
if it represents a greater and more creative interaction between men and different cultures,
each with its own unique and unrepeatable contribution, the modern Right is in favor of this
globalization. Thus, it is important to distinguish two different concepts by using two
different terms to describe them. We will call globalization the global interaction between the
different, and globalism the global interaction between massified men because they are
artificially equal to each other.
"Men, cultures and nations cannot be enclosed in themselves, and this is a fact that cannot
be doubted; but men, cultures and nations must open themselves to the world in their
unrepeatability and their difference, not accepting that they fade into a global and
undifferentiated melting pot.
"Respect for difference is an essential condition for the exercise of freedom. And Freedom is
the basic condition of humanity. There can be no political action that does not respect freedom,
because it would be a political action against the essence of man who is, for the modern Right,
the alpha and omega of all political action.
"This is why we place respect for difference as the cornerstone of the political building we
intend to build. Because without respect for difference there is no freedom, and without freedom
man loses his basic humanity, that is, his prime reason for existing."
A petition is now circulating to ask the Constitutional Court to ban Chega.
Ventura
responded
:
"It strikes me as very curious that in a democracy that has just elected a party with
legitimate votes of the people, counted in a ballot box, there are groups calling for its
unconstitutionality. This is to say that almost 70,000 Portuguese people are silly or have
turned their backs to the Constitution."
Livre, an eco-socialist feminist party, said that Chega has no place in Parliament,
known as the Assembly of the Republic (AR). Ventura
replied
:
"Fortunately, it is not Livre that decides who goes to Parliament or not, it is the
Portuguese people. The Portuguese people understood that they should give us this confidence and
this mandate, and we will fulfill it. Labels worry us very little. We consider ourselves
essentially an anti-system party and what Livre should ponder is why Chega won more votes than
Livre, when Livre is six or seven years old and Chega is four months old. Livre should give some
thought to why this happened. In fact, I think all parties should ask themselves how a
four-month party elects a deputy to the AR."
Much of the criticism of Ventura dates back to 2017, while he was campaigning for mayor of
Loures, a municipality south of Lisbon. At the time he made the politically incorrect
observation
that
local gypsies, also known as Roma, "live almost exclusively from state subsidies" and that some
Roma think that they are "above the rule of law."
"I think there is a problem of 'subsidiarity,' [a
principle
that
problems, including social problems, should be resolved at the local level] there is a problem
of non-integration into the rule of law, some disrespect for the rule of law. We are going to
propose are two things: First, that there is a national census to know where, who and how many
Gypsies we have in Portugal, because right now nobody knows. If there is a problem with the
community, we need to know where they are, who they are, what problems they have. And in
Portugal you cannot even talk about it. The second aspect is effective control over the rule of
law for the Roma community. For example, do child marriages still exist with girls aged 12 and
13? Are women still prevented from going to school? To do this one must act and not look the
other way. We will do this in relation to the Roma community as we will do the same about female
genital mutilation in relation to African communities that exist in Portugal, and as we will do
to a number of others."
When a journalist noted that
only
50% of the Roma in Portugal live on welfare, Ventura
responded
:
"The studies we had available showed that only 15% of the Roma population lives on income
from their work. I know people say I'm obsessed with this, but I think if we don't solve this
problem of Roma integration we will have very serious consequences. We had a judge who said this
year that it was okay for Gypsy children to leave school because it was their tradition. There
is a 14-year-old girl, for example, who is not entitled to her normal rights according to the
rule of law because it is understood that there must be special protection here.
This special protection we give to the Gypsy community is precisely why we cannot solve the
problem. We always say they are poor things, they can't find work, that nobody wants to
integrate them and then we think we have to protect them. I think we have to take this problem
seriously, because it exists. The Roma community has a problem of integration. Most of this
community does not want to integrate, but they have to integrate into the rule of law, otherwise
it makes no sense to call this the rule of law.
"I understand there are different traditions, but we can't have marriages at 13 years of age.
We can't have children out of school at 13 years of age. We must demand responsibility from
those communities to which we give most as a state. We who pay taxes feel that we have a
responsibility to others. But is there no duty from others to us? In Loures I found situations
of brutal debt in social housing. This debt corresponds to 12 million euros. This means that
there are people who have never paid a euro for their assigned home. If we do not demand they
pay, just because they are Gypsies, Afro descendants or poor minorities, we are contributing to
the worst: breeding ghettos. We have to demand responsibility from them. These people have to
collaborate. Today my feeling is that the Roma do not collaborate or want to collaborate and
prefer to be outside the rule of law. I think Roma leaders need to be called to accountability
and to promote integration."
Portugal's establishment media have been apoplectic about the rise of Chega. In an article
titled, "Far Right Comes to Parliament," the newspaper
Público
opined
:
"The far right comes to Parliament by the hand of André Ventura, who has moved into the
limelight after accusing the Gypsy community of living on subsidies.
"In Chega he was able to gather party militants who came essentially from traditional right
parties, who had turned to a party that claims to be 'conservative in customs, liberal in
economics, national in identity and personalist.'
In an essay titled,
"We really have a problem,"
commentator Paulo Baldaia
warned
:
"There is reason to be concerned about the arrival of Chega, a one-man extremist party that
does not hesitate to exploit the fears of the weak to electoral success.
"If, at a time of low unemployment and economic growth, André Ventura was elected, one can
imagine the growth potential of this party, which is openly intolerant of racial and ethnic
minorities, if the unemployment rate is once again close to 18% (38% among young people), as it
was in 2012/2013."
In an opinion article titled, "The Snake's Egg," Paula Ferreira, the Deputy Executive Editor of
Jornal
de Notícias
,
wrote
:
"Portugal is no longer an oasis in Europe. Here too, against the expectations of the most
optimistic, the far right has appeared. Just like there, the discourse against immigrants and
the non-acceptance of difference conquers the way. In line with the Visegrad group, made up of
Poland, Hungary, Slovakia and the Czech Republic, Chega is committed to combating immigration.
For the new party with a parliamentary seat, the UN 'is a spreader of Marxist ideas,' for which
Ventura is unwilling to pay. This strategy cannot be ignored."
Ventura has
called
on
Portuguese citizens and media commentators to remain calm: "Chega is a democratic party. There is
no reason for unusual alarm or attacks. Chega is not here to undermine democracy." In a tweet,
Ventura
added
:
"They have to get used to Chega and our way of doing politics. We do not want ministries,
secretariats of state or senior posts. We want to be the voice of discontent for an entire
people. That is why we are going to Parliament!"
On the previous thread, the danger of civil society's demise became a brief topic.
Sanders attempted to link the injustice system to the crisis within civil society, and IMO,
he was 100% correct in trying to do so. Believe me, you don't want to get caught up in its web.
But if you do, you'll soon learn just how despicable the system is and see how it links to the
epidemic of political corruption. The domestic social malaise within the Outlaw US Empire is
holistic in its nature, but Sanders is the only politico that's bringing that fact out into the
light-of-day.
"Behold the aggrieved, reactive creature fashioned by neoliberal reason and its effects, who
embraces freedom without the social contract, authority without democratic legitimacy, and
vengeance without values or futurity. Far from the calculating, entrepreneurial, moral, and
disciplined being imagined by Hayek and his intellectual kin, this one is angry, amoral, and
impetuous, spurred by unavowed humiliation and thirst for revenge.
The intensity of this energy is tremendous on its own, and also easily exploited by
plutocrats, rightwing politicians, and tabloid media moguls whipping it up and keeping it
stupid. It does not need to be addressed by policy producing its concrete betterment because it
seeks mainly psychic anointment of its wounds. For this same reason it cannot be easily
pacified -- it is fueled mainly by rancor and unavowed nihilistic despair. It cannot be
appealed to by reason, facts, or sustained argument because it does not want to know, and it is
unmotivated by consistency or depth in its values or by belief in truth.
Its conscience is weak while its own sense of victimization and persecution runs high. It
cannot be wooed by a viable alternative future, where it sees no place for itself, no prospect
for restoring its lost supremacy. The freedom it champions has gained credence as the needs,
urges, and values of the private have become legitimate forms of public life and public
expression.
Having nothing to lose, its nihilism does not simply negate but is festive and even
apocalyptic, willing to take Britain over a cliff, deny climate change, support manifestly
undemocratic powers, or put an unstable know-nothing in the most powerful position on earth,
because it has nothing else. It probably cannot be reached or transformed yet also has no
endgame.
But what to do with it? And might we also need to examine the ways these logics and energies
organize aspects of left responses to contemporary predicaments?"
In the meantime, this post on Chile will hopefully fill in some of the gaps as well as
encourage readers who have insight to provide additional comments and highlight any points that
seem inaccurate or incomplete.
It's also worth noting that Pinochet's Chicago School experiment ran quickly into the ditch.
From ECONNED:
Chile has been widely, and falsely, cited as a successful "free markets" experiment. Even
though Chilean dictator Augusto Pinochet's aggressive implementation of reforms that were
devised by followers of the Chicago School of Economics led to speculation and looting
followed by a bust, it was touted in the United States as a triumph. Friedman claimed in 1982
that Pinochet "has supported a fully free-market economy as a matter of principle. Chile is
an economic miracle." The State Department deemed Chile to be "a casebook study in sound
economic management."
Those assertions do not stand up to the most cursory examination. Even the temporary gains
scored by Chile relied on heavy-handed government intervention .
The "Chicago boys," a group of thirty Chileans who had become followers of Friedman as
students at the University of Chicago, assumed control of most economic policy roles. In
1975, the finance minister announced the new program: opening of trade, deregulation,
privatization, and deep cuts in public spending.
The economy initially appeared to respond well to these changes as foreign money flowed in
and inflation fell. But this seeming prosperity was largely a speculative bubble and an
export boom. The newly liberalized economy went heavily into debt, with the funds going
mainly to real estate, business acquisitions, and consumer spending rather than productive
investment. Some state assets were sold at huge discounts to insiders. For instance,
industrial combines, or grupos, acquired banks at a 40% discount to book value, and then used
them to provide loans to the grupos to buy up manufacturers.
In 1979, when the government set a currency peg too high, it set the stage for what Nobel
Prize winner George Akerlof and Stanford's Paul Romer call "looting" (we discuss this
syndrome in chapter 7). Entrepreneurs, rather than taking risk in the normal fashion, by
gambling on success, instead engage in bankruptcy fraud. They borrow against their companies
and find ways to siphon funds to themselves and affiliates, either by overpaying themselves,
extracting too much in dividends, or moving funds to related parties.
The bubble worsened as banks gave low-interest-rate foreign currency loans, knowing full
when the peso fell. But it permitted them to use the proceeds to seize more assets at
preferential prices, thanks to artificially cheap borrowing and the eventual subsidy of
default.
And the export boom, the other engine of growth, was, contrary to stateside propaganda,
not the result of "free market" reforms either. The Pinochet regime did not reverse the
Allende land reforms and return farms to their former owners. Instead, it practiced what
amounted to industrial policy and gave the farms to middle-class entrepreneurs, who built
fruit and wine businesses that became successful exporters. The other major export was
copper, which remained in government hands.
And even in this growth period, the gains were concentrated among the wealthy.
Unemployment rose to 16% and the distribution of income became more regressive. The Catholic
Church's soup kitchens became a vital stopgap.
The bust came in late 1981. Banks, on the verge of collapse thanks to dodgy loans, cut
lending. GDP contracted sharply in 1982 and 1983. Manufacturing output fell by 28% and
unemployment rose to 20%. The neoliberal regime suddenly resorted to Keynesian backpedaling
to quell violent protests. The state seized a majority of the banks and implemented tougher
banking laws. Pinochet restored the minimum wage, the rights of unions to bargain, and
launched a program to create 500,000 jobs.
Only a week after the huge mobilizations in Ecuador that successfully
toppled the controversial 'paquetazo', the financial plan imposed on the South American nation
by the International Monetary Fund, another Latin American country has risen up against the
economic policies of its government.
In a country where the minimum wage of 70% of the population barely reaches $700 USD per
month, the news from Chilean president Piñera last week that the fare for a metro ticket
in Santiago would rise from 800 Chilean Pesos to 830 ($1.15 USD) hit hard. Chile, a nation with
a long history of neoliberalism, has been unable to eradicate poverty with privatisation
policies, and it is estimated that around 36% of the urban population live in extreme
poverty.
The supposed "economic miracle" of Chile, which received its name from American economist
Milton Friedman, was a set of liberalising economic measures put in place during the
dictatorship of Pinochet, that imposed a free market in the country with the support from the
United States. This economic system, that continues to be implemented today in Chile, has
benefitted the economic elites whilst creating inequality and suffering for the majority. It's
hardly surprising that thanks to these neoliberal reforms promoted by Friedman, the 90s became
the lost decade of Latin America.
Tired of the economic policies of the government, students and citizens took to the streets
of Chile to protest against the rise in price of the metro ticket, but in reality this was just
the tip of the iceberg. They are in fact protesting against many other social issues such as
high tariffs for electricity and gas, low pensions, and a completely unaffordable health and
education system. Protesters burnt metro stations and public busses, and they looted
supermarkets and public buildings.
When Piñera spoke to the nation on Saturday evening to declare the suspension of the
increase in metro fare, it was already too late to contain the fury that had been unleashed.
Students and young people kept marching and demanding justice, whilst the government declared a
State of Emergency and sent the army to the streets.
That's why we explain to you everything you need to know about the current protests in Chile
and why this explosion of violence is so important in the region.
Police Violence and Democracy in Chile
It's not the first time that police use violence against their own citizens in Chile, a
country which has a long history of repression of the mapuche indigenous communities when they
rise up against the lack of government recognition of their territorial rights.
In fact, police violence against mapuche communities resulted in the murder of community
leader of only 24 years of age, Camilo Catrillanca, last year when he was passing through an
area in which a police operation was being carried out and suddenly found himself in the middle
of a shoot out. A stray bullet hit him in the head and murdered him instantly.
The protests that began in Santiago but that have now extended themselves across the
country, have so far caused around 11 deaths, mostly due to violence at the hands of the police
and the Chilean army. This display of state violence against citizens comes only 30 years after
the dictatorship of Pinochet murdered and disappeared over 40,000 Chileans during its reign of
terror. What's more, according to the National Institute for Human Rights in Chile, there have
been 84 firearm casualties and over 1420 people detained since the protests began last
week.
The reaction from Piñera has focussed on only the violent acts of the protesters,
contributing to the criminalisation of the right to protest in the country. "We have invoked
the Law of State Security, not against citizens, but against a handful of delinquents that have
destroyed property and dreams with violence and wickedness".
He justified police repression of protests by declaring that "democracy has a right to
defend itself", however, he also expressed his intentions to reach agreements to improve the
standard of living for the lower and middle classes of Chile. The actions of the police and the
army over the past week has shocked one of the most democratic countries in the world, and the
second most democratic of Latin America according to Freedom House.
Chile's high score for freedom of assembly and protest may be affected by the actions of the
state against its citizens this week, which seriously affect the right to protest by
criminalising all individuals involved.
Neoliberal Malaise Throughout the Region
Economic malaise in Chile is part of a regional trend that follows recent protests in
Ecuador, that also began as a product of frustration regarding the economic policies of
president Lenín Moreno.
Protests in Ecuador began as a reaction against a set of economic policies referred to as
the 'paquetazo', which were a series of austerity measures imposed on the country by the
International Monetary Fund in order to cut public spending and repay debts faster. This
included the elimination of fuel subsidies, public salary cuts, and huge holiday reductions for
public employees.
Civil society, but mainly indigenous groups led by the Confederation of Indigenous Groups of
Ecuador, took to the streets for weeks to protest against the measures, until president Moreno
declared that the 'paquetazo' would no longer be implemented.
Chileans, no doubt empowered by the recent protests in Ecuador, have also taken to the
streets with the same hopes: that they will achieve with their protests real change regarding
how their government manages the economy. They also make it clear that the poor management of
the economy and imposition of neoliberal policies have devastating and very human consequences
for the most disadvantaged of Latin America.
It's not only Chile and Ecuador that are facing massive citizen unrest in the region.
Haití is also rising up against the corrupt government of Jovenal Moïse and
demanding not only an explanation for what happened with millions of dollars received from
Venezuela, but also an end to neoliberal austerity policies backed by their northern neighbour,
the US.
The neoliberal model is in crisis, and these protests have clearly demonstrated this. Now,
what happens in Chile will depend on Piñera's capacity to negotiate real change, but if
he fails at doing so, it will be impossible to contain the rage that has already been unleashed
in a country where citizens are tired of injustice and inequality.
Piñera promised economic growth neolib style that has failed miserably.
Southamerica in general is suffering from reduced revenues on raw materials as predicted by
some economists. The former president, Bachelet had some success by increasing corps taxes
and using the proceeds to invest primarily in public education but her social policies fell
short on expectations. Whether MMT could have been applied to widen the scope of her social
policies to health care and other essential public services is something that should be
discussed. Back to Piñera, the very first days of protests, that were basically
dominated by students (workers joined later) Piñera accused them for being
"intransigent and violent" but has had to change his stance and protests widened and got
ample support. I think his change is cosmetic and he really doesn't have any idea in his
agenda that would help to ameliorate the problems. His message for students was simple: "in
life, nothing is for free" when he was defending his privatization plans for education.
Piñera is himself a billionaire.
The main slogan in the protests has been "it's not 30 pesos, it's 30 years". This is not
because the Chileans have their maths wrong (in spite of their abominably privatised
education system), but rather because those in the street are most immediately outraged at
the neoliberalism imposed since Pinochet's departure in 1990.
Yet, as usual, most of the commentary in the Anglophone left has predictably opted to
focus on 1973, because CIA meddling is so much more sexy and less threatening than
questioning the accepted economic orthodoxy imposed alternately by Piñera and
Bachelet's Concertación coalition. That said, the pictures of tanks in the street of
Santiago are bone-chillingly evocative of South America Past.
Viewed comfortably from the other side of the Andes, the Chileans have always seemed to
me– for various reasons including a truly brutal police apparatus– much less
effective at rising up against their oppressive governments than their immediate neighbours,
and they have the privatised education, healthcare and pensions, and rampant inequality to
show for it. So I personally am more sceptical that " it will be impossible to contain the
rage that has already been unleashed". I'll believe it, and rejoice, when I see it.
And one last bit of cold water on the celebratory bonfire: Ecuador's Lenín Moreno
immediately announced that he will be reformulating his hated IMF reforms package, so the
victory dance there is highly premature.
It's worth noting that the government and the parliament are quite lost as to why this
protests came about. This is not just about economic abuse, but rather widespread abuse which
can be seen in everything regarding the elite. Collusion, fraud and corruption in the
parliament, the judges, the national prosecution office, the army, the local police force,
the church, several industries, universities, and many more has been unveiled throughout the
last couple of years. And the outcome has been always the same: if it involves someone rich
or powerful, they are given a handslap and told not to do it again (and I mean it quite
literally: there are rich businessmen who have been forced to assist ethics classes as
punishment).
To top it off, the public education and healthcare system has degraded severely. And the
pension system has been unable to deliver for the average citizen, with half of the retired
people receiving less than USD $200 monthly on a country where prices for products and basic
services are on par with those on some European countries.
There are many important issues I'm leaving out, but for me that's the gist of it.
Not quite. If caught, USA courts will punish the elite. In Chile, Bernie Madoff would have
been off the hook just for the fact that he was rich and well connected.
Pepe Escobar has come out with an article laying the blame for all these troubles as being
due to neoliberalism and he makes an interesting case. He postulates that it will not be long
until Brazil is next and you wonder if these riots will confine themselves only to the South
American continent. Those in power always seem to forget a fundamental law – never
cheat a person that has nothing to lose!
Meanwhile, Bolivia shows what happens when a competent leader breaks out of the neoliberal
model. Prosperity for the nation, health and education for the poor. Evo talks like a Gaian
but rules like FDR. He's not afraid to exploit natural resources for the benefit of the
people.
Needless to say, we're working on regime change already, preparing to declare the
opposition leader Mesa as the "real president" of Bolivia, and then invading to enforce our
declared and defined reality. We can't allow competent leaders to survive anywhere.
Regardless of malevolent US intentions I forsee Evo Morales enjoying this next 5 year term
alongside the Bolivian people. US soft power (if you can call sanctions, diplomatic
isolation, and arming insurgents soft power) failed to unseat Maduro, and Morales is arguably
more popular than Maduro.
I'm an optimist by nature (foolish though that may be) and I think The Empire's grasp on
the global south is faltering.
This is the scary problem. I don't think "I can pay half the population to kill the other
half" is that far from the surface with these creeps. It's still the late 1800s there, with
cellphones and automobiles. That's what the neolibs re-created.
I think it is a mistake to see these as a South America thing in isolation. The neoliberal
program of accumulation by dispossession (David Harvey via Escobar) has infected every
economy in the world, regardless of the particulars of the organization of the state. These
protests are of a package with the Gilets Jaunes, Brexiteers, and Trump's supporters in Chris
Arnade's backrow America. When the ponzi really begins to deflate in the tech sector and
information/entertainment economy where the business model is burn baby burn expect more of
the same in suburban USA and in China's mega cities -- although the EU is in worse shape,
apparently -- They are now coming after pension funds with negative interest rates there
(dispossessing the pensioners of their future income).I expect the EU's days are numbered as
a result.
"Entrepreneurs, rather than taking risk in the normal fashion, by gambling on success,
instead engage in bankruptcy fraud. They borrow against their companies and find ways to
siphon funds to themselves and affiliates, either by overpaying themselves, extracting too
much in dividends, or moving funds to related parties."
This sounds like a fairly precise description of the Private Equity business model.
During the recent attempts to "correct" Venezuela, the now adult child of Venezuelan
refugees from the Chavez years not only tried to tell me that Venezuelans were demanding our
help but used Chile as an example of successful countries who blessed our economic reforms.
They have found a home literally and figuratively with the Baptista Cuban community in Miami.
Suffice it to say my minor research into Chile didn't really mesh with her version. I am
willing to admit I am far from neutral on American economic policy and innovations, but have
yet to find any example from the last century where our preferred policies have not led to
looting, corruption and severe societal disruption. We rarely introduce inequality but never
make it better and often make it worse.
We being America not all of us mooks who live here.
" 11 deaths, mostly due to violence at the hands of the police and the Chilean army"
This is contrary to the reporting we've seen, which is that most of the deaths were the
result of arson fires. That doesn't mean it's true – we've seen fictionalized reporting
before; but it does mean that claim needs backup.
There was a video posted on Twitter where a TV news reporter was trying to interview a
common ordinary citizen off the street, and he very politely (truly), was explaining his
position and why he had felt compelled to take to the streets, but the minute it started to
get hairy by him getting vocal about what people were protesting about, she cut him off and
blatantly started mouthing off what appeared to be a scripted bunch of sound bites favorable
to the government; when he persists in, by that point, in a desperate attempt to try to get a
word in edgewise, she just turned away from him and called for backup among the crew, clearly
silencing any opinion that wouldn't be the officially accepted one. That to me sounds like
the people's complaints about the "real" news not getting out are justified.
I put this in to follow my other comment but it's gone.
Who would know the most about Japanification?
The country that has been like this for thirty years, they've had a long time to study
it.
They are still paying back the debt from their 1980s excesses.
This is the future they impoverished in the 1980s.
Richard Koo had studied what had happened in Japan and knew the same would happen in the
West after 2008. He explains the processes at work in the Japanese economy since the 1990s,
which are at now at work throughout the global economy.
Interestingly enough, the Macri neoliberal experiment in Argentina has largely failed, and
voting on October 27th is expected to end Macri's reign in favour of a centre-left/Peronista
ticket, bringing back Sra. Kirschner yet again. Despite horrific inflation, the rise in
poverty and unemployment, etc., etc., there seems to be little in the way of mass demos as in
other So. American countries, as the public still appears to view voting and resultant govt.
changes as de facto "democratic responsiveness" to current discontent. Naturally, if
the new govt. fails in righting societal and economic wrongs, direct action in the streets
may well ensue, with the police and militares taking the usual side of the governing
elites we shall see.
Neoliberals have an imaginary friend. Money. They love it because they think it has
intrinsic value. They think it is elemental. Fundamental. But it isn't. I wonder how much
they will like it when they realize they've been had. When Neoliberals become disillusioned
what do they do next?
There may very well be an international contagion effect regarding anti-austerity
protests. I find myself in Buenos Aires atm and the violence in Ecuador, Bolivia, and
especially Chile has definitely spooked people about the elections on this coming Sunday. The
top two candidates for president are Macri, a mostly neoliberal, and Alberto Fernandez with
the previous president Cristina Fernandez de Kirchner actually running as his vice president.
The Fernandez de Kirchener government spent much more on social programs than Macri, though
it is debatable whether they could be called leftists, and it is commonly said that there was
enormous corruption during that administration.
Whoever wins, a lot of people are going to be enraged, and I have heard over and over
again that the likelihood of a Fernandez win is why the currency is falling against the
dollar and will supposedly plummet like a rock on Monday in the event of a Fernandez win.
There is a far left party that is not doing at all well in the polls, which baffles me
considering how bad the top two candidates seem to be.
Btw, I'm wondering if anyone else is in this town and wants to do a mini-NC meetup? Not
sure how to go about that.
Great stuff, thanks again. I've long been fascinated by Chile, a country that seems to
have so much going for it, and especially its intimate relationship with "Dr Copper",
although I've never been there. I also clearly need to read Econned.
I found this snip (paraphased for brevity) especially thought provoking.
1. State assets were sold at huge discounts to insiders: industrial combines, or
grupos. Banks gave low-interest-rate foreign currency loans, permitting them to use the
proceeds to seize more assets at preferential prices when the peso fell.
2. But the Pinochet regime did not reverse the Allende land reforms and return farms to
their former owners. Instead, it practiced what amounted to industrial policy and gave the
farms to middle-class entrepreneurs, who built fruit and wine businesses that became
successful exporters.
3. The other major export was copper, which remained in government hands.
To try to broaden the context, may I try to take this story back in time a bit? All
amendments are friendly (I freely admit my ignorance, and it's very hard not to be
reductionist in this medium)
1. 19th century Chile is a post-colonial Spanish society, whose agrarian feudal oligarchs
bring in large numbers of European immigrants (Italians, French and German-speakers?).
2. The steam era (ships and trains) enables rapid opening of the Andean mines (mainly
native labor). Limited industrialization follows (mainly European labor). These sectors in
turn foster a diverse (Caucasian) urban bourgeoisie and technocracy.
3. After 1900, a well-funded state sector also arises, but is more corporatist than
socialist, owing to the need to keep the nonwhite indigenes ('indios') from asserting their
rights (the giant llama in the national room). For much the same reason, unionization is kept
within strict bounds (with military force if needed).
Interesting parallel to today's America? where 20 percenter liberals use racial divisions and
fears to checkmate class consciousness and moves to lift the disregarded 'other' out of
penury.
So long as copper royalties are coming in, dissent (and deep social reform) can be kept at
bay, and comfortable order maintained under the benevolent administration of the 20 percent
(serving the .01, who in this case are mostly offshore?)
4. The copper sector, whether or not nominally state controlled, remains de facto under
the thumb of foreign industrials, shippers and trading houses, the original "Metal Men", who
provide capital and innovation, and effectively set prices. But the two world wars take
nearly all the European industrial konzerns (as well as the great merchant houses of
Antwerp and Amsterdam) out of the picture.
After 1945, they are succeeded by the 'Anglo-Saxon' cartels (Anglo-American, Philipp Bros,
Hunt, etc. forbears of Marc Rich and Glencore) who ruthlessly arbitrage and game global
logistics in the wake of decolonization, and also financialize every commodity known to man.
Even the Soviet and Chinese resource ministries must dance to this tune, although that isn't
widely understood at the time.
5. But by the 1960s, oil is displacing metals, including "Dr Copper", as the life blood of
global capitalism. That last bit is critical for Chile, and for Latin America in general.
6. From 1967 or so, up to the present, the story is likely well understood by readers here
and I won't presume/dare to try to summarize it
But the way forward from today isn't clear to me at all. Can Chile unplug itself from the
global cartel? Are there lessons to learn from Russia? From Venezuela?
Free trade and free markets will bring us all prosperity.
After ten years of austerity, they are still trying to peddle this old twaddle to us in
the UK.
We all know what it is now and that it doesn't work.
Everyone in the US was hoping for "hope and change" with Obama, but he bailed out Wall
Street and maintained the status quo. It was just what the Republicans needed.
The house of Representatives was lost in 2010, the Senate in 2014 and the Presidency in
2016.
Full house for the Republicans and the populist Trump is in power.
Everyone in France was sick to death of the status quo and Macron appeared to offer
something new, but he was just a neoliberal Trojan horse.
The French aren't happy.
South America has been suffering this longer than anyone else and they know it just
doesn't work.
They can be tricked into voting for neoliberals, but they aren't going to be happy about
it.
Our Response to the Next Crisis Must Tackle Consumerism Posted on
October 26, 2019 by Yves Smith Yves here. While one can
applaud the sentiments in this post, status competition is a strong feature of most societies.
Admittedly, some have revered accomplishment or sacrifice or exemplary behavior over having a
lot of toys. But so much of our behavior revolves around consumerism that it affects how we
tackle problems. For instance, one strong theme in Green New Deal programs is to build new
energy efficient housing. Yet the energy cost of a new house is roughly 10 years of operating a
not terribly energy efficient existing house of similar square footage.
Admittedly, this article focuses more on consumerism in terms of more mundane purchases like
clothing and devices, but "household formation" and moving almost always involve a buying
stuff. Even if your old goods work well in new digs, there's still always something to buy
curtains, a new lamp .while in the old days, people would inherit houses, furnished, and not
change them much (or if they did, gradually), or lived in rooming houses with very little.
By Rob Macquarie, a writer and researcher focusing on the financial system and its links
to inequality, democracy, and sustainability. He tweets @RJMacquarie. Originally published at
openDemocracy
If there is one way the
next economic crisis won't be the same as the last, it will have to do with the state of
our planet. In 2008, the
Copenhagen Accord hadn't been signed, let alone the Paris Agreement – or millions of
schoolchildren missing Friday lessons to protest the terrifying future they will inherit.
Now, economic transformation is widely viewed as a prerequisite for halting ecological
breakdown. Because of this, the next crisis is often presented by those who long for change as
a golden opportunity, envisaged with massive investment in energy systems, transport, and clean
industrial technology.
To be sure, these changes cannot come quickly enough. Yet they are not the only piece of the
economic, nor ecological, puzzle. The ruling elites of wealthy countries have a poor record in
undertaking ambitious public spending. Instead, they look to ordinary citizens –
recast
over decades as 'consumers' – to carry the load.
Household consumption on aggregate represents the largest chunk of economic activity in
most countries. Though often characterised as 'motor' or
'engine' of growth, as things stand a liferaft would be a
better metaphor . During recessions, household spending can remain relatively flat compared
to investment and therefore GDP more broadly. In the US, consumption, though battered by the
storm of the 2008 crisis,
supported employment in the face of declining business prospects.
Our economic dependency on consumerism is linked to changes afoot at the global level, both
secular and cyclical. On the one hand, the gradual march of (privatised) digital technology and
financialisation have undermined and disrupted investment in the real economy as a source of
stable prosperity. Listlesss productivity
in some G7 nations and a massive reduction in state spending under austerity regimes have
placed much of the burden on households.
In Britain, this sterling effort from the 'good old British
consumer' comes at a cost. Households have been taking on
net debt – in other words, running down their wealth – since 2016. Financial
pundits
present debt-led increases in household spending as a natural source of GDP growth despite
only having assumed such a prominent role following the 1980s' neoliberal turn.
On the other hand, present conditions have also sharpened our reliance on the household
consumer. This is by no means limited to the relatively financialised Anglophone economies.
Germany's mighty manufacturing sector, beset by difficulties from Brexit to global trade
disputes, is behind recent gloom in the
economic figures . Major infrastructure projects, if badly conceived, can lock in an
unhealthy incentive to keep the population spending – see the hapless development of
Berlin's Brandenburg
airport , dependent on retail for up to half of its profits. Meanwhile, the UK's
sickly retail sector , pressed on one side by trade uncertainty, strains under ever-larger
piles of corporate debt.
All of this has disastrous ecological consequences. In 2009, in the wake of the global
recession, Friends of the Earth Europe reported people in
rich countries consume up to 10 times more natural resources than those in the poorest
countries. As development raises standards of living for vast numbers of people living in the
Global South, especially in China and India, keeping material consumption and carbon emissions
from spiralling upwards will require a change of gear in resource efficiency and, simply put,
more frugal behaviour by Western consumers.
Last year an important paper in Nature found
that 'physical needs (that is, nutrition, sanitation, access to energy and elimination of
poverty below the US$1.90 line) could likely be met for 7 billion people at a level of resource
use that does not significantly transgress planetary boundaries'. Meeting 'more qualitative
goals (that is, life satisfaction, healthy life expectancy, secondary education, democratic
quality, social support and equality)' for people in all countries will require major changes
in 'provisioning systems' – that is, an overhaul of economic institutions. In other
words, unnecessary material goods valued by Western shoppers put at risk the attainment of even
more fundamental social and human rights for the majority of the world's population.
So the policy response to a fresh crisis must be viewed through an ecological lens. With
interest rates still at rock-bottom and quantitative easing
alive and kicking , the flow of easy money creates a powerful incentive to urge an anxious
public to 'keep calm and carry on spending'. The planet cannot afford such timidity, nor
complacency over a spontaneous rise in so-called conscious consumerism.
Instead, as well as supply-side measures clustered under a Green New Deal or Green
Industrial Revolution, the crisis toolkit must consider consumer demand. Policy can make a
consumption surge conditional on sustainability with policies like fiscal incentives for retail
companies to apply rigorous, sustainable standards. Electric vehicles already enjoy support
from governments in many countries – notwithstanding some
rowbacks . These schemes
can be designed to contribute to the fiscal 'automatic stabilisers' that push back against
a recession: for instance, by channeling money from penalties for emissions-intensive vehicles
into subsidies for EVs.
Alongside a shake-up of the energy mix, governments must promote the circular economy.
Investment can target projects aimed at reducing household and supply chain waste.
Right-to-repair schemes being pioneered by civil society deserve tax incentives or other
market-shaping assistance from the state. And across all industries, we must move away from
early obsolescence of consumer goods. A report prepared for the
European Commission in 2012 recommended a host of policies to target these issues, such as
grants for industry to initiatives to improve product lifetime or reduced VAT for more
efficient and durable products.
Thinkers pioneering a new economics are joining the dots between the demands of sound
economic management during a downturn, social justice, and the ecological crisis. Vocal
criticism of a decade of austerity laid the groundwork. Now progressives, eager to raise living
standards, must watch their messaging to promote sustainable consumption. Those sounding the
alarm about resource use are right that rich nations must not continue to overspend their
ecological budget.
When the next crisis arrives, parties arguing for a green transformation will have to prove
they understand that.
Esau sold his birthright to Jacob for a "mess of pottage" (Genesis 25:27-34).
It's no exaggeration that the birthrights of many, many people are gone.
Were those birthrights sold for a mess of pottage (consumerism) or were they legally
stolen by a unjust economic system with consumerism as pitiful compensation?
Mash up with Facebook and such where people and their data, now improved with the 23
new DNA features , are the product to see how birthrights get sold, seemingly
voluntarily. Dark patterns are noticed popping up everywhere once they are pointed out.
Neo-liberalism needs a new modern name and a better publicist.
I've always suspected "Consumerism" to have been invented and used as a weapon against
unions. We must supply the consumer with inexpensive products, etc. IIRC consumerism didn't
start to enter the dialog until the 80s in any significant way. And then it was everywhere
all at once. Spontaneous realities like that are confusing. Just where did it come from? It
happened in Germany about the same time. They didn't crush their labor/unions like we did. We
were absolutely ruthless. And it was all justified by claiming we had to make sure the
consumer was well supplied. What a bunch of nonsense.
I not only applaud the sentiments but the ideas, many of them otherwise played in many
posts here such as the rigth to repair and a real turn to circular economies. Yet, i still
miss something that being politically very difficult, it is IMO a must: puting legally
binding limits to fossil fuel consumption.
Regarding status competition: I personally have cut my consumption by much in the last
decades although I was never a big spender. I don't think my personal living standard has
declined, on the contrary, I think my life is richer in many aspects. I don't try to sound
exemplary, I am not in many instances. I admit that a big reason for this Is that I have lost
income but lately It has been more a voluntary thing. I am a disastrous manager of
smartphones that too often are lost (I am famously lost-in-thougth in my environment), or
take them to swim with me, or fall and break when I am in a hurry because I forgot something
somewhere. For this reason I cannot afford too expensive smartphones though I don't feel the
need to have the latest. With more people like me, the rigth to repair and recycling of
smartphones is a must. I still consume too much meat, partly cos I like it, and partly
because members of my family with chronic iron defficiency ask for meat. Most importantly, I
have no longer empathy for those that feel the status competition and the impulse to own the
largest house, the fastest car, the latest tech thingy or having dinner in the most expensive
restaurant. I don't feel alone in my environment and a lot of people I know are on the same
page on this. Status competition can die and good riddance should I say.
about iron deficiency Ignacio, I read long ago and it proved true for me that if you take
a good B-complex every day (no problem bec. B is water soluble) it solves iron
deficiency.
Another note about B12. It is not well absorbed by those over 50 and so levels need to be
checked periodically. One of the symptoms of a deficiency is confusion.
I wonder how we could manage to implement potlatch -- where a person's wealth is judged by
what they can give away, rather than the amount that can't be pried away from them by any
possible means.
It may not be potlatch, but ANTI-status competition seems already to be catching on in
places like Sweden, with flight shaming, shaming over owning more than one of the same thing,
shaming over buying new stuff etc..
Subsidies for electric vehicles are unicorn farming. The materials required for a
transition to EVs simply don't exist, the grid can't support it and automobiles facilitate
sprawl, which is at the heart of western consumerism.
Unless you charge your EV with power from your solar cell, EV's are just transference;
from gasoline to fossil fueled power from the power plant.
In lieu of charging your EV with your own solar cell, the CO2 from the power plant needs
to be reduced by emission control to achieve an overall reduction in CO2 to the atmosphere. I
wonder if this will ever happen.
The only advantage for EVs environmentally would be that although it is still a fossil
fuel derivative, its emissions (at the power plant) could be captured and either reprocessed
or sequestered. Also EVs are lighter cars and so require less heavy manufacturing. One
solution no one ever mentions is logistical. Delivery trucks could deliver everything a
neighborhood needed/ordered and leave it at a neighborhood depot. In the walk-to spirit of
the old corner store. And everyone could walk or bike to pick up their orders.
Oh right .. I'm gonna lug that 200lb+ Ikea shelf (could be any large, unweldy item or
items) package on my back !! 2-4 blocks from the 'depot' to my house ?? Even using a bike
would be problematic .. even with the use of an E-bike .. on anything other than level
terrain .. and that is assuming your purchases aren't 'lifted' before you arrive to claim
them !
All this talk of walking or biking to achieve X doesn't take into consideration the multitude
of circumstances .. due to health or logistics, just to name a few .. among various
individuals that preclude such easy and flippant response !
If people were to resort to using draft animals, then perhaps that would work, but not
without adding in other 'externalities' into the mix.
Even when the power is generated using fossil fuels, electric vehicles usually, compared
to gasoline vehicles, show significant reductions in overall well-wheel global carbon
emissions due to the highly carbon-intensive production in mining, pumping, refining,
transportation and the efficiencies obtained with gasoline. This means that even if part of
the energy used to run an electric car comes from fossil fuels, electric cars will still
contribute to reduce CO
2 emissions, which is important since most countries' electricity is generated, at least in
part, by burning fossil fuels.[
Environmental aspects of the electric car That said, Yves has posted several articles
suggesting it is physically impossible to convert the world's fleet of POVs to EVs. If we are
going to continue to pack the planet with people, electrified mass transit is the obvious
choice. My question is what role do EVs play during the transition?
Electric vehicles are actually more efficient in their use of energy and so it's NOT just
transferring energy use from one place to another.
"EVs convert about 59%–62% of the electrical energy from the grid to power at the
wheels. Conventional gasoline vehicles only convert about 17%–21% of the energy stored
in gasoline to power at the wheels"
Don't take this is an argument that electric vehicles don't have any problems, and these
aren't total lifecycle calculations, but thinking the energy use is merely transferred just
seems to be a misconception of how electric vehicles work.
When you charge an EV, where are you getting that electricity from? I think that is what
is being argued. If you are getting that energy from a coal plant, you aren't saving
anything, and plastic requires oil to manufacture. For that matter, what about all the heat
energy used to smelt the copper, etc?
The overall eficiency of a fossil fueled power plant using steam turbines to extract
energy is about 33% on the average. Even if EV's convert 60% of the electrical energy to
power at the wheels, 70% of the enegy is already lost at the power plant.
aye. status symbols mean nothing to me which is a big source of the "weird" label i so
proudly wear.
I'm usually rather filthy dirt and paint stains, holes from barbed wire -- i counter that it
means i work for a living, dammit haven't cut my hair in 15 years(except for the occasional
knot(whip out a pair of wire cutters at a wedding, and remove a knot,lol I'm almost
legendary) and don't even want, let alone need, a new used truck every other year(again, at a
wedding, I come through the dancing people with old milk jugs to get water for the steaming
radiator others are mortified, for some reason because we're all supposed to pretend that we
ain't po folks)
I'm locally notorious for coming out of the landfill complex with more than i go in with,lol
and my shamelessness is actually contributing to open discussion about such things.
i do not hide my contempt for all that pretentious posturing especially if it's people who
should know better .down nose looks at my clutter, when i've been to their house,lol, and
know!
emulating the rich is a cancer on our civilisation ."they're food, people!".
however, i think that globe encircling supply lines and built-to-be-replaced (foreign)
manufacturing are the bigger, if easily related, problem.
doesn't fit easily on a bumpersticker, but the local veggie grower can't compete head to head
with slave labor far away .and shouldn't be expected to global markets are not akin to
gravity or a thunderstorm: they are the products of human minds and human choices(just not
often our choices i don't decide how much plastic is in whatever necessary product i buy)
at the root of all this consumerism is media including the web.
since i took a copywriting class(as in ad copy) in college, i've been immunised against
advertising it just doesn't effect me.
but it sure does effect everyone else.
(i also realise that i am anomalous and unreplicatable in a lot of this i've always been a
weirdo outcast, and so never developed the clique-behaviour of my peers i don't have anything
to prove, because i learned early on not to care what the people around me thought since they
were, apparently, shallow and ignorant, overly concerned with what other mean and shallow
people thought. this might be a possible upside to being bullied/excluded -- given the right
circumstances, it builds independence of mind and a hard, spiny carapace. (this in no way
implies a fondness for bullying and exclusion.))
very similar here. I think the problem is simple greed as a form of addiction. The people
at the top want more. Therefore, sell more. They know the cost of everything and the value of
nothing. Older I get the more and more of my stuff is built in USA prior to 1950. The only
people who know the value of a buck is the ones thats had to work for it.
I got rid of all the crap over the years -- and thats another thing, ever notice how much
plastic crap there is? The car costs the same but its all plastic now and you can't fix it.
Thats another way they rip you off with crapification. Thats why I pulled out of that rat
race. I'm keeping my 30-yr old jeep on buckboard wagon springs.
When I think back to how life was lived in the 1950s to today, the first thing that comes
to mind is how much we as a society have moved away from real household goods of good
materials and quality to a more cheapish plastic throwaway lifestyle via furnishings,
appliances, clothing and plastic bags and bottles everywhere. Every time I see a Wayfair
commercial chills go through me for all the plastic garbage crap that is out there. Isn't
this the crux of the problem, always believing new stuff no matter the quality as long as it
is cheap is the way to life live in America? Get it and then throw it away. This is where the
reversal should happen, getting consumers to buy well made household goods and pay for it so
they can keep it for years and years. Buy quality. Believe in quality. A real wood table or a
real marble one. People have wanted to buy cheap garbagey stuff for too long already, items
no one wants so they get thrown away. I visit estate sales in the past couple years and some
of the furniture the oldsters among us lived with is exquisite, extremely well made. Now
compare to what is out there now. Or clothing, another category. If you buy real fabric like
wool or cotton or silk, your items will last forever. Beverages should be sold in glass
bottles again. Stop living a disposable lifestyle, How to drill that into people who don't
know any better is the trick. But this will be a way for people to stop some of their
nonsensical consumerism. Also an option is to buy used things. In New York many of us found
furniture on the street other people threw out to be great for furnishings. Recycling on a
larger scale.
One issue I have with this is that some elements of structures have improved
significantly. Case in point are windows. Energy efficient windows and glazing are a vast
improvement over that available in the 50s. That said, obtaining efficiency with retrofitting
older structures takes the input of a lot of energy and cost.
re: windows now better than windows 60 years ago.
when we moved back out here, we learned that wife's familia intended to demolish the 1950's
era house we were living in in town(it being an insulationless POS that drunk uncle had let
go to hell was a major factor in building our current house).
so i spent that winter removing all the old windows(and as much of the wood clapboard siding
and cedar interior one by's as i could) and storing them.
single pane and fragile as hell.
just look at them wrong and they break(better once installed).
i used those for the greenhouse attached to the house(passive heating!) but the difference
between those ancient aluminum framed things and the new "e-rated" windows in most of the
house is astounding. on a cold day, place a hand on them and the difference is apparent.
those old ones are sufficient for the greenhouse, though.
(i also used a bunch of even more ancient windows in parts of the house, that my family
had saved some from the teens. the glass is more robust and thicker than the 50's plate,and
the wood framing insulates a bit better than the aluminum but i still went to the trouble to
put shutters on them(some shutters still in progress))
i read a study just recently that said that older windows, repaired properly, are not less
efficient than modern windows. they passed the variety of blower tests.
now, as for e-coatings, triple panes and argon fillings i don't know. but it did say that
this was good news, because people can stop tossing out their historic windows in favor of
the new just for energy savings. it goes without saying that if you live in a place of energy
extremes, your windows shouldn't be huge anyway. the r-value is, even in the most expensive
window, only 1/3 that of the wall or less.
Some solid points here about buying goods based on quality and stuff to last. Why eat off
plastic plates when you can eat off plates made of porcelain? I still have plates given to me
by a girl when she was moving house back in the late 1970s that I constantly use. You cannot
say the same for a plastic plate. If we were forced to move back to a 1950s lifestyle but
with high-tech bolt-ons I do not think that people would mind in the long run. Smaller homes
versus McMansions? Yeah, I could buy into that.
The second half of the equation is that manufactures will have to be forced to make goods
that are built to last at a reasonable price and that are easily maintained & repaired.
We have an antiques furniture store near hear and it can be highly interesting wandering
around and looking at the common place items of past generations. The furniture is built well
and is made of beautiful wood but that does suggest something. When you look at the crap
furniture that is made these days, I seriously doubt that much of it will be found in antique
stores by the next generation as it simply will not last.
And that is the point. making things that last. As an example – light globes. They do
not last that long and they dim but what would it be like if they were manufactured to last
decades? There are currently light globes that were manufacture in the 1890s that are still
burning today with Livermore's Centennial Light Bulb being one example. Imagine if nearly
everything was built to last for years if not a few decades. What is that? Corporations could
not survive with that business model? You wonder then how they managed to make it work a
century ago then.
Planned obsolescence should have been our first clue. It had nothing to do with
competition, or the latest fashion – those were just advertising ploys. Planned
obsolescence was a necessity to keep capitalism going. Because, ironically, capitalism is a
very good supplier. Until demand runs out. Then capitalism has no where to go. Except to dive
deep into consumerism and denial. Which is one reason I keep hoping for an ingenious idea
that puts capitalism to work repairing the environment. I don't know why we can't have
reverse capitalism. It could be a great economic engine for centuries to come.
"Planned obsolescence should have been our first clue"
Many of the people shopping today do not know that a kettle should last 20 years or
blender should last 30. I have a 50 year old electric frypan for goodness sake and it still
works fine.
I know I clued in early and stopped buying from the stores, I look for old stuff at the
thrift stores and if I can't find it there I do without
I don't know if their are any companies around anymore who make quality .products at any
price
we still use by grandma's art deco blender, from the 50's(waring–replacement parts
are still available for pretty cheap, too)
heavy glass jar, steel housing. i replaced the cord(i have a pile of those,lol)
.and being a frequent landfill scavenger, it's crazy what people throw away even with the
recent local wall to wall about permitting a new landfill. lumber to cinder blocks to actual
bricks, boxes of natgeo and scifi mags going back to the 30's and of course, all the
structural steel and slightly bent metal roofing and gutters galore.
what's depressing like mentioned here, is the furniture and appliances not even worth trying
to repair or repurpose. particle board and staples for the former -- melts in the rain and
the cheapest plastic and pseudometal for the latter -- will never decompose.
like with the plastic packaging(which i think is a plot to make us nuts need tools to get
into the damned things), a lot of the "choice" is somewhere upstream of us, but still.
I'd never spend money on the "furniture" i see at the dump.
Enjoy your rant so (of course) I have to nitpick one thing:
>I still have plates given to me by a girl when she was moving house back in the late
1970s that I constantly use. You cannot say the same for a plastic plate.
Actually, you can. Plastic wouldn't have been so much of a problem if we had stuck to
making things like plates out of it. If you don't believe me, give me your china for a bit
(no DON'T seriously!) and see how long it takes my family to break it. The plastic stuff can
be dropped infinite times.
I used that example of the plates because last night I had to throw out a plastic plate as
its surface was 'bubbling'. By the same token, not all those china plates have lasted the
past forty years but more so than if they had been plastic.
we could be satisfied with our material goods a bit more than we are, if those goods were
made and designed properly.
case in point: clothing. there is no actual way to make clothing that is not
environmentally challenging. even back in the days when we did it for purely natural fibers,
dyeworks and processing plants were noxious.
but try to buy anything that isn't some kind of odd blend of plastics and barely-there
fiber now. try to buy something like a good linen shirt. for some of us, these things have
been priced beyond our reach. and a good linen shirt would probably last 5 years or more.
replicate that for every item of clothing you have (barring socks, underwear and shoes
which have to be replaced more often). i don't remember the last time i had something that i
wore regularly which lasted 5 years, but believe it was sometime during the 90s. sometimes it
doesn't last beyond the first wash without snags and oddities appearing. and i am not that
hard on anything, unlike a genuine "working man" who has a ton of muck that has to be washed
out of the clothing every week.
repeat for many household goods. in whose interests is it that we buy, and rebuy the same
crap every single year?
We had a neighbour from the mill-towns of England that brought out a lot of material from
where she worked. The stuff lasted for decades. Clothing was like that once and I have a copy
of an 1805 will in which it mentions what would happen to the clothing as it was rugged
enough that you could pass it along and so was worth mentioning in a will. I read too that in
medieval time a air of shoes would be passed down a family and would last about a century.
The manufacture of clothing that lasts a season is only a commercial decision which we are
all paying for.
One big difference between the way life was lived in the 1950s and today is that in 1950
people could stay in one place and work at the same job and retire. Nowdays, at least in my
line of work, it is difficult to find a job you can count on for more than a few years.
People used to stay married and could remain in the same house for most or all of their life.
I moved all over the country chasing work. I adopted a throwaway lifestyle for my furniture
because if I couldn't throw it away or take it apart somehow I couldn't move it by myself. If
I didn't move myself -- if I paid movers -- it cost more to move most of my stuff than it
cost to toss it -- even 'quality' furnature -- and replace it with more cheap junk I pick up
from the curb or buy at Goodwill Stores, good enough to last until my next move. As for "buy
quality" -- I value the quality of well made furniture efficiently constructed using
materials light in weight, comfortable, stable, and strong; furnature I can easily take apart
and reassemble, and move myself. What I have isn't exactly throwaway, nor is it the kind of
quality you value.
[Even friends have become throwaway in the same sense as my furniture. I write, and call,
and sometimes drive long distances to visit but invariably my friends and I grow apart and
they stop answering. The family I grew up with is scattered from coast-to-coast and much of
it grown as remote as old friends. The family I started has broken up and it too has
scattered in search of work and opportunity.]
Returning to "buy quality" -- where is that stuff sold? I can buy quality names at high
price but the old slogan "quality goes in before the name goes on" is just empty words.
you wouldn't have had to buy and replace or move furniture if we had high quality
built-in, nearly fully furnished apartments.
same goes for the much vaunted "smaller houses". the reason, at least i believe, people
started to go larger is because a smaller space has to be much more carefully designed and
thought out in advance, and furnished with versatile pieces in order to suit the variety of
living functions that the space will be used for. which is easier? getting a
nearly-custom-designed home capable of being used for everything, or adding another/more room
to the plan and putting in more furniture and appliances to suit the activity? most people
have no means to afford architects or interior designers, so simply go with the extra
rooms.
this most readily shows up in the often-repeated fact that you can buy a smaller home, but
finishing it to a decent level will cost you the same or more than a larger one. a lot can be
hidden in big rooms and extra rooms. faulty design, for one.
Jeremy, your comment is very matter-of-fact and very touching, especially the next to last
paragraph. That's where so many of us are. Inode Buddha and Diphtherio stress community. It's
hard to find and hard to make.
"Returning to "buy quality" -- where is that stuff sold? I can buy quality names at high
price but the old slogan "quality goes in before the name goes on" is just empty words."
Unfortunately, the Peoples Republik of NY does not allow trash picking from dumps, so I
resort to Craiglist and eBay. Or simply thrift shops, family, and friends. Yard sales and
estate sales are often gold mines. I *wish* we had boot sales in the USA.
Clothing is all natural BTW: leather, cotton, wool.
I hear you, having moved more than a few times across the country for jobs and
opportunities, something employers used to pay for but no longer. I learned how to streamline
my stuff which means I spend hours before a move to get rid of the nonsense. What does come
to mind though is how much better the furniture and appliances were made back then compared
to now, in other words the quality and workmanship is much higher. Used to buy from Ethan
Allan where actual American people would sign the pieces they made. Sigh. There is something
to be said about buying furniture from the actual person who makes the pieces. Natural
materials and high quality. Just one example.
As you indicated, lives are different now, without the security of family and life long
friends and neighbors. And steady employment. As a way to defeat consumerism it may be
worthwhile to really pay attention to what is being bought and to buy it with quality in mind
so it will endure. Again I have noticed a lot of furniture and art pieces and decorations
that are very high quality at estate sales where these types of items would never be made and
sold anywhere now. Unique pieces, very well made. The way things used to be. We lost that
sensitivity and now buy senselessly. Just to buy, just to fill a void. People don't really
need that many things.
I keep on thinking that economic incentives for refraining from having children would be
nice in order to emphasize how destructive our population has become in creating
anthropogenic global warming. However, it seems to me that it is hard to link social
responsibility to positive economic benefits and far easier to impose financial burdens.
Either way, though, population needs to be addresses or a "circular" economy will be
impossible.
Just what I was going to say
Consumerism goes hand in hand with the brainwashing that goes on.The reason we shop so much
is because it feels bad when we don't, I have actually had people ask me how I manage to not
shop or not watch TV I am now the "strange" old lady.
In my personal experience, I have seen how Poverty reframes and affects all personal
consumption choices.
Lots of compromises between what you would like to buy and what you can afford with the money
you have.
And of course there are strategies to offset that for the informed.
Not an excuse and we all could do better driving our demand to a better outcome–but
not to be ignored or underestimated–imo
Light globes = bulbs, could last very long if they were run with the tungsten filaments at
a lower voltage (cooler).
The trade off is that running the filament cooler causes the light output to drop, so the
electric bill is higher for the same light.
The new LED lamps, assuming they have quality and well-rated electronic components should
be able to last a long time and provide good light at a lower cost.
LED light bulbs should last a very long time. I saved a few of the LED light bulbs after
they failed and tore one apart. Inside there is tiny power supply board to convert the 120 V
alternating current to a level to drive the LEDs on a puck connected to the power supply. I
have a hunch that the LEDs are still working fine. I even wonder how many of the little power
supplies are still working just fine after taking a look at the wire connection between the
power supply and the base of the light bulb assembly. [I haven't tested out my hunch yet --
it's one of many projects part-way along that clutter the folding tables that furnish my
living room.]
Consumerism will be destroyed at the same time all nation/states are destroyed at
Armageddon. Until then Satans system runs the way it is. Greed will not allow humans to get
rid of it.
Pepe Escobar presents a high-altitude view of Latin America in general in this regard.
Neoliberalism is over in that continent - and there is a LOT of ground-level intention to
overthrow the whole rule of plunder, in several countries:
Naomi Klein made the same observation a few years ago, that South America was the first
region to suffer from the Shock Doctrine, and has become the leader in recognizing it and
fighting against it.
Not to say we have a done deal yet, but it seems to be an organic work in progress. And
your reports are very sobering. There will be much fire before the burning is finally done,
it seems. But my only point is that maybe the economic cycle of expand and collapse that you
cite is not inevitable. Maybe countries can break out of it.
Escobar's piece was linked in an earlier thread and I assume you've seen it already. It's
pretty sobering too but it paints a future of possibility.
43. Whatever Latin America does to it's 'neoliberal rule of plunder' I will bet you 100 pesos
that whatever comes after it, out of the 'genius' of street protest, it will look more like
Venezuela than .... you see? I can't even come up with a good example of South American
societal order. What you have there is a continent that has not even begun to understand how
deeply embedded in their collective consciousness their 'oppressed' mentality is. And with
good reason. Shit history. But no way is there the enlightened thought capable of building a
nation state that can stand the test of time. 100 pesos.
(nytimes.com)
427writes in an
op-ed : Yet, as a capitalist, I believe it's time to say out loud what we all know to be
true: Capitalism, as we know it, is dead. Yes, free markets -- and societies that cherish
scientific research and innovation -- have pioneered new industries, discovered cures that have
saved millions from disease and unleashed prosperity that has lifted billions of people out of
poverty. On a personal level, the success that I've achieved has allowed me to embrace
philanthropy and invest in improving local public schools and reducing homelessness in the San
Francisco Bay Area, advancing children's health care and protecting our oceans. But capitalism
as it has been practiced in recent decades -- with its obsession on maximizing profits for
shareholders -- has also led to horrifying inequality. Globally, the 26 richest people in the
world now have as much wealth as the poorest 3.8 billion people, and the relentless spewing of
carbon emissions is pushing the planet toward catastrophic climate change. In the United
States, income inequality has reached its highest level in at least 50 years, with the top 0.1
percent -- people like me -- owning roughly 20 percent of the wealth while many Americans
cannot afford to pay for a $400 emergency. It's no wonder that support for capitalism has
dropped, especially among young people.
To my fellow business leaders and billionaires, I say that we can no longer wash our
hands of our responsibility for what people do with our products. Yes, profits are important,
but so is society. And if our quest for greater profits leaves our world worse off than before,
all we will have taught our children is the power of greed. It's time for a new capitalism -- a
more fair, equal and sustainable capitalism that actually works for everyone and where
businesses, including tech companies, don't just take from society but truly give back and have
a positive impact. What might a new capitalism look like? First, business leaders need to
embrace a broader vision of their responsibilities by looking beyond shareholder return and
also measuring their stakeholder return. This requires that they focus not only on their
shareholders, but also on all of their stakeholders -- their employees, customers, communities
and the planet. Fortunately, nearly 200 executives with the Business Roundtable recently
committed their companies, including Salesforce, to this approach, saying that the "purpose of
a corporation" includes "a fundamental commitment to all of our stakeholders." As a next step,
the government could formalize this commitment, perhaps with the Security and Exchange
Commission requiring public companies to publicly disclose their key stakeholders and show how
they are impacting those stakeholders.
In trying to make up for my ignorance on Rome's history I came across P. A. Brunt's
"Social Conflicts in the Roman Republic." His account of the innovation of the office of the
tribune gave me a good sense of the intensity of those conflicts:
"In 494 a great body of the plebs sat down en masse outside Rome and refused to serve in
the army. Such a 'secession' or strike undoubtedly occurred in 287, and similar revolutionary
action must have been taken now, to account for the concession the patricians were forced to
make: the creation of the tribunate of the plebs. The ten tribunes were plebeians annually
elected by an assembly organized in voting units calle tribes; these were local divisions of
the state, originally four within the city and seventeen in the adjoining countryside. This
assembly was truly democratic at the start, when the tribes were probably more or less equal
in numbers; the rich had no superior voting power.
The original function of the tribunes was to protect humble Romans against oppression by
the magistrates; they did so by literally stepping between them and their intended victims
(intercessio). The magistrates did not dare touch their persons, which were 'sacrosanct';
that meant that the whole plebs were sworn to avenge them by lynching whoever laid hands on
them. But their power was confined to the city; outside the walls, Roman territory was still
too insecure for any restriction to be allowable on the discretion of the magistrates to act
as they thought best for the public safety. This limitation on tribunician power subsisted
throughout the Republic, long after its rationale had disappeared." p.52
In this light, it seems that the obstructionist quality of tribunician power that Yves'
refers to stemmed from the original need to allow plebs to put the kabosh on patrician power
to avoid revolution. Another instance of when peace brought about by a veto power eventually
makes the veto power appear unnecessary.
The limitation on the power of the tribunes in rural areas was relevant to a factor in
Rome's development Brunt places a lot of weight on: the breakdown of plebian farmholding, in
part through loss of land through absence brought about by conscription, but also by
patrician gang violence. In his telling this alienation by dispossession was ongoing to
varying degrees during the Republic.
During the New Deal, the union leaders were effectively tribunes without veto power, but
still considerable influence as they controlled a large number of voters belonging to
respective unions.
Similar short story was with Russian "Soviets" -- worker and peasant consuls until Stalin
centralization of governance. They were kind of power check on Bolshevik party Politburo (a
kind of Senate, the Bolsheviks party nobility )
By Newdealdemocrat. Originally published at
Angry Bear
"Mortal Republic: How Rome Fell into Tyranny," by Edward J. Watts "The Storm Before the Storm,: The Beginning of the End of the Roman Republic" by Mike
Duncan "Ten Emperors: Roman Emperors from Augustus to Constantine," by Barry Strauss
I've recently mentioned that lately I've been unable to read most American history books,
with their currently unwarranted chipper optimism. Instead my recent reading has focused on
other periods of crisis.
One question I've been considering is, just how rare, and how stable have Republics
historically been? There are few antecedents for the experience of the US, because it has
aspires to both be a Republic under the rule of law and simultaneously a superpower. In fact I
believe there are only four, in reverse historical order:
The British Empire (yes, I know,
it's technically a monarchy, but it has been a parliamentary democracy really ever since the
Glorious Revolution 400 years ago). The Dutch Republic (I'm not sure if this really qualifies,
since it was more a confederation of principalities, but it was styled a Republic, and it did
have global interests.) The Republic of Venice (this is a dark horse contender, but this
Republic lasted almost 1200 years, from roughly 600 A.D. until it was conquered by that other
"republican," Napoleon, in 1797). The Roman Republic.
In these four posts, I'm going to summarize what I've learned about the Roman Republic
from the three books that lead this post.
While we're all familiar with Julius Caesar crossing the Rubicon, and probably all had to
read Shakespeare's Tragedy of that name (but really about Brutus and Cassius) in high school, I
don't think much attention has been paid in modern education to the Roman Republic, which
lasted 450 years – almost as long as the subsequent western Roman Empire – and was
avowedly the model that inspired the Framers of the American Constitution. None of the books
that have come out in the past few years, to my knowledge, have discussed either the Roman
Republic or other historical antecedents to the US. I believe studying the rise and demise of
the Roman Republic, which during its existence was extremely – probably too –
successful, is well worth the effort.
Without intending so, I read the above three books in reverse chronological order above.
"Ten Emperors" was first, followed by "The Storm Before the Storm." Unfortunately this latter
book (in my opinion) wound up being a chronological blow-by-blow vomiting of not well organized
facts. It desperately needed a list of "dramatic personae" with at least a couple of lines
describing the most prominent 20 or 30 individual's role, so that when they re-appeared after a
30 or 80 page hiatus, I could recollect who they were. It also needed an initial chapter
setting forth the basic governing details of the Republic, and most importantly the roles of
the Senate and the Assemblies. In the end it left me so unsatisfied I went back and found
"Mortal Republic," which was a much more orderly and understandable if less detailed
treatment.
If you are interested in the material, I recommend you read "Mortal Republic" in segments,
and then read so much of "The Storm Before the Storm" to fill in the details until you reach
the same chronological point. Once you do that, when you start the final book, you will see
that the process of Imperial succession in the Empire was very much like the power struggles in
the last 60 years of the Republic, and in particular sets forth Augustus's programme and genius
in more detail.
To cut to the chase , the Roman Republic, which was previously quite stable (as
Republics, once they last a generation or more, tend to be), was toppled by a series of
hammer-blows that fell over roughly a 100 year period. The shortest version is that the type of
factional political violence that brought down the Weimar Republic in 10 years took 100 years
to infect and ultimately destroy the Roman one.
There were three levels of causes for this fall, in order of importance:
The de facto
requirement that all senior magistrates and in particular the consuls (analogous to Presidents)
be military commanders, who frequently raised, and increasingly paid for, their own armies. The
increasing breaches of "mas maiorem," or the customs and norms by which the Republic had
operated, on all sides. The split between the oligarchical "optimates" who dominated the Senate
on the one side vs. the "populares" or ordinary Roman plebeians who dominated the Assemblies,
and also the Italian allies who were not Roman citizens, on the other.
More basically put, #3 was the substantive source of disagreement over which all parties
were willing to go to extremes; #2 was the procedural unraveling of the manner of government;
and #1 over time ensured the rise of what we would now call "caudillos," or political generals,
who had the force to overthrow it.
Both histories I have read suggest that the "turning point" where the stresses started to
undermine the Republic was after its greatest triumph: the defeat and obliteration of Carthage
after the third Punic War.
The Structure of the Roman Republic
From its founding as a trading point on the Tiber River until roughly 600 B.C., Rome was
ruled by Etruscan kings, who were then overthrown and the Republic was founded. On a broader
historical scale, it seems that Republics are actually pretty sturdy forms of government once
their institutions take root after a generation or two. That's good news at the present, where
at very least, for example, Russians and Iranians are getting used to the concepts of having
elections and courts.
The Roman Republic was a system by which "Assemblies" of the tribes of Romans directly
elected the executive officers of the Republic for one year terms. Meanwhile the Senate,
essentially a council of notables, gave direction to those executive officers in the carrying
out of their duties. The lowest level official was a "quaestor," basically an aide de camp and
accountant for a legion; followed by aedile, in charge of religious observances and festivals.
The next rung higher was "praetor," similar to a colonel or brigadier general in an army, who
also acted as a "president pro tempore" when the highest officials were absent. Finally, the
highest office was "consul," of which two were chosen every year, as co-chief executives, lead
prosecutors, and commanders-in-chief of the legions. Upon completion of their terms, consuls
joined the Senate.
Another important office was that of the 10 Tribunes. These were explicitly open only to
plebeians, and were designed to protect their interests. Each of the 10 Tribunes could propose
legislation before the Assemblies, and veto legislation proposed by others. Further, none of
the other Tribunes could override the veto of any single one. As we'l see, this chokepoint
proved a weakness in the structure of the Republic. Additionally, there were also "military
tribunes" in the legions, who represented the interests of the soldiers.
Finally, in case of emergency the Republic allowed for the office of "dictator." Most
importantly, for the first 400 years of its use, this office had a strict 6 month time limit,
which was faithfully respected. At the conclusion of the 6 months, the dictator was required to
hand back power to the normal offices, and the status quo ante structure of government was to
resume. The most famous of these was Cincannatus, who returned to his farm after his six month
office expired.
So powerful was the civic pride in the Republic that, when the Macedonian Pyrrhus (of
"Pyrrhic victory" fame) tried to bribe a relatively poor Roman general, Fabricius, Fabricius
refused by rejoining that the Roman Republic provided those who went into public service with
higher honors than mere wealth could supply. In any event, by 300 B.C. Rome had brought all of
Italy except for the far north under its domination. The other Italian city-states were called
"allies," but really they were tributaries, their form of tribute being the provision of
soldiers to fight in Rome's legions. Upon reaching adulthood, Roman males owed 10 years service
in the legions. Importantly, the pattern was the planting of crops in the early spring, then
going off to fight in the legions' campaigns during the summers, and returning to harvest the
crops in late autumn.
In any event, the accounts agree that matters began to change after 146 BC , when
Rome simultaneously was victorious over Carthage and also Corinth in Greece. Both treatments of
the Republic pick up at that historical turning point. Little known fact: Carthage was also a
democracy, in fact the Romans considered it "too" democratic. Someone go tell Tom Friedman that
two countries having democratic institutions does not mean that they all go happily ever after
to McDonald's.
But it was with the conquest of Carthage, that by happenstance coincided with the sacking of
Corinth in Greece, also by Rome, that the scrappy little Roman Republic, which was founded
roughly in 500 B.C., and had grown to the dominant power in Italy such that the other city
states on the peninsula were its inferior "allies," simultaneously turned into an empire,
dominating the Mediterranean from Spain to Greece on the European side and present day Algeria
and Tunisia on the African side.
The inhabitants of those unfortunate cities who weren't slaughtered were sold into slavery,
and the treasuries of each were sacked, the riches transported to Rome. Rome also thereby came
into possession of extensive silver mines located in Carthage's lands of present-day Spain. In
short, overnight Rome became filthy rich as well as controlling an empire in the central and
western Mediterranean.
But this very wealth permanently upset the balance between the landowning oligarchs in the
Senate vs. the ordinary urban plebeians and rural farmers. For it was the Senate that had the
power of the purse, and thus the power to distribute the land, gold, silver, jewels, slaves,
and other loot plundered from the vanquished states, as well as the new precious ores mined in
Spain. And, unsurprisingly, they allocated it to themselves. Even worse, because the wars in
North Africa, Greece, and Spain lasted years, the legionnaire farmers spent multiple years away
from their fields. When they returned home, they were victors, but their farms had fallen into
ruinous disrepair. For all intents and purposes, they had to sell -- and the buyers who had
money were frequently none other than the wealthy Senators.
A second form of gross inequality was between Roman citizens and their Italian allies.
Because while the allies were vital to Rome's military success, the allies could be treated as
slaves if the Romans wished to do so.
A final form of inequality affected the affluent or wealthy merchant class, called variously
Knights or Equestrians, because they could afford to own horses, and thus serve as cavalrymen
during military campaigns, depending on the account. But because they were not "old money,"
their path to the top rungs of power was blocked by the oligarchs who controlled the
Senate.
The huge inequalities just described gave rise to seething resentment by both the urban and
rural plebeians as well as the Italian allies and the Equestrian class as well. The essential
story of the Roman Republic between 146 BC and its fall a century later was the refusal of the
oligarchs who usually controlled the Senate to make any significant compromises to this state
of affairs, and the increasing violence used both by the opposing classes to wrench change, and
the oligarchs to resist it.
Me: Oh, dear. This isn't "wrong" factually, but it misses the essence of Rome, inborn
class war of creditors vs debtors.
The Republic was never remotely a democracy. It was always run by the autocratic Senate. The
wealthiest 10% controlled the majority of votes which – like the DNC today – was
weighted by wealth categories. 90% of the population's votes counted for just 10%. Leaders
proposing more democratic economic policies were murdered, century after century.
Assassination was a normal tool of the oligarchy.
Rome under the kings was stable. It was the America of its day, attracting immigrants with
their wealth, followers and slaves. They were traditionally non-Roman – Sabine (Numa),
Latin, or from Veii (probably Servius), and although chosen by the Senate, they kept the
oligarchy from waging the class war that ensued under the Republic. In 504 Appius Claudius
brought his wealth and 5,000 men from Sabine territory and was admitted to the Senate. His
namesakes throughout Roman history were intransigent opponents of democracy, triggering
Secession of the Plebs (494 and 450) and subsequent confrontations. They were sort of like
the post-Batista Cubans fleeing to Florida and becoming ultra right-wingers.
Fast forward to the Punic Wars. Toynbee wrote a book saying that the aftermath in 201 was
Hannibal's Revenge. The oligarchy gave the rich campagna lands to itself instead of settling
war veterans. Greek and Macedonian slaves stocked the great plantations being assembled. This
led Tiberius Gracchus and his brother to press for limits on public land grabbing. They and
their followers were killed, as were those of Marius (by the prescriptions of Sulla) and of
Catiline.
I'm writing the 2nd volume of my history of debt to review the collapse of antiquity. The
social struggles were all about debt and land redistribution.When Yves finishes posting this series, I may provide a sample chapter.
The UK doesn't claim to be a republic, but does claim to be a democracy (although
technically since the UK's executive is elected and not inherited, it'd be a republic. Sort
of republican monarchy).
Vlade – there is how one is 'organized' and then how one seems to function as to how
one actually functions. Definitions matter at least in knowing A from B.
UK wise if in
Commons MPs are going to say as they having being lately that they must 'act' in the best
interest of blah, blah – note not represent, but 'act in', then I don't know why people
even bother to vote.
With Parliament being Sovereign, they do as they like. As to the US well
Lincoln did what he had to be win the war but that and changes to how Senators got elected,
and the ever present electoral college, if we have a republic I don't know who is being
represented (I do but it's depressing).
Rome, all I have to say is, to me it's amazing how
many emperors got whacked or killed in battle. Not a place I would have wanted to live in.
Yes, I use 'titus' as in Titus.Andronicus.
Assassination only became a common weapon in Roman politics towards the end of the second
century (the murder of Tiberius Gracchus is considered a major turning point). Up to that
point the nobility favored co-optation instead.
Starting in 367 the consulship was open to
plebeian candidates and within a few decades plebeians were able to gain access to every high
office in the Republic. Wealthy plebeians, that is. You needed money and aristocratic
connections to get elected (nobles had extensive followings of clients whose votes they could
deliver).
Plebeians who served in high office were then eligible for membership in the
Senate. Welcome to the club. The newly-ennobled senators could bring their wealth into play,
marrying into old (and sometimes not too wealthy) patrician families.
A familiar story. And
of course our shake-and-bake aristocrats would "forget where they came from" and become
lifelong supporters of the oligarchy.
"And of course our shake-and-bake aristocrats would "forget where they came from" and
become lifelong supporters of the oligarchy." Not just in the US, but the mother country,
too.
The deracinated elite known as the Chipping Norton Set, which also includes its Notting
Hill and Primrose Hill outposts in London, is a mix of aristocracy, vide David Cameron, and
new money (or "nouves" as old money calls them, as per what Alan Clark said about Michael
Heseltine and other Tory MPs), vide Michael Gove and his wife Sarah Vine, currently gunning
for Meghan Markle.
Synoia and I went to schools with both types. At my alma mater, it was interesting to
observe the "nouves" trying so hard to fit in. The (now) peers I knew, four earls, a
viscount, a baron and two baronets, were easy going and had a sense of paternalism, quite
different from Thatcher's children.
Rome wasn't a democracy has been a constant meaningless statement, starting with many of
the US founders, even to the point more recently in Symes book "The Roman Revolution" where
many argue Rome wasn't a "republic"!
Both words, one Greek, one Latin simply define systems
that may best be described as some sort of self-government, where the general populous
– the citizenry – had some sort of direct role in politics and governance,
leadership changed by elections as opposed to monarchies, "oligarchies" and "dictatorships,"
once again mixing Greek and Roman terms.
Democracy in Athens wasn't even democracy as defined by notions in many academics' heads.
After all they had slaves, how could it be a democracy? The Greek assembly wasn't the only
institution of government in Greek democracies, the "demes" were numerous local structures
connected horizontally as much as vertically and more fundamental, along with various
hierarchical tribe elements, wealth factors etc., similarities the Romans shared.
The Senate in Rome ran foreign affairs, the assemblies, whether organized by tribe or
military unit were composed of every citizen and passed legislation and elected officials and
yes the votes were weighted, but that doesn't discount them. The Senate certainly didn't have
authoritarian control. And yes, the history of Rome was constant struggle between the plebs
and patricians, for example the plebs sitting out of battle till the office of Tribune was
instituted, the simplistic claim Rome wasn't "democracy" is to miss the whole 450 year plot
of the republic.
In fact, Machiavelli in his "Discourses on Livy" states this struggle was at
the heart of the dynamism of the Roman republic.
It can also be noted for all our neo-socialists, it was this "class" struggle that formed
the foundation of Marx's thought and where he got the idea of the "proletariat" as a
revolutionary class, though how one could look at the Roman proletariat in the republic's
last half-century as revolutionary is more than a mystery.
In short, to simply throw away the Roman republic as not being democratic is both wrong
and removes from Western history one of the few examples of self-government we have, as
opposed I suppose to some sort of Platonic notion of "democracy" which never existed.
In trying to make up for my ignorance on Rome's history I came across P. A. Brunt's
"Social Conflicts in the Roman Republic." His account of the innovation of the office of the
tribune gave me a good sense of the intensity of those conflicts:
"In 494 a great body of the plebs sat down en masse outside Rome and refused to serve in
the army. Such a 'secession' or strike undoubtedly occurred in 287, and similar revolutionary
action must have been taken now, to account for the concession the patricians were forced to
make: the creation of the tribunate of the plebs. The ten tribunes were plebeians annually
elected by an assembly organized in voting units calle tribes; these were local divisions of
the state, originally four within the city and seventeen in the adjoining countryside. This
assembly was truly democratic at the start, when the tribes were probably more or less equal
in numbers; the rich had no superior voting power.
The original function of the tribunes was to protect humble Romans against oppression by
the magistrates; they did so by literally stepping between them and their intended victims
(intercessio). The magistrates did not dare touch their persons, which were 'sacrosanct';
that meant that the whole plebs were sworn to avenge them by lynching whoever laid hands on
them. But their power was confined to the city; outside the walls, Roman territory was still
too insecure for any restriction to be allowable on the discretion of the magistrates to act
as they thought best for the public safety. This limitation on tribunician power subsisted
throughout the Republic, long after its rationale had disappeared." p.52
In this light, it seems that the obstructionist quality of tribunician power that Yves'
refers to stemmed from the original need to allow plebs to put the kabosh on patrician power
to avoid revolution. Another instance of when peace brought about by a veto power eventually
makes the veto power appear unnecessary.
The limitation on the power of the tribunes in rural areas was relevant to a factor in
Rome's development Brunt places a lot of weight on: the breakdown of plebian farmholding, in
part through loss of land through absence brought about by conscription, but also by
patrician gang violence. In his telling this alienation by dispossession was ongoing to
varying degrees during the Republic.
Carthaginian silver from Spain poisoned Rome as assuredly as South American silver
poisoned Spain. There is a rule operating there which our men of commerce probably don't like
much.
Also of interest is the Social War, 91-88 BC, in which tributary Italian tribes fought,
not for independence but for Roman citizenship. Somewhat analogous to modern civil rights
movements. Interestingly, the Romans won the war but in order to avoid further costly
conflict, acceded to the tribes' demands.
Who are you talking about? Having read, "A. Lincoln: A Biography", by White Jr., Ronald C,
I can tell you it is not a 'chipper' book, assuming I know what that is. It is one of the
most intense books I've ever read – you get to be Lincoln the whole time he was
President, it is white hot painful.
Maybe instead of "chipper" they meant "hagiographic." I am not familiar with that work by
Ronald C. White, but the blurb includes the phrase, "offers a fresh and compelling definition
of Lincoln as a man of integrity."
Many people would say that Lincoln's greatest contribution was getting assassinated,
paving the way for Radical Reconstruction, which he was against. I do not expect a book
making that case to appear in any airport magazine rack.
Maybe a book could be found titled the greatest tragedy, the assassination of Abraham
Lincoln. His death just added anger to the North's desire for payback. There was
simultaneously too harsh and too lenient treatment of the Southern Slaveocracy.
Followed by the abandonment of the Southern governments then under the control of the black
leadership in 1877 with the withdrawal of the army. The country then ignored the very violent
takeover of the South by the waiting white elites causing the undoing much of the conflict
and death of the previous thirty years. A worse of all outcomes except the continuation of
slavery you could say. Although with the new forms of slavery created in the South after
Reconstruction were not technically slavery, they were damn close at times.
"Only true for mass market history, particularly by non professional historians, who have
to be chipper to sell books and/or get MSM attention." As above, we have the same problem in
the mother country. Boris Johnson, Jacob Rees-Mogg and Jeremy Paxman write for a certain
audience and are often serialised in the Daily Mail and given air time on state broadcasters
like the BBC and Channel 4. The trio have been joined by once serious historians Simon Schama
and David Cannadine. It would be difficult for an EP Thompson or Eric Hobsbawm, whose
daughter is a staunch Blairite, just like the children and grandchildren of Wedgie Benn, to
get published or air time now.
The gap between academic British history and the propaganda peddled by the likes of
British state media organ bbc.com (let alone Boris Johnson) is astounding. Just one example:
I once forced myself to read a bbc.com article that explained how Britain's primary role in
the history of slavery was to end it, and have encountered that unique version of history in
a few other British mass-media productions.
And did you know that in London there is an actual place called the Imperial War Museum,
and it is not some kind of collection of Marxist diatribes and Global South protests, it is a
state-funded temple of reverence for Britain's wars (and admittedly some solid academic
history)?
It is as if an entire country were naked and they were the only ones who didn't know it or
else thought they were hiding it.
We have had that problem in UK all my life. State historians have conspired to create a
clean and uplifting version of British history, over the last 200-300 years, and it is only
now that we Poms are beginning to get our real history, courtesy of Andrew Roberts (on
Napoleon) and David Starkey (on most everything else).
One hopes that academics are respectable people. Can they look in the mirror and recognise
the problem?
I am afraid that Newdealdemocrat's views on Republican Rome do have to be heavily
qualified. And I won't mention that the British Empire and the Republic of Venice were
actually oligarchies. Wait – I just did!
Anyway, when he gets to the part about the Punic Wars he tends to mash the events of the
different wars together. The Romans were not the same people that they were at the beginning
of these wars. The social conditions and mores had changed too much. A serious use of a
timeline is needed so a bit of context here. The three Punic wars were epic on scale and
amounted to world wars at the time. In the second war, Rome went right to the brink and was
nearly snuffed out but managed to hold the line. When the British were fighting the French
during the Napoleonic wars, a lot of British were equating their struggles to the 2nd Punic
War. Here is how it went.
During the first Rome and Carthage went at it for over twenty years until it finally ended.
After a break of twenty years, the went at it again for another seventeen years. After that
war was over, you had peace for about fifty years until the last war which only lasted three
years and after hard fighting, Carthage was no more. And no, it was not really a Republic at
all. So all in all these three wars were spread over nearly 120 years. So lets equate that
with a history of the United States.
Suppose that the US were fighting a country going from the Spanish-American war until the end
of WW1. Then they fought this enemy again from WW2 to near the beginning of the Vietnam war.
The final war would have broken out a few years ago and just finished. So using this idea,
would Newdealdemocrat argue that the Americans of the 1890s were like the Americans of the
1940s & 1950s who would be like modern Americans? Too much water has passed under the
bridge and so it was with the Romans. And certainly you cannot mix up events from these
different American eras without a serious misrepresentation of history.
Re Venice – a republic can be an oligarchy – the point is that the executive
is elected (from some body), not inherited.
From that point, Venice wasn't a republic until about 1000AD, when the Concia started to
form (of all free men). Before that it was appointment from Byzantium. The democratic attempt
changed to oligarchic in about 1300. As a republic it was still pretty stable due to the
extremely convoluted (on purpose) sortition election mechanism, which was making it pretty
hard to impossible to rig future Doges w/o very large consensus in the electorate.
Granted that a republic can be an oligarchy and a good example was East Germany which was
called the German Democratic Republic. I am here to say though that I spent a few hours in
that place and it definitely did not feel like a democratic republic. A few months ago I read
a history of the Republic of Venice and from what I read, it had the same feel as East
Germany once did with its strict controls and ruthlessness.
Indeed (and most of the Soviet-block countries were republics and 'people's republic' and
'democratic', when they were none of these. DPRK is a prime example none. Not democratic, not
peoples' not republic, and partially Korea).
I just want to be reasonably precise, as lots of people assume that democracy and republic
are equal. I don't know whether the author was making that assumption too, or was looking at
republic in the wider sense.
The US can be a republic and not being democratic at all .
vlade and Rev Kev: The Serenissima is fascinating, and it is hard to draw lessons because
it was a highly contradictory place. Venetian justice was supposed to have been relentless
and severe–yet histories tend to clump the repression. Over the long span of time,
Venice wasn't such a bad place to live, and the Republic had a reputation for being more just
than any of the surrounding states. (Although I just peeked at the list of doges, and it was
hard to be a doge in the 900s or so.)
The Republic was highly skeptical of the Inquisition and kept it under control. Compared
other Catholic–and Protestant–states, the Venetians didn't allow the mass panic
and miscarriages of justice that the Inquisition was famous for.
What the Venetians were good at was a kind of civic esprit de corps–all Venetians
seem to have been committeed to the city. There was considerable openness–Venice was a
center for book publishing for centuries. Of course, those in charge of the Republic kept the
university in Padua. On the other hand, Galileo taught at Padua, without incident. Marin
Falier and his attempted coup were a notable exception, which is why history books dwell on
those events.
Venetians loved minutiae, which may be their odd distinguishing characteristic. They saved
everything, in their enormous archives–every record, every blunder, every victory. They
made officials obtain a countersignature–that skepticism, slight lack of trust, was
everywhere.
And what may make them the most exceptional was their island empire: They rule the Ionian
islands in Greece pretty much to the end of the Serenissima. Yet they weren't insular. There
was a reluctant tolerance–the Ghetto in the city itself, the Armenian monasteries in
the lagoon, the large populations of Greek Orthodox on Crete and Cyprus whom they did not
bother much.
Much to contemplate here: But most USonians consider Venice these days to be a shopping
mall. It is hard to find decent books in English on the complicated history of Venice.
I'm not sure it's exactly clear how their government compares to modern types. The best
place to look is Polybius, who was alive during the final Punic war. Here's what he has to
say –
51 1 The constitution of Carthage seems to me to have been originally well contrived as
regards its most distinctive points. 2 For there were kings, and the house of Elders was an
aristocratical force, and the people were supreme in matters proper to them, the entire
frame of the state much resembling that of Rome and Sparta. 3 But at the time when they
entered on the Hannibalic War, the Carthaginian constitution had degenerated, and that of
Rome was better. 4 For as every body or state or action has its natural periods first of
growth, then of prime, and finally of decay, and as everything in them is at its best when
they are in their prime, it was for this reason that the difference between the two states
manifested itself at this time. 5 For by as much as the power and prosperity of Carthage
had been earlier than that of Rome, by so much had Carthage already begun to decline; while
Rome was exactly at her prime, as far as at least as her system of government was
concerned. 6 Consequently the multitude at Carthage had already acquired the chief voice in
deliberations; while at Rome the senate still retained this; 7 and hence, as in one case
the masses deliberated and in the other the most eminent men, the Roman decisions on public
affairs were superior, 8 so that although they met with complete disaster, they were
finally by the wisdom of their counsels victorious over the Carthaginians in the war.
Worth reading the beginning of book 6 too where he compares the different types of
governments and how they evolve, or more likely, devolve. Here he seems to be making that
case that whatever form of republic or democracy the Carthiginians once had, it had devolved
to mob rule by the time of the Punic wars.
I'd like to wait for the entire series before commenting too much, but based upon my
readings on the subject, the connection between oversees military operations and the
disposition of the farmers is incredibly important. It seems to underlie many of the
subsequent problems that contributed to the Fall of the Republic. Without the farmers being
forced off their lands after fighting wars in Africa, Greece, and Spain, they would not have
become reliant upon generals for patronage nor joined the poor masses in Rome itself.
Describing Britain as a "parliamentary democracy" for the past 400 years seems a little
far-fetched. "Constitutional monarchy" would be more accurate, with the monarch sharing power
with Parliament. Parliament itself was a highly elitist affair, dominated by the "landed
classes" (aristocracy & gentry) and chosen by a tiny and well-managed electorate. In
addition, monarchs retained a great deal of power over the choice of ministers. This state of
affairs lasted well into the 19th century. The young Queen Victoria was the very last monarch
to attempt (unsuccessfully) to keep a Prime Minister in office without parliamentary
approval. And democracy (defined as universal suffrage or something close to it) had to wait
until the Reform Bills of 1867 and 1884. By the time a parliamentary democracy exists the
Empire has become a well-established fact.
I believe it was the Irishman Castlereagh who almost single-handedly brought down the
monarchy because of the unparliamentary George III, specifically the attempted seizure of
South America. Once that powerful and knowledgeable King was pushed aside, the next couple of
clowns were dog's meat to politicians determined to center power on the Commons. The MO was
to give a bit and take a lot and thus whittle down the Civil List to a point no future
British monarch had independent power.
I think that the writer misunderstands Roman offices. An aedile was more of an inspector
of public works. The word edile / edilizia is still used in Italian for building /
construction.
The college of pontifexes were the ones in charge of festivals and religious events. And
there were complicated qualifications for membership (involving social class) as well as
complicated rules of behavior expected of these priesthoods.
The de facto requirement that all senior magistrates and in particular the consuls
(analogous to Presidents) be military commanders, who frequently raised, and increasingly
paid for, their own armies.
-- -
We can look to Marius for that.
From Wikipedia*:
Marius and his contemporaries' need for soldiers cemented a paradigmatic shift away from
the levy-based armies of the middle Republic towards open recruitment. Thereafter, Rome's
legions would largely consist of poor citizens (the "capite censi" or "head count") whose
future after service could only be assured if their general could bring about land
distribution and pay on their behalf. In the broad sweep of history, this reliance on poor
men would make soldiers strongly loyal not to the Senate and people of Rome, but to their
generals whom would be perceived as friends, comrades, benefactors, and patrons of
soldiers.[57]
*We can find this subject, Marius military reform, covered in many places, some not as
readily quotable as Wikipedia, which is cited here as an introduction to those who are not
already familiar with. People who want more details can do further research, and those who
object to part or parts of the above can raise them here for readers to discuss/debate or to
correct/update.
Well even the billionaires are panicked now. Whereas traditional oligarchs have sewn their
diamonds in their petticoats and still been massacred. That's very symbolic. Talk about blood
diamonds. It's possible that we are facing the end of an era. To go forward now we can no
longer take from the environment frivolously, beyond our needs. And we will be required by
Nature to leave the world better than we found it. In my mind that leaves all dysfunctional
governments looking pretty stupid.
I recommend Colleen McCullough's First Man in Rome and the subsequent books. It's
historical fiction but is heavily based upon the original sources and provides an
entertaining way to study the fall of the Roman Republic.
The post briefly touches upon it but the rise of the commercial class played directly into
Plato's cycle of governments. The landed aristocracy (Senate) became threatened by the
commercial class (Assembly). This will explode when Marius and Sulla go to war with each
other as the Assembly took away Sulla's rightful command and gave it to Marius.
Of course, back then, losing in politics increasingly became a case of losing your head,
citizenship, or all property. A strong motivation to stay in power regardless of the
cost.
This ought to be an interesting series! I am hoping Newdealdemocrat doesn't just
regurgitate the books he/she mentions but gives us some critical insight of his/her own.
Obviously the Roman Republic is important to Americans since the Founding Fathers were
enamored of Polybius's writings, but it sad they weren't equally interested in understanding
the reasons the Roman Republic collapsed; they might have put more protections into our
Constitution. But in fairness to them, perhaps there just wasn't that much literature on the
subject of the Roman Republic's collapse at that time since it seem that writers previous to
1776 were more interested in the collapse of the Roman Empire than in the Roman Republic.
The collapse of the Roman Republic was very complex and cannot be simplified down into
just one thing or one set of things so I tend to discount those writers who do that. And
every historian that has written about the Roman Republic/Empire's collapses is ethnocentric
and weights history based on what is important to him/her and I don't expect this writer to
be any different. Since I don't know how a writer can avoid understanding history in terms of
his/her own culture instead of the culture that existed at the time, I usually try to find
out who the writer is and what is important to him/her and then I read his/her history within
that context. Since I don't know anything about this writer, I am inclined to withhold
judgement on the validity for now. But even those writers on the Roman Republic who were
obviously biased have provided valuable insights. I am hoping for at least that and maybe
more from this writer.
As the 2nd millennium passes into the 3rd I believe it grows plain our Empire is crumbling
and I fear its last days will come in my lifetime. Empires have ended before – but this
time is different. This end will be far more complete, further reaching, and perhaps more
final than any collapse which occurred in the past. This collapse will signal the end of
Empire but also the end of the Age of Fossil Fuels. And the scale of our collapse will dwarf
the scale of all the collapses of the past. It is strange and eerie to live through last days
– strange days watching the emergence of signs of collapse.
Our civilization is built on the power we obtain from burning fossil fuels. But fossil
fuels are finite. We extracted and burned them at such a rate as now seems unimaginable. They
were a legacy of energy and chemicals such as might have nurtured Humankind for many
millennia. We wastefully burned-up this legacy in less than a century. And now our bright
candle's wick burns close to the pan as we burn what remains of our fossil fuel legacy. If
Humankind's capacity to replace fossil fuels relies upon the use of fossil fuels to discover
and build that replacement – our bridge to the future – I fear we have so
completely burned that bridge and all the bridges behind us. Our collapse will come before we
see full scope of the wonders Climate Chaos holds in promise. Not only have we burned our
bridges, we have so changed our world that our survivors will face constantly changing and
difficult adaptations for many millennia to come.
If only the collapse of our Empire were more like the collapse of Rome or the other
Empires mentioned.
Many thanks to Yves for this post and to the commentariat for their excellent
contributions. Another trip to the library is in order; as often happens, I am made aware of
huge gaps in my knowledge.
I think he is a little harsh on Mike Duncan's "The Storm Before the Storm."
"Unfortunately this latter book (in my opinion) wound up being a chronological
blow-by-blow vomiting of not well organized facts."
There are many ways to tell the story of history, and there is not such thing as an
unbiased, factual account, given the intellectual and ideological biases of any given author,
and the necessary basis in available sources that are in themselves biased to begin with.
That being said, Mike Duncan's book (which I just finished) tries to give a chronological
account of "what happened", and (in my opinion) does so in a clear and coherent fashion,
allowing the reader to draw their own conclusions and interpretation. I wouldn't want people
to avoid the book due to one person's opinion. I agree though that it's helpful to read as
many different takes on a given historical topic as one has the time and inclination for, as
there is no one "correct" or "best" interpretation.
If you like podcasts, "Death Throes of the Republic", by Dan Carlin, covers the same
territory in Carlin's highly engaging and addictive style.
Duncan's book is derived from his podcast of the same name. I haven't listened (I'm an "I,
Claudius" guy) but his "Revolutions" podcast is very very good.
It might be that his Rome podcast works better than his book.
As my mite to the discussion I'd like to recommend as a valuable contribution to the
history of the fall of the Republic Gareth Sampson's The Collapse of Rome. Marius, Sulla,
and the First Civil War (91-70 BC) , Barnsley, South Yorkshire, Pen & Sword Military,
2013, 284 pp. Sampson's thesis is, as has been already pointed out, that the Republic was
inalterably changed by the Social War and Sulla's assault on Rome when he returned from the
East.
Being a neoconservative should receive at least as much vitriolic societal rejection as being a Ku Klux Klan member or a child
molester, but neocon pundits are routinely invited on mainstream television outlets to share their depraved perspectives.
Notable quotes:
"... Some of the "virtual facts:" ..."
"... The Soviet Union never ended. Russia is still communist and an inevitable and indeed indispensable enemy of the US. Anyone who challenges that certitude is an obvious agent of the Russian government. ..."
"... Iran is the "greatest supporter of terrorism" in the world." ..."
"... The Syrian Arab Government is an abomination on the scale of Nazi Germany and must be destroyed and replaced by God knows what . ..."
"... Saudi Arabia is a deeply friendly state and ally of the US. ..."
"... It is beyond scary to see just how entrenched and powerful Deep State is and how it involves/controls both political parties ..."
"... I doubt there is any magic bullet website or other source of information that would turn people over night. A good start would be encouraging them to read transcripts of various Putin and Lavrov speeches and pressers, also Valdai Club, economic forum ect. ..."
"... The colonel's complaint implicitly assumes that things were not always thus. My adult experience since I saw a war up close has been that the "facts" of our public discourse are always simplified and usually grossly distorted. ..."
"... Not only are the MSM married to a narrative but they feel compelled to attack the few who ever challenge the orthodoxy. For example, 'Tulsi Gabbard met with the war criminal Assad'. ..."
"... It is certainly true that Russia is being demonized in all the MSM I have sampled. A frequent criticism is that Putin, like Assad, and earlier Saddam and Quadaffi, is essentially an illegitimate ruler of his country, ruling through brute force and without the consent of his countrymen. (Thus the WaPo editorials routinely call Putin a "thug", just as they call Assad a "butcher".) ..."
"... Not to defend Trump and his balance sheet mindset with respect to the Saudis, the reality is that both parties and presidents from George H.W to Bill Clinton to W and Obama have treated the Saudi monarchy as our "friend", even when they sponsored the terrorists that attacked us on 9/11. ..."
"... Tony Blair became a wealthy man after his prime ministership on the back of money thrown his way by the Arab sheikhs ..."
Mika B remarked a couple of years ago on the show that she and her sex slave stage in the
early morning that the social media were out of control because it is the job of the MSM to
tell people what to think. The Hillary stated recently that life was better when there were
only three TeeVee news outlets because it was easier to keep things under control. Now? My God!
Any damned fool can propagate unauthorized "facts." What? Who?
Well, pilgrims, the US government (along with our British and Israeli helpmates and masters)
are the preeminent creators and purveyors of the manufactured virtual facts on which we base
our policy. These "facts" are "ginned up" in the well moneyed hidden staff groups of "hidden"
candidates that are devoted to the seizure of power made possible by a deluded electorate.
These "facts" are then propagated and reinforced through relentless IO campaigns run by
executive "bots" in the MSM and in such remarkable and imaginative efforts as the "White
Helmets" film company manned by jihadis and managed by clubby Brits left over from the Days of
The Raj (sob). These "facts" are now so entrenched in the general mind that they can be used to
denounce people like Rep. (major ) Gabbard as traitors because they challenge them.
Some of the "virtual facts:"
The Soviet Union never ended. Russia is still communist and an inevitable and indeed
indispensable enemy of the US. Anyone who challenges that certitude is an obvious agent of
the Russian government.
Iran is the "greatest supporter of terrorism" in the world." Iran is so designated by the
State Department on the annual list of terrorism supporting states which asserts this to be
true on the basis of Iranian support of Lebanese Hizbullah and Palestinian Hamas, calling
them "terrorist" groups rather than anti -Israeli nationalist resistance organizations. This
Zionist inspired propaganda is spread far and wide by neocon "useful idiots" like Maria
Bartiromo and Jesse Watters.
The Syrian Arab Government is an abomination on the scale of Nazi Germany and must be
destroyed and replaced by God knows what ... "They gassed their own people!" Bullshit! There
is no objective evidence for that. There are nothing but propaganda statements by the FUKUS
governments unsupported by any real evidence. The MI-6 funded (with USAID money) Syrian
Observatory for Human Rights (located in a basement in England) as well as the White Helmets
murder/propaganda operation states that the SAG is guilty as charged but independent
investigation says that assertions of SAG guilt are untrue.
Saudi Arabia is a deeply friendly state and ally of the US. How mad an idea is this! This
theocratic, absolute monarchy is a friend of the US? How insane an idea! Trump has a balance
sheet where a soul should be and that is the basis for the belief that MBS and/or his
"country" are our friends. pl
Yes I fully concur. We have gone from fact-based news to faith-based fake news led by the
MSM. I recall at the start of the Iraq War in March 2003, the line was out that British PM
Tony Blair was George W. Bush's "poodle," forgetting entirely that it was the first of the
British "dodgy dossiers" that made the totally discredited claim that Saddam had gotten tons
of yellow cake from Niger. So the British have no military resources but they continue to
maintain the idea that they can manipulate the U.S. and make up for the demise of the old
British empire.
The Steele dossier was the second British "dodgy dossier" that got the ball rolling on
Trump the Russian mole and Putin's "poodle."
So much fraud. But now social media must be patrolled and anyone daring to challenge the
voice of the MSM must be purged by Google, Facebook, Twitter et al.
My question is: When will the machinations of the Big Lie MSM Wurlitzer cross the line and
trigger the backlash that they secretly fear so much? MSM has to destroy Trump by 2020 or
else his "fake news" polemic will stick... because there is no much truth to it. The
messenger may be crude, but he has the bully pulpit to have a real impact.
I await the release, as Larry Johnson pointed out, of the Horowitz IG report on the
origins of the fake Trump-Russia collusion line. Also the pending Barr-Durham larger report
which is zeroing in on John Brennan.
"MSM has to destroy Trump by 2020 or else..."
The MSM are joined by all those folks who were wined, dined, and degraded by Jeffrey Epstein
and Hollywood hero Harvey Weinstein. Nobody seems to care about who Jeffrey abused, or who
enjoyed his island paradise. Harvey, he's about to buy a free ride out of jail. Meanwhile we
jail idiots who "bribe" there kids way into that "elite" institution - UCLA.
an ideal study would no doubt want to look into the Italy-GB-US angle already concerning
the "first dossier", or whatevers. Didn*t that have mediawise an intermediate French
angle?
This is what happens when the deciders believe their own propaganda. The media now says
that a residual force of American troops and contractors will stay behind at the Deir ez-Zor
oil fields and Al-Tanf base near the Jordon border. The media moguls dare not mention that
the real intention is to prevent the Syrian Arab Army from retaking its own territory or that
Turkey is seizing thousands of square miles of Syria. Syrians with Russia, Chinese and
Iranian aid won't quit until Syria is whole again and rebuilt. This means that America
continues its uninvited unwinnable war in the middle of nowhere with no allies for no reason
at all except to do Israel's bidding and to make money for military contractors. The swamp's
regime change campaign failed. The Houthis' Aramco attack shows that the gulf oil supply is
at risk and can be shut down at will. Continuing these endless wars that are clearly against
the best interests of the American people is insane.
It strikes me, as a matter of observable fact, that the Houthi attack had almost no long run
affect on oil production. Everything was back to normal within 10 days. I think that the
attack was allowed to occur for exactly one reason and that was to start a shooting war
between the USA as KSA's great defender and Iran as the horrible nation that has a mild
dislike for Israel.
It failed. So far.
To believe that the 24/7/52 AWACS, Ground radar, Israeli radar, and the overlapping close in
radar coverage of the Saudi oil fields all failed to detect the drones and cruise missiles is
to believe in more miracles than I can handle on a good day. It also means that assets in
other parts of this world covered by these same type of radars are just as vulnerable to
local disaffected groups.
The FUKUS thinks we are all a bunch of brainless sheep to be led by a ring in our noses. The
'Muktar' is clueless regarding our Saudi brethren, he's supposed to administer how the
overlords say he's to administer, nothing more. The CIA administration still has a hard-on
because they blew it regarding Iran and they're still embarrassed about it.
In two days, counting closer to a day and a half will be the sad anniversary (October 23)
where the Israeli government willfully with forethought let our Marines and other service
personnel bunked with them at the barracks in Beirut die needlessly, because Nahum Admoni
wanted U.S. to get our noses bloodied.
Never mind that the Russians lost close to 30 million to the brotherhood of the Operation
Paper Clip, and the Bormann Group that today controls from behind the scenes most of the
World's money thanks to Martin creating over 750 corporations initially to start with, that
has expanded like a Hydra. Any time that truth (Russia is no longer Communist) rears its ugly
head, the Bormann group goes into overdrive to ensure that the big lie perpetuates.
The FUKUS think we're all a bunch of sheep to be led off a cliff, and the propaganda mills
have created the trail right up to the edge of the precipice that the sheep are trotting.
Amen. The landslide of disinformation and bullshit disseminated on a daily basis by a pliant
media is happily lapped up by ignorant, uninformed Americans. I've had quite an exchange with
a liberal friend of mine who was shrieking MSNBC talking points on Syria and the Kurds. Mind
you, this fellow never served a day in the military. Never held a clearance in his life.
Didn't know a thing about JOPES and how Special Ops forces use a series of written orders
signed off on by the CJCS. Yet, he was qualified to criticize Trump. At the same time not one
of his kids or grandkids are signed up to fight on that frontline. I told him politely to
STFU and get educated before trying to comment on something he knows nothing about.
Thanks Colonel.
I am British and did consider the military in my youth but if I were that age now I would
not. Having seen what my political master, and yours, have asked the military to do the
danger of being sent on some counter product regime change mission or to prop-up someone I
would rather fight is just too great. I would only end up refusing to follow orders which I
understand the military takes a rather dim view of.
... regime change mission or to prop-up someone I would rather fight is just too
great.
once upon a time, and strictly I had opted not to believe either side before that, but
yes, at one point I wondered fully aware they may be legitimate complaints, how would the
UCK, or the Kosovo Liberation Army become the "Western" partner in war.
In hindsight I was made aware of this one grandiose British officer ... once upon a
time.
"if I were that age now..." That is the same line used by the American left since the
'60s.
"I would only end up refusing to follow orders..."
Samantha Power at the UN and James Comey at the FBI both had a "higher loyalty" than to the
elected government or the Constitution on which it is based. That's why they are busy trying
to subvert it.
There's a lot of truth there, Colonel. Life would be better with just three TV new outlets,
huh. Which three? Can you imagine being limited to three cable new outlets? Actually most
people probably limit themselves to three news outlets or less. They find an echo chamber and
stick with it. I thank God I don't have cable or satellite TV and I have too many interests
to engage with talk radio.
I couldn't agree more with your characterization of "virtual facts" about Iran, Syria and
Saudi Arabia. I also agree that those who continue to view Russia as an implacable enemy bent
on our destruction and world domination are liars and/or fools. The Soviet Union was just a
phase, a phase now past. Russia never ended. Conversely, those who insist that Russia is a
newly minted nation of glitter farting unicorns incapable of nefarious behavior are also
fools and/or liars. Russia is a formidable competitor, fully capable and willing to take
prudent actions in pursuit of her interests. We should respect her and seek cooperation where
we can and tolerance where we must.
How the never-Trumpers treat Tulsi Gabbard is shameful. What Clinton recently said is mild
compared to what others have been saying for quite some time. Calling Tulsi a Russian asset
is foolishly wrong. That Russia may prefer Tulsi over other potential Presidential candidates
should be seen as a positive thing. A policy of mutual respect, cooperation and tolerance
between our two countries would benefit the entire world.
America needed to restore the Kuwait monarchy for freedom and democracy. Remember defense
Secretary Dick Cheney sending captured Iraq arms to the Taliban.
Same play book was used to run Libyan arms through Bengazi to Wahhabism freedom fighter
"ISIS" and the al Lindsey McCain head choppers.
The nonsense will end since not even the United States can endure these costs. Did you hear
Trump? 8 trillion yankee dollars and nothing to show for it.
What is highly alarming, almost terrifying, is that really well educated people who have
achieved great things in their careers and are pillars of society believe this crap.
I had dinner guests last week; a former Chairman of a bank and his wife who is a highly
acclaimed Professor of public Health and Epidemiology who told me how awful Trump and Putin
are neither of these friends are what you could remotely classify as Social Justice
leftists.
My problem is that I don't know where to start to try and put them right without them
thinking I'm a tinfoil hatted conspiracy nut. I wish there was a website dedicated solely to
purveying basic truthful information that is not perhaps as esoteric as SST. Should I try and
start one or are there already good examples to point to?
I'm thinking this is so far and so deep there is nothing that can or will be done. Trump's
election and presidency has lifted the curtain on the puppet show. This recent Syria troop
removal is Trump's second attempt at openly declaring troops will be pulled out of Syria only
to have the military has said, "Um, no, we will stay and simply relocate."
Trump openly
called for FISA warrants to be declassified only to have the DOJ and FBI either ignore and
defy him. Groups like Judicial Watch and others go into court to get the requested
information through FOIA and DOJ and FBI lawyers and the courts block them.
It is beyond
scary to see just how entrenched and powerful Deep State is and how it involves/controls both
political parties. Trump has faced hurricane winds of opposition from day one and has been
constantly subverted by his own party and his own people. I don't know how he can get up
every day and continue to fight the obvious and concerted Deep State coup against him. I pray
for him. I pray the rosary for him.
There are members within Trump's own party who have agreed that there should be an
investigation into the impeachment of Trump for running a yellow light (at most). Again,
members of his own party. Renowned Constitutional lawyers John Yoo and Alan Dershowitz, from
Cal-Berkeley and Harvard laws schools respectively, have said that not only has Trump done
nothing, even remotely, which could trigger an impeachment inquiry but if Congress were to do
so it would be unconstitutional and illegal. But alas, who would enforce this? Deep State
snakes like John Roberts at the Supreme Court? Robert has already signed off on the coup (
https://slate.com/news-and-politics/2019/10/john-roberts-mitch-mcconnell-trump-impeachment-trial.amp).
The only thing that separates America from falling into the abyss is Trump, a handful of
people in Washington, a few conservative talk show hosts, and about 40% of America. Many
people have talked a good game at points but I think in the end are just double agents of the
dark side/Deep State (Lindsey Graham, Mitch McConnell, ... IG Horowitz, etc.). And some, such
as Chris Wray, are unabashed dark side/Deep State agents in good standing.
As St. Thomas More said, "The times are never so bad that a good man cannot live in them."
I have faith in Barr. I have faith in Durham. Two men whose Catholic faith is integral to
every aspect of their lives and work. But with as pervasive, entrenched, and powerful as the
Deep State is I'm skeptical they have the power to do anything. Btw, here's U.S. Attorney
John Durham's lecture before the Thomistic Institute at Yale (hosted by the Dominican Order):
https://soundcloud.com/thomisticinstitute/perspective-of-a-catholic-prosecutor-honorable-john-durham
One thing that really amuses me is that the marionettes of Deep State in the media and
politics actually believe that once Trump is gone their puppet show theatre can resume like
nothing happened. Sorry, but there is no coming back from this. They will be lucky if the
worst thing that happens is a sizable part of of the American populace protests by throwing
sand in the gears. I'm afraid it will end much worse.
I doubt there is any magic bullet website or other source of information that would turn
people over night. A good start would be encouraging them to read transcripts of various
Putin and Lavrov speeches and pressers, also Valdai Club, economic forum ect.
Most only get to see the odd sentence or paragragh in western MSM with an entirely
fictional story built around it, so perhaps and MSM piece like that and the transcript of the
relevant presser or speech alongside it.
I suspect the fine detail in Putin and Lavrov's replies to press questions
rather than cliches would surprise many people.
Walrus--100% my experience as well. Many dinners with "liberal" even "progressive" friends,
mostly of the retired kind require great psychic energy. Their Overton Window is 1"-square,
making exchanges very difficult to squeeze even minimal bits of political reality.
My daily
blog tour, like MW's above, takes me through: Moon of Alabama, Naked Capitalism, SST, Caitlin
Johnstone, Grayzone and a few others. I'm intel gathering -- but I need to figure out how to
convey broader perspectives even to my 40-45 year-old children and their friends. Inside the
Beltway assumptions are hard to de-program.
While I agree with the essence of the post I disagree with the characterization of SOHR. It
tends to get its stuff right. I have listed several significant events where SOHR disagreed
with the official narrative: On Sources And Information - The Syrian
Observatory For Human Rights . Those are exactly the moments where SOHR is disregarded by
the pressitude.
It is the selective quoting of such sources that paint them as partisan even as they try
to stay somewhat neutral.
---
@Pat - Any comment to the Gen. McRaven op-ed in the NYT? Our Republic
Is Under Attack From the President If President Trump doesn't demonstrate the leadership that America needs, then it is time
for a new person in the Oval Office.
Isn't it a call to mutiny? It seems to me to be far beyond the allowed political comment
from a retired General.
Those that look up the pole, all they see is assholes. Those that look down all they see is
assholes, but those that look straight ahead, they see which path to take.
The colonel's complaint implicitly assumes that things were not always thus. My adult
experience since I saw a war up close has been that the "facts" of our public discourse are
always simplified and usually grossly distorted.
Is the Iranian regime terrible? Well, yes,
but it is also a regime that holds real elections and often loses them. Not in the same
league of awful with Nazi Germany or the Soviet Union.
Similarly with the other examples. The
"facts" have in each case a basis in truth but do not by themselves give a true picture. Is
our discourse more unfair to Russia than it was to Nasser's Egypt? Is our promotion of Saudi
Arabia any worse than our adulation of Chiang Kai-shek?
Not only are the MSM married to a narrative but they feel compelled to attack the few who
ever challenge the orthodoxy. For example, 'Tulsi Gabbard met with the war criminal Assad'.
It would do our vaunted free press wonders if they traveled to Damascus instead of
repeating the same tired talking points about Syria. I'll never forget the look on Gabbard's
face when she talked about the Syrians came up to her and said, 'why are you attacking us,
what did we do to you'. Meeting real people can undo a lifetime of blather and must be
stopped at all cost.
b Perhaps memory fails me but I think SOHR propagated the SAG gas attacks mythology. I have
stated that McRaven should be recalled to active duty and court-martialed. I could find
several punitice articles in UCMJ under which he could be charged.
When McCain returned from the Hanoi Hilton he could have been prosecuted for treason he was
not because "peace with honour" overrode UCMJ and honour. McRaven is being offered up as a
distraction. Call him back to active duty yes, and assign him somewhere dreary, unimportant
and far from CONUS. Ignore the stuff he is blathering while he is retired, if he repeats
blather while on active duty then the navy might be able to recover some honour.
No...your memory does not fail you, Colonel, the SOHR was the main source cited at MSM level
on the alleged protests which gave place to the destruction of Syria and the legitimation and
labelling of alleged "moderate rebels" which then resulted being but terrorist jihadi groups
brought mainly from abroad under financing and mtrainning of non Syrian actors...
The source on the alleged atrocities commited by Assad was SOHR at the first years of the
war on Syria, along with Doctors Without Borders and "special envoys" by British and French
main papers reporting from the former, and first, "Baba Amr" caliphate in Homs....I am
meaning the times of Sunday Times´ Marie Colvin and the other woman from Le
Figaro , who then resulted or KIA or caught amongst the jihadists ranks along with other
foreign "special envoys" who then were released in a truce with Assad through a safe
corridor, especially made for that end, to Lebanon.
I fear SOHR was the source of the super-trolling consisting on inundating the MSM comments
sections, like that of El País , with dozens of vertical doctored photographs
every time any of us aware entered commenting to debunk their fake news.
I remember this since that was the starting point of Elora as net activist...( till then,
just a baby, peacefully growing up...unaware....but had no election, felt it was a duty,
since, as you comment here, so few people aware...Having known Syria few years before she
could not believe what they were telling about Assad, who, eventhough not being perfect, as
it has been long ago proved any other leader in the world is, had managed to show the
visitant a flourishing Syria where misery present at other ME countries was almost
absent...
It is only lately, when the Syrian war was obviously lost for the US coalition, that the
SOHR started contradicting some fake claims by the White Helmets, especially last two alleged
chemical attacks, if Elora´s not wrong.
Why this, why now, why in this form? Probably those powers behind SOHR trying to secure a
part in the cake of reconstruction and future of Syria...since, it got obvious, love for
Syria is not amongst one of their mottos...
Trump approves $4.5 million in aid for Syria's White Helmets
WASHINGTON -- US President Donald Trump has authorized $4.5 million in aid for Syria's
White Helmets group, famed for rescuing wounded civilians from the frontlines in the civil
war, the White House says today...
Thank you for this refuge from the noise. How long before the strangling of information makes
its way here, and to Craig Murray, Naked Capitalism, and others who look on with clear eyes?
Humans are copy/paste artists and generally not very good at creative thinking. When shown a
series of steps to achieve a reward people will repeat all the steps including clearly
unnecessary ones. Monkeys will drop unnecessary steps and frequently show more creativity by
using a different method to achieve the reward instead of copying.
The old story goes how a woman always cut the ends off a roast before putting it in a pan.
When her daughter asks why she doesn't know, asks her mother who doesn't know and asks the
great grandmother who laughs and says her pan was too small.
I suspect it is a functional tradeoff that lets us transfer great amounts of cultural
information and maintain a civilization of sorts. It creates a tough environment for
innovators and allows for easy manipulation of the majority.
Nature of course always has a sprinkling of minority traits in the gene pool to allow for
sudden changes in the environment. Most likely those of us that are more critical thinkers
and like in depth, multi-dimensional viewpoints and historical knowledge are always going to
be standing by watching the crowd do their copy/paste thing.
The rise of the internet giving easy access to more "sources" means more fragmentation in
worldviews than ever before depending on where people copy/paste from.
Re: only three TV channels and they all said the same thing!
Once Upon a Time, not so long ago, publishing news was hard. For one thing, you needed a
printing press, which was big, expensive and required housing and specialized technicians to
operate it. Not only that, but a printing press cost money for every sheet of paper printed,
and you had to spend more money to distribute what he printed.
They say that "freedom of the press belongs to those who own one" but there's more! Unless
you were already rich and planned to publish as an expensive and time-consuming hobby, you
needed an income stream. You would get some money from subscriptions, but subscriptions are
really a means to sell advertising. Dependence on advertising meant that there were some
people the publisher had to keep happy, and others he could not afford to annoy.
Anyone who knows anything about local news knows this. At best, it's a tightrope walk
between giving subscribers the news they want to know, and not infuriating your advertisers.
The result was a sort of natural censorship. Publishers had to think long and hard before
they published anything that would tork the bigwigs off. The fact that a publisher was tied
to a physical location and physical assets also made libel suits much easier.
The same thing applied to broadcast TV, only more so. It took orders of magnitude more
money, and you were restricted to a limited amount of bandwidth.
The internet changed all that. Now, any anonymous toolio with a laptop ($299 cheap at
WallyWorld) and WiFi (free at many businesses) can go into the news publishing business by
nightfall, and with worldwide distribution and an advertising revenue stream, to boot.
Marginal cost of readership is zero.
Needless to say, this development has The People That Matter very concerned, and they are
working hard to stuff that genie back into the bottle.
For what it's worth, I found the late Udo Ulfkotte's personal-experience book "Bought
Jounalism" to be quite interesting on this topic, as it details the kind of nuts-and-bolts of
print-media prostitution. But I would really like to see an org-chart sometime of the
overlapping, possibly competing, mission control centers (if that's the right phrase) that
control the various "Wurlitzer" messaging and who, ultimately, is on charge of these. It has
been intriguing to watch, since Kerry uttered his "the Internet makes it very hard to govern"
line years ago, the blurry outline of a vast operation to shut down any non-approved media
messages, now including all social media. To give credit where credit is due, "they" sure
have done a bang-up job in feeding bullshit across all platforms down the throats of a
Western people, like a goose being fattened up for foie gras.
"...the US government (along with our British and Israeli helpmates and masters) are the
preeminent creators and purveyors of the manufactured virtual facts on which we base our
policy."
Sir
I've been perplexed for some time what the objectives are of these virtual fact creators?
When one digs into who the movers & shakers are in the virtual fact creation apparatus
then it seems very much analogous to the Jeffrey Epstein orbit. Folks bound together through
the carrot of extraordinary personal gain and the stick of personal destruction. Your
Drinking the Koolaid, is a seminal work in exploring how these virtual facts are created and
how those who challenge the creation are marginalized and even destroyed personally.
IMO, policy making on the basis of virtual facts extends beyond foreign policy to economic
and financial policy as well as healthcare policy in the US. The symptoms are seen in growing
wealth inequality and increased market concentration globally and financial policy completely
unmoored from common sense and sophistry an important element in virtual fact creation.
We're seeing signs of the early breakdown in social cohesion with social unrest in France,
Spain, Hong Kong, Chile, Lebanon, Ecuador. Brexit and the election of Trump despite the
intensity and vitriolic nature of how the media was used against them. The impeachment of
Trump another tool in the desperate attempt to retain and consolidate power. Maybe we're in
the Fourth Turning as Howe & Strauss label it.
"The Soviet Union never ended. Russia is still communist ..."
In the interest of specificity and accountability, where/who in the MSM are asserting
that?
You (PL) are making a serious charge.
Just who is guilty of perpetrating such a blatant falsehood?
well it seems to me that the groundwork is being laid for an authoritarian state - and it
already has sophisticated tools that are unprecedented in their scope and depth and ability
to store data. And the whole enterprise is based on three rules:
1) secrecy - data is restricted to "insiders";
2) deception - the "outsiders" (you know, the citizens) are regarded as a herd of cattle to
be managed - with lies and disinformation so we don't get any ideas;
3) ruthless enforcement to dehumanize and destroy dissent. Just consider the torture and
destruction of Journalist Julian Assange: https://www.craigmurray.org.uk/
Not sure what the appropriate response is but I spend a lot of time at my camp working in
the woods. Thanks, Colonel Lang, for maintaining this site.
Keith Harbaugh
This is my opinion. I am uninterested in proving anything to you. If you listen to what is
said on the MSM (including Fox) it is evident that in the "minds" of the media squirrels
Russia is just the USSR in disguise. Try listening to what they are saying as sub-text.
The request was not just for my benefit, but with the thought that it would be useful to
document the occurrences of such clearly false statements in the media.
It is certainly true that Russia is being demonized in all the MSM I have sampled.
A frequent criticism is that Putin, like Assad, and earlier Saddam and Quadaffi,
is essentially an illegitimate ruler of his country,
ruling through brute force and without the consent of his countrymen.
(Thus the WaPo editorials routinely call Putin a "thug",
just as they call Assad a "butcher".)
I am certainly not endorsing that view, just reporting what I hear and read.
When I hear that, I harken back to my graduate school days,
when the same sort of charges were leveled against America, which was usually spelled
"Amerika", or sometimes "AmeriKKKa", and described as a racist, imperialist, fascist country
whose establishment must be "Smashed".
I believe the core group of people who so wanted a revolution in America in 1970
(which they essentially got, as we have seen over the last 50 years)
are much the same as those now demonizing Russia.
Here is some specificity on their complaints against Russia back then:
They were not opposed to the USSR, or communism.
Many of them were in effect communists.
The cry among many was : "Marx, Mao, and Marcuse" (Herbert Marcuse was a former Brandeis professor who extolled cultural Marxism).
What they did have, in spades, was a feeling that their ancestors had been victimized by the
Czarist regime in Russia,
which, among other supposed sins, had not done enough to prevent pogroms against them.
They seemed to have a deep fear of the Russian people,
based on their long experience with them.
My suspicion (actually, belief) is that the opposition to Putin is based on the fact that
he is sometimes viewed as a throwback to the the Czars,
and that is definitely not something looked upon favorably by many Jews.
"Trump has a balance sheet where a soul should be and that is the basis for the belief
that MBS and/or his "country" are our friends."
Not to defend Trump and his balance sheet mindset with respect to the Saudis, the reality
is that both parties and presidents from George H.W to Bill Clinton to W and Obama have
treated the Saudi monarchy as our "friend", even when they sponsored the terrorists that
attacked us on 9/11.
Tony Blair became a wealthy man after his prime ministership on the back of money thrown
his way by the Arab sheikhs.
If it is true that humans very often fall in worship at the feet of Mammon, which very few
reasonable people would contest, and if this idolatry produces almost wholly unwanted
outcomes, a few important observations immediately follow.
The first might be that the so-called market and its allegedly 'neutral' distributive
mechanisms do not produce the best of all possible worlds as a result of people trading with
each other in pursuit of ever more money. The primary reason for this is that market
fundamentalism takes no account of power and its symbiotic relationship with money; indeed,
it is logically required by its fundamental tenets to deem money a 'neutral veil' that
enables market activity as a kind of infinite and inert catalyst.
The second, and far more important, is what we hold to be valuable at the cultural level,
and how we go about systemically measuring and distributing that value. Currently, money is
the primary, almost only, tool for that job. Thus, if we cannot financially afford to do a
thing, that thing is not worth doing by definition, even to the point of actively not doing
what is actually affordable and desirable in terms of available resources and know-how to
protect and nourish the environment that makes our very existence possible. Essentially, this
'illogic' is how societies operate today. With money as their guiding value system deep in
their core functioning we are congenitally condemned to choose 'profitable' endeavours that
are in fact destructive and socially corrosive over the long term.
The third is that there is thus something badly wrong in our cultural sense of what value
is, how to generate it, and how to distribute it. The cure for this ill lies, in part, in
dissolving the boundaries between various relevant disciplines – e.g., ecology,
physics, sociology, economics, etc. – to some degree. For, while market-based economics
wholly dominates how we think about and operate money, the general problem so sharply
illustrated in the article above will persist, even though most of us, the vast majority of
us, want that problem to go away. One pivotal element of what ought to be undertaken, in my
view, is a very critical and open-minded look at how price and scarcity are interlocked, and
how their symbiotic relationship influences how we perceive value, then over-consume as
guided by that highly incomplete perception, and consequently fail to prioritize vital human
vales such as trust, meaning and belonging.
Toby Russell
I wish I could, vexarb, but know only of a few decent ones that critique rather than offer
solid ideas for complete overhauls, which is what is needed. One little volume that at least
examines some alternative money systems and is also easy reading is Richard Douthwaite's "The
Ecology of Money".
Aside from that there's Herman Daley's multi-decade commitment to steady-state economics,
though he only recently began looking at the money system as a driver of perpetual growth,
and I'm not sure what he's put forth on that pivotal point.
There's also "Sacred Economics" by Charles Eisenstein, but his offered solution –
negative interest rates funding a guaranteed income as a kind of flowing 'money out from the
top / money in at the bottom' dynamic – is likely both impractical and paradoxically
too rooted in compound interest and money-profit to really work as expected, though that's my
personal opinion. Besides, when radically new is needed, open-minded experimentation is the
order of the day.
There's also biophysical
economics , but I've only looked at it briefly and that was quite a while ago.
If you read German, there's Franz Hoermann's Infogeld , which is the idea that
most interests me. It includes novelties such as asymmetrical prices that are determined
scientifically/democratically in terms of actual biophysical costs rather than via so-called
'price discovery', guaranteed basic provision (not income), earning Infomoney for studying,
parenting, staying healthy, etc., and a broad philosophical approach that recognizes how
complex and subtle real value is, and that linear numbers simply cannot measure it. I
translated/paraphrased much of his work a few years ago. It can be found here . It's not a
fully fleshed-out idea, just a collection of sketched pieces, but with work and
experimentation it might become what's needed
vexarb
Toby, many thanks for your considered reply. I have marked two of your recommendations for my
own reading and as presents for the Festive Season to my grand daughter who is studying both
ecology and biophysics: "The Ecology of Money" and Biophysical Economics. The latter seems to
be an expansion of Findlay's notion (as a chemist) that wealth ought to be measured in units
of energy (an idea which was taken up by our professor of Chemical Thermodynamics in the 50s
by comparing nations in terms of their "energy slaves per capita". Ecology and Biophysics are
sciences, which is why I was attracted by your 3 principles in the first place.
Anecdote to explain where I am coming from: Many years ago Shell Oil inflated the price of
their oil reserves; this caused a flutter in business news but I could not understand what
the fuss was about because Shell's figures did not affect the real amount of oil that was
actually there, underground.
Toby Russell
Interesting. And if we go back to the 1930s we find the work of another chemist, Frederick
Soddy, who also tackled economics and wealth, in particular how to design a money system that
acted in accordance with physical laws, so to speak (e.g. "The Role of Money"). I believe he
won a Nobel Prize for his chemistry, but was soundly poopooed by the economists of the time
for meddling in their business.
I personally think that wealth and value, as synonyms, cannot ever be objectively defined
or measured as they are rooted in subjective experience. Any new economics worth the effort
will need to take proper account of this fact, alongside all the necessary biophysics and
ecology of course. All schools of the dismal 'science' do address this issue, but with
varying degrees of philosophical rigour. The treatments of subjective value I have looked
into within economics thus far are unsatisfactory (behavioural economics somewhat excepted),
with the market invariably posited as a neutral (thus scientific) 'objectifier' of all that
subjective trading between households and firms.
vexarb
Toby, firstly thanks for the gentle correction: yes it was Soddy who proposed "energy pence",
though Findlay was very keen on Chemistry in the Service of Humankind. And I agree thoroughly
with your own doubt "that wealth and value, as synonyms, cannot ever be objectively defined
or measured as they are rooted in subjective experience."
"A person who knows the price of everything and the value of nothing" -- Oscar Wilde.
Your remark seems to throw an interesting light on a well known saying by Rabbi Jeshuah of
Nazareth: "You cannot serve both God and Mammon" -- if by God you mean the Creator of All
Things Bright and Beautiful, All Creatures Great and Small, All things Wise and Wonderful";
and my Mammon you mean the Creator of Fiat Money alone.
Toby Russell
Excellent, thank you for that, BigB! Wow, and John McMurtry got a mention in there. I'll see
your McMurtry and raise you a Jackson
(I have to say, your thinking and hopes align quite tightly with those of Franz Hoermann.
Shame his work is in German. He's a kind of nutty professor, works in a Viennese university
in Rechnungswesen or something, which is some form of accountancy, but is very widely read
and open-minded.)
Around 2007/2008, I became obsessed with money systems for obvious reasons. I started a
blog sharing my angry insights and laying out as clearly and angrily as I could Why Money Has
To Go! What I discovered is that people don't want to know, can't imagine a world without
money, and I concluded that the cultural lag preventing radical change is a true
representation of where we are as a species, as consciousness in human form. Our state of
consciousness is as natural as everything else. After all, there is only nature. Even
deliberate, malicious distortions of nature are part of nature. And that's when I really
started working on myself, which is of course the work of lifetimes. Because, to paraphrase
that infamous Michael Jackson song; you can't change them, you can only change yourself.
BigB
Have you read any late Merleau-Ponty? He was largely overshadowed by his better known friends
Sarte and Simone de Beauvoir. After his death he slipped into the shadow of Sartre's shadow
of fame – and was largely forgotten.
He was a huge influence on Varela. Around 2005: some of his late lecture notes turned up
– made by an anonymous student – and there were several books published. This has
sparked a minor revival in his significance: which I have been revisiting for the last few
years.
He held the view of the nature we know as a *constructum* a scientific representationalism
that is an active barrier – not to the nature 'without' but the nature within. The
*chair du monde* the 'flesh of the world' the heart of all creation and experience.
He was undergoing a Gestalt: to put pure phenomenological experience at the heart of
nature – thus liberating science from itself. Echoes of Schrodinger, Bohr, Eccles,:
presaging Bohm, Varela, Bitbol etc.
Unfortunately, he died suddenly of a stroke. Sartre and de Beauvoir stole the limelight
'till now.
Regarding money value systems. I wholly concur with you and your "nutty professor"
Hoermann. The general or Husserlian 'natural attitude' is based on money. What is hard to
discern: is that it is based on it whether people have 'skin in the game'. Everyone wishes
the market to do well: because they have 'dreams in the game'. If the economy does well:
there will be a return to progress and prosperity – where 'I' will do well. This has
nothing to do with access to capital. Access to dreams and values linked to capital are all
that is required. Free-enterprise market based economies are really 'desire-dream production'
facilities. Linking Freudian pleasure principles to actual production and valorisation of
capital. This is Mark Fisher's 'Capitalist Realism'.
That is why the production function is not linked to any real world values. If it were:
production – desire-dream production – would stop. Which is why Ayers, Keen,
Kummel, Spash et al will be rejected. Because exergy and entropy considerations end the
desire-dream "actual fantasy" production. And it can never be restarted.
The real reasons for which are not lack of resources (input source degradation) – or
waste pollution of sinks (output sink degradation) they are lack of imagination. If you take
away the current money-value nexus: you take away the Self that is invested –
self-invested: at all market levels (not just capital markets) – in those values. Value
and asset stripping the epochal Cartesian subjectivity of its worth. The paradox is that
worth is already less than zero – due to the market failure and artificial intervention
of the Central Banks.
Cartesian subjectivity is self-invested in a Capitalist Realism that is about to asset
strip and devalue every form of desire-dream production – downgrading entire continents
of human aspirations to 'negative yielding junk' status. That is Capitalist Realism. In the
coming market failure: everyone fails. There will be carnage – and deaths. And a
tsunami of recrimination and blame.
A tiny percentage of 'Cassandras' will be powerless to stop this. All the information is
in the public domain. I had no trouble finding any of it. The picture is crystal clear.
Whilst the majoritarian involvement is with desire-dream production of perpetual motion
prosperity: something entirely different is actually occurring. I cannot think of anyone that
is looking at the coming collapse as anything other than the end of another business cycle.
We'll just start another business cycle. How?
It's a fair question: one very few want to confront. There is no Plan B: because there is
no doubt of the answer. The current political debate is pure pantomime and fantasy if you
apply real world dynamical constraints. I wish Steve Keen every success: though I truly
believe it has come too late in the day.
I think we would have more success following Merleau-Ponty and foregoing the entire
reliance on desire-dream production. Whole people who are actuating life and creation as a
syngenesis – the 'together creation' of a valueless value-equality system – don't
need spurious dreams. They are living the dream right now. No need to rape the earth. Only
preserve it as the only shared value production system we have. But you already know
this.
BigB
Unbeknownst to me: Ted Trainer has been reviewing a similar reading list to me. And drawn the
same "true prophecy" conclusion: we are already in a post-production world.
From the above discussion, one could conclude that conventional economic theory is standing
on its head: it uses money as a measure of wealth, when in reality wealth is the measure of
money.
Take the Icelanders for example: the only "Western" country to follow China's excellent
practice of jailing crooked bankers. The Icelandic Leader did not look at the enormous sums
stolen, and exclaim in awe, These crooks are too big to fail. Instead, Iceland looked at
their real wealth: water, fish, a fragile but productive soil, and geothermal energy. So they
cocked a snook at British PM George Brown who called Icelanders "terrorists", jailed their
crooked bankers and their crooked politicians, and are doing much better than the UK's
Classical Monetarist economy.
Toby Russell
Precisely. In a very real sense, we are a simple 180 degree twist away from something
wonderful. Its our collective somnambulist imagination that stands in our way.
BigB
Precisely.
WEALTH:
From Middle English – *wele* = wellbeing; welfare
closely allied to HEALTH – *hoelp* = wholeness; being whole (among other roots).
The word has been engineered in use into a narrowly defined measure of accumulation.
Real wealth is simply being here. Economies do not allow for that anymore.
Toby Russell
Thank you. No, I hadn't heard of Merleau-Ponty but will now look into him. It sounds very
observant, clear sighted. There is so much of this stuff out there, but the deep dog-whistle
excellence of public-relations brain washing has been able to keep the infantile solipsism
– which I take to be Cartesian subjectivity – alive and kicking in its pram of
consumer conveniences. Who knows what the cost will be.
BigB
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It is way to early to falsely declare that the individual Cartesian subject is dead. But it
its disembodied subjectivity is under threat: from the very science that stands between us
and nature.
We supposedly live in a positivist empirical scientific paradigm. Supposedly: because we
left us out of the representation. And the rational empirical Self we invented from science
and philosophy is nowhere to be found for anyone who cares to look. Which is too few
unfortunately.
No one wants to totally debunk science: only to liberate an observer participant/dependent
second order science – with first person phenomenology at its heart. After all: we do
not experience ourselves via self-reports to others who dictate back to us what and who we
can be. Actually, we pretty much do exactly that for the moment.
To bridge the gap: Varela proposed his 'neurophenomenology' – which was a rigorous
first person accounting "mutually constraining" the third person neursoscientific lab
approach (how much we are supposed to learn from 'rubber hand' illusions – I have never
quite been sure. In fact I believe this 'third person' approach to be quite distorting and
very possibly even dangerous we 'hallucinate' consciousness; reality is an illusion;
etc).
We need to end up with a holistic account – not a 'Frankenstein' paradigm stitched
together from phantom limb pains; whole body illusions; aphasia and lesion studies; etc.
We are whole: not the sum of our dead deterministic parts! What a pity Varela died too
soon too.
Toby Russell
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Yes, a holistic account. For me that starts with accepting there is no matter, just
information; no space, just the mathematics of dimension, volume, distance, etc.; no energy,
just the mathematics and physics of force, attraction, repulsion, etc.: all information.
There is only experience, which is a necessary property of consciousness. We cannot know what
is 'beyond' that, because it lies outside what we are. We cannot even know if anything
'beyond' consciousness is possible.
And yes, the proposition that dead bits and pieces can be arranged in such a way as to
create the 'illusion' of life and consciousness is wholly untenable. Just the simple query:
"Who or what is being deceived by the illusion?" bursts that bubble. Or ought to. People do
so cling to their beliefs
Tim Jenkins
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Fine comment, Toby and may I submit that for real values to shine through, on collective
societal 'growth' & evolution of consciousness, harmonised with critical reasoning, then
the very first thing we need to get rid of is the IMF & Co.
Now that Kristalina Georgieva is the new M.D. people should be able to quickly see
clearly, that after her 1,001 days at the WBO and her previous pathetic E.U. C.V. one does
not need to understand ANYthing to do with how the system truly functions presently & how
it could be made to work for the people.
Stalinka's wholly unsuitable levels of deception, distraction & professional
incompetence, combined with her love & respect for Mafia Bosses, (literally), in her own
personal drive of pure self-interest and fuck Bulgaria and the Bulgarians mentality, was well
proven when she sided against Irina Bokova for Secretary General of the U.N. :- purely to get
on side with Merkel, May & BG PM Borisov's alliance with Anglo-Zionist-Capitalists &
NATO's non-existent interest in the Palestinian Problem. Bokova, on the other hand, had
actually done more than just getting down to work in changing Law and scything Budgets
@UNESCO and since serving as boss of UNESCO, thanks to Bokova we can now proceed legally,
theoretically, against any genocidal policy of war, because in Law,
"The Destruction of Culture is a Terrorist Act "
A solid foundation from which to work from,
in securing Palestinian 'values' & property rights.
Forget the IMF & Stalinka's rhetoric: we don't grow olives in Bulgaria, but have much to
trade with those who do and after Erdogan's "Operation Olive Branch", it is high time people
penalised Rhetoric & rewarded Sincerity in actions, not empty words inverting
& perverting reality . . . to twist trust, spin meaning & annulate cultural
belonging.
"This idolatry produces almost wholly unwanted outcomes" no 'ifs', Toby.
Greetings,
Tim
Toby Russell
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Thank you, Tim.
Yes, the evolution of consciousness is central. Indeed, I don't think we'll manage to
lastingly root out our need for corruptible institutions like the IMF and World Bank and BIS
etc., until we have developed or evolved a robust cultural desire to do things very
differently. I don't feel a top-down change can happen. And for radical change to be bottom
up, effective, sustainable and true to who we are as humans, we have to change in our
consciousness, away from fear, distrust and greed, towards love, trust and sharing. And these
things take time
smoe
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yes , boundaries present profit opportunities. The nation states are bounded human
containers.. the humans caught in the containers are fed the information that makes up the
environment and so they only know what is made available to them. That means those in control
of the propaganda can differentiate the humans and then sort them by binaries..
like gun control, or politicians, or race, place of origin, social factors, education, mental
ability, religion or just about anything.. But separation is not enough, those in control of
the information (propaganda) then polarize the thinking or feelings of the persons in the
differentiated groups; its like a football game, everyone is either for the Red Team and
strongly against the blue team, or vice-a-versa.
If you exchange a new born child, born to a Jewish family in New York, for a child born
the same day in Iran.and and the parents of the exchanged children mature in their own native
societies the non genetic child, 24 years later. the adult version of these two now matured
children will hate each other, not be able to speak the language of the other and be
committed to a vastly different set of goals and hold a vastly different set of basic
beliefs.
Nation state encapsulation allows to different humanity and propaganda allows to polarize
the thinking of those incarcerated within the nation states. These two things (boundary and
propaganda) account for, or are the basis of citizen support for all wars, and binary
differences that lead to reasoned differences of opinions. War comes about when some greedy
person (usually those supporting the leader and the leader) wants something the polarized
other side has or refuses to yield on.
Toby Russell
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Yes. Your summation reminds me strongly of Lewis Mumford's The Myth of the Machine, which is
about how unchecked ego – the mythic solar hero run rampant – structures
societies as mechanical-processional systems revolving around its hidden fears and need for
final control of everything. Of course there is never enough control and it all breaks in the
end, as narcissism must.
I should add, though, that diversity is vital. Life without diversity is impossible. The
way for us all, unique as we are, to communicate as successfully as possible with each other,
is to have zero beliefs, as you suggest in another comment above. That means almost zero
propaganda, and that little which might remain – there may always be a need for some
common vision of what life is about as part of meaning making and the fact that humans are
social beings – must be explicit and transparent, and always open to robust
questioning.
"... "Along with the wreckage of the family, we are seeing record levels of depression and mental illness, dispirited young people, soaring suicide rates, increasing numbers of angry and alienated young males, an increase in senseless violence, and a deadly drug epidemic," he said. ..."
Share U.S. Attorney General
William Barr raised concerns about the increase in secularism in society in a speech on
Oct. 11, speaking about how that has contributed to a number of social issues plaguing
communities across the nation.
Barr, who
delivered his remarks to students at the University of Notre Dame's law school, drew
attention to the comprehensive effort to drive away religion and traditional moral systems in
society and to push secularism in their place.
"We see the growing ascendancy of secularism
and the doctrine of moral relativism," Barr said.
He said that the forces of secularism are using mass media and popular culture, the
promotion of greater reliance on government intervention for social problems, and the use of
legal and judicial institutions to eliminate traditional moral norms.
Barr explored several of the consequences of "this moral upheaval," highlighting its effect
on all parts of society.
"Along with the wreckage of the family, we are seeing record levels of depression and
mental illness, dispirited young people, soaring suicide rates, increasing numbers of angry and
alienated young males, an increase in senseless violence, and a deadly drug epidemic," he
said.
"Over 70,000 people die a year from drug overdoses," he said. "But I won't dwell on the
bitter results of the new secular age. Suffice it to say that the campaign to destroy the
traditional moral order has coincided, and, as I believe, has brought with it, immense
suffering and misery."
Barr said religion has come under increasing attack over the past 50 years, underscoring how
secularists are using society's institutions to systematically destroy religion and stifle
opposing views.
"Secularists and their allies have marshaled all the forces of mass communication, popular
culture, the entertainment industry, and academia in an unremitting assault on religion and
traditional values. These instruments are used not only to affirmatively promote secular
orthodoxy but also to drown out and silence opposing voices," he said.
He said that people are moving away from "micro-morality" observed by Christians, a system
of morality that seeks to transform the world by focusing on their own personal morality and
transformation. Instead, he said the modern secularists are pushing a "macro-morality," which
focuses on political causes and collective actions to address social problems.
"In the past, when societies are threatened by moral chaos, the overall social costs of
licentiousness and irresponsible personal conduct become so high that society ultimately
recoils and reevaluates the path it is on," Barr said.
"But today, in the face of all the increasing pathologies, instead of addressing the
underlying cause, we have cast the state in the role as the alleviator of bad consequences. We
call on the state to mitigate the social costs of personal conduct and irresponsibility. So the
reaction to growing illegitimacy is not sexual responsibility but abortion; the reaction to
drug addiction is safe injection sites."
"The call comes for more and more social programs to deal with this wreckage, and while we
think we are resolving problems, we [actually] are underwriting them."
He also pointed out how the law has been used to "break down traditional moral values and
establish moral relativism as the new orthodoxy," giving the example of how laws have been used
to aggressively force religious people and entities to subscribe to practices and policies that
are antithetical to their faith .
"The forces of secularism have been continually seeking to eliminate the laws that reflect
traditional moral norms," he said.
Barr also highlighted the role of religion in society, saying it promotes moral discipline
while it influences people's conduct.
"Religion also helps promote moral discipline in society. We're all fallen. We don't
automatically conform our conduct to moral rules, even when we know that they're good for us.
But religion helps teach, train, and habituate people to want what's good," he said.
"It doesn't do this primarily by formal laws -- that is, by coercive power -- it does this
through moral education and by framing society's informal rules -- the customs and traditions
which reflect the wisdom and experience of the ages. In other words, religion helps frame a
moral culture within society that instills and reinforces moral discipline."
There has recently been an avalanche of articles and books about the "crisis of capitalism"
predicting its demise or depassement. For those old enough to remember the 1990s, there is a
strange similarity with the then literature arguing that the Hegelian end of history has
arrived. The latter literature was proven wrong. The former, I believe, is factually wrong and
misdiagnoses the problem.
The facts show not the crisis, but on the contrary, the greatest strength of capitalism
ever, both in terms of its geographical span and the expansion to the areas (like leisure time,
or social media) where it has created entirely new markets and commodified things that
historically were never objects of transaction.
Geographically, capitalism is now the dominant (or even the only) mode of production all
over the world whether in Sweden where the private sector employs more than 70% the labor
force, the United States where it employs 85% or in China where the
(capitalistically-organized) private sector produces 80% of the value added.[1] This was
obviously not the case before the fall of communism in Eastern Europe and Russia, nor before
China embarked on what is euphemistically called "transformation" but was in reality
replacement of socialism by capitalist relations of productions.
In addition, thanks to globalization and technological revolutions, a number of new,
hitherto non-existent markets have been created: a huge market for personal data, rental
markets for own cars and homes (neither of which was capital until Uber, Lyft, Airbnb etc. were
created), market for housing of self-employed individuals (which did not exist before WeWork)
and a number of other market such as those for taking care of the elderly, of children, or
pets, market for cooking and delivery of food, market for shopping chores etc.
The social importance of these new markets is that they create new capital, and by placing a
price on things that had none before transform mere goods (use-value) into commodities
(exchange value). This capitalist expansion is not fundamentally different from the expansion
of capitalism in the 18th and 19th century Europe, the one discussed both by Adam Smith and
Karl Marx. Once new markets are created, there is a shadow value placed on all these goods or
activities. This does not mean that we would all immediately run to rent our homes or drive our
cars as taxis, but it means that we are aware of the financial loss that we make by not doing
so. For many of us, once the price is right (whether because our circumstances change or the
relative price increases), we shall join the new markets and thus reinforce them.
These new markets are fragmented, in the sense that they seldom requite a sustained full-day
work. Thus commodification goes together with gig economy. In a gig economy we are both
suppliers of services (we can deliver pizza in the afternoons), and purchasers of many services
that used to be non-monetized (the already mentioned: cleaning, cooking, nursing). This in turn
makes it possible for individuals to satisfy all their needs on the market and in the longer
term raises big issues such as the usefulness and survival of the family.
But if capitalism has spread so much in all directions, why do we speak of its crisis?
Because the malaise which is limited to rich Western countries is supposed to afflict the
entire world. But this is not the case. And the reason why this is not the case is because the
Western malaise is the product of uneven distribution of the gains from globalization, an
outcome not dissimilar to what happened in the 19th century globalization when the gains were
however disproportionally reaped by the Europeans.
When this new bout of globalization began, it was politically "sold" in the West, especially
as it came on the heels of "the end of history", on the premise that it will benefit
disproportionately rich countries and their populations. The outcome was the opposite. It
benefited especially Asia, populous countries like China, India, Vietnam, Indonesia. It is the
gap between the expectations entertained by the Western middle classes and their low income
growth, as well as their slide in the global income position, that fuels dissatisfaction with
globalization. This is wrongly diagnosed as dissatisfaction with capitalism.
There is also another issue. The expansion of market-like approach to societies in all (or
almost all) of their activities, which is indeed a feature of advanced capitalism, has also
transformed politics into a business activity. In principle, politics, no more than our leisure
time, was not regarded as an area of market transaction. But both have become so. This has made
politics more corrupt. It is now considered like any other activity, where even if one does not
engage in explicit corruption during his political tenure, one uses the connections and
knowledge acquired in politics to make money afterwards. That type of commodification has
created widespread cynicism and disenchantment with mainstream politics and politicians.
Thus the crisis is not of capitalism per se, but is the crisis brought about by the uneven
effects of globalization and by capitalist expansion to the areas that were traditionally not
considered apt for commercialization. In other words, capitalism has become too powerful and
has in some cases come into collision with strongly held beliefs. It will either continue with
its conquest of more, yet non-commercialized, spheres, or it would have to be controlled and
its "field of action" reduced to what it used to be.
________________________________
[1] World Bank data, quoted in Capitalism, Alone
-- Branko Milanovic Reply Sunday, October 13, 2019 at 04:46 AM likbez said in reply to
anne... "In addition, thanks to globalization and technological revolutions, a number of new,
hitherto non-existent markets have been created: a huge market for personal data, rental
markets for own cars and homes (neither of which was capital until Uber, Lyft, Airbnb etc. were
created), market for housing of self-employed individuals (which did not exist before WeWork)
and a number of other market such as those for taking care of the elderly, of children, or
pets, market for cooking and delivery of food, market for shopping chores etc."
Opening new markets was the key feature of capitalism from the very beginning. Marx wrote
extensively about this particular feature in his Capital. The current problem is the "end of
growth" and whether capitalism in the form of neoliberalism can deal with "secular stagnation".
So far the answer was "trade wars"
In this particular case Branko Milanovic wrote a weak neoliberal crap, almost apologetic of
neoliberalism in best style of Milton Friedman (who now is really past its self value).
This crisis of neoliberalism (which is the current stage of capitalism, if you want to use
Marxist's terms) is systemic and no tricks like Uber can save us from the "secular
stagnation".
Brexit, Trump election, Trade War with China, EU frictions are all symptoms of the larger
problem: the idea "Financial elites from all over the globe unite" did not work well; the rule
of financial oligarchy always kills growth.
There is also another systemic problem which is known under the name "the end of cheap
oil"
That's why we now have the "secular stagnation" in the USA despite all wonders of modern
technology.
BTW Marxism proved to be mixed blessing with the analysis of capitalism withstanding the test
of the time, but with its idea of "proletarian" as the new ruling class being adamantly false
(and converted into a new secular religion paving the way to Bolshevism and national socialism,
among other things), so anything written by reformed Marxists would be taken with the grain of
salt. Reply Tuesday, October 15, 2019 at 07:18 PM
The term "centrist" is replaced by a more appropriate term "neoliberal oligarchy"
Notable quotes:
"... Furthermore, Donald Trump might well emerge from this national ordeal with his reelection chances enhanced. Such a prospect is belatedly insinuating itself into public discourse. For that reason, certain anti-Trump pundits are already showing signs of going wobbly, suggesting , for instance, that censure rather than outright impeachment might suffice as punishment for the president's various offenses. Yet censuring Trump while allowing him to stay in office would be the equivalent of letting Harvey Weinstein off with a good tongue-lashing so that he can get back to making movies. Censure is for wimps. ..."
"... So if Trump finds himself backed into a corner, Democrats aren't necessarily in a more favorable position. And that aren't the half of it. Let me suggest that, while Trump is being pursued, it's you, my fellow Americans, who are really being played. The unspoken purpose of impeachment is not removal, but restoration. The overarching aim is not to replace Trump with Mike Pence -- the equivalent of exchanging Groucho for Harpo. No, the object of the exercise is to return power to those who created the conditions that enabled Trump to win the White House in the first place. ..."
"... For many of the main participants in this melodrama, the actual but unstated purpose of impeachment is to correct this great wrong and thereby restore history to its anointed path. ..."
"... In a recent column in The Guardian, Professor Samuel Moyn makes the essential point: Removing from office a vulgar, dishonest and utterly incompetent president comes nowhere close to capturing what's going on here. To the elites most intent on ousting Trump, far more important than anything he may say or do is what he signifies. He is a walking, talking repudiation of everything they believe and, by extension, of a future they had come to see as foreordained. ..."
"... Moyn styles these anti-Trump elites as "neoliberal oligarchy", members of the post-Cold War political mainstream that allowed ample room for nominally conservative Bushes and nominally liberal Clintons, while leaving just enough space for Barack Obama's promise of hope-and-(not-too-much) change. ..."
"... These "neoliberal oligarchy" share a common worldview. They believe in the universality of freedom as defined and practiced within the United States. They believe in corporate capitalism operating on a planetary scale. They believe in American primacy, with the United States presiding over a global order as the sole superpower. They believe in "American global leadership," which they define as primarily a military enterprise. And perhaps most of all, while collecting degrees from Georgetown, Harvard, Oxford, Wellesley, the University of Chicago, and Yale, they came to believe in a so-called meritocracy as the preferred mechanism for allocating wealth, power and privilege. All of these together comprise the sacred scripture of contemporary American political elites. And if Donald Trump's antagonists have their way, his removal will restore that sacred scripture to its proper place as the basis of policy. ..."
"... "For all their appeals to enduring moral values," Moyn writes, "the "neoliberal oligarchy" are deploying a transparent strategy to return to power." Destruction of the Trump presidency is a necessary precondition for achieving that goal. ""neoliberal oligarchy" simply want to return to the status quo interrupted by Trump, their reputations laundered by their courageous opposition to his mercurial reign, and their policies restored to credibility." Precisely. ..."
"... how does such misconduct compare to the calamities engineered by the "neoliberal oligarchy" who preceded him? ..."
"... Trump's critics speak with one voice in demanding accountability. Yet virtually no one has been held accountable for the pain, suffering, and loss inflicted by the architects of the Iraq War and the Great Recession. Why is that? As another presidential election approaches, the question not only goes unanswered, but unasked. ..."
"... To win reelection, Trump, a corrupt con man (who jumped ship on his own bankrupt casinos, money in hand, leaving others holding the bag) will cheat and lie. Yet, in the politics of the last half-century, these do not qualify as novelties. (Indeed, apart from being the son of a sitting U.S. vice president, what made Hunter Biden worth $50Gs per month to a gas company owned by a Ukrainian oligarch? I'm curious.) That the president and his associates are engaging in a cover-up is doubtless the case. Yet another cover-up proceeds in broad daylight on a vastly larger scale. "Trump's shambolic presidency somehow seems less unsavory," Moyn writes, when considering the fact that his critics refuse "to admit how massively his election signified the failure of their policies, from endless war to economic inequality." Just so. ..."
"... Exactly. Trump is the result of voter disgust with Bush III vs Clinton II, the presumed match up for a year or more leading up to 2016. Now Democrats want to do it again, thinking they can elect anybody against Trump. That's what Hillary thought too. ..."
"... Trump won for lack of alternatives. Our political class is determined to prevent any alternatives breaking through this time either. They don't want Trump, but even more they want to protect their gravy train of donor money, the huge overspending on medical care (four times the defense budget) and of course all those Forever Wars. ..."
"... Trump could win, for the same reasons as last time, even though the result would be no better than last time. ..."
"... I wish the slick I.D. politics obsessed corporate Dems nothing but the worst, absolute worst. They reap what they sow. If it means another four years of Trump, so be it. It's the price that's going to have to be paid. ..."
"... At a time when a majority of U.S. citizens cannot muster up $500 for an emergency dental bill or car repair without running down to the local "pay day loan" lender shark (now established as legitimate businesses) the corporate Dems, in their infinite wisdom, decide to concoct an impeachment circus to run simultaneously when all the dirt against the execrable Brennan and his intel minions starts to hit the press for their Russiagate hoax. Nice sleight of hand there corporate Dems. ..."
There is blood in the water and frenzied sharks are closing in for the kill. Or so they
think.
From the time of Donald Trump's election, American elites have hungered for this moment. At
long last, they have the 45th president of the United States cornered. In typically ham-handed
fashion, Trump has given his adversaries the very means to destroy him politically. They will
not waste the opportunity. Impeachment now -- finally, some will say -- qualifies as a virtual
certainty.
No doubt many surprises lie ahead. Yet the Democrats controlling the House of
Representatives have passed the point of no return. The time for prudential judgments -- the
Republican-controlled Senate will never convict, so why bother? -- is gone for good. To back
down now would expose the president's pursuers as spineless cowards. TheNew York
Times, The Washington Post, CNN and MSNBC would not soon forgive such craven behavior.
So, as President Woodrow Wilson, speaking in 1919 put it, "The stage is set, the
destiny disclosed. It has come about by no plan of our conceiving, but by the hand of God." Of
course, the issue back then was a notably weighty one: whether to ratify the Versailles Treaty.
That it now concerns a "
Mafia-like shakedown " orchestrated by one of Wilson's successors tells us something about
the trajectory of American politics over the course of the last century and it has not been a
story of ascent.
The effort to boot the president from office is certain to yield a memorable spectacle. The
rancor and contempt that have clogged American politics like a backed-up sewer since the day of
Trump's election will now find release. Watergate will pale by comparison. The uproar triggered
by Bill Clinton's "
sexual relations " will be nothing by comparison. A de facto collaboration between
Trump, those who despise him, and those who despise his critics all but guarantees that this
story will dominate the news, undoubtedly for months to come.
As this process unspools, what politicians like to call "the people's business" will go
essentially unattended. So while Congress considers whether or not to remove Trump from office,
gun-control legislation will languish, the deterioration of the nation's infrastructure will
proceed apace, needed healthcare reforms will be tabled, the military-industrial complex will
waste yet more billions, and the national debt, already at $22 trillion --
larger, that is, than the entire economy -- will continue to surge. The looming threat posed by
climate change, much talked about of late, will proceed all but unchecked. For those of us
preoccupied with America's role in the world, the obsolete assumptions and habits undergirding
what's still called " national
security " will continue to evade examination. Our endless wars will remain endless and
pointless.
By way of compensation, we might wonder what benefits impeachment is likely to yield.
Answering that question requires examining four scenarios that describe the range of
possibilities awaiting the nation.
The first and most to be desired (but least likely) is that Trump will tire of being a
public piñata and just quit. With the thrill of flying in Air Force One having
worn off, being president can't be as much fun these days. Why put up with further grief? How
much more entertaining for Trump to retire to the political sidelines where he can tweet up a
storm and indulge his penchant for name-calling. And think of the "deals" an ex-president could
make in countries like Israel, North Korea, Poland, and Saudi Arabia on which he's bestowed
favors. Cha-ching! As of yet, however, the president shows no signs of taking the easy (and
lucrative) way out.
The second possible outcome sounds almost as good but is no less implausible: a sufficient
number of Republican senators rediscover their moral compass and "do the right thing," joining
with Democrats to create the two-thirds majority needed to convict Trump and send him packing.
In the Washington of that classic 20th-century film director Frank Capra, with Jimmy Stewart
holding
forth on the Senate floor and a moist-eyed Jean Arthur cheering him on from the gallery,
this might have happened. In the real Washington of "Moscow Mitch"
McConnell , think again.
The third somewhat seamier outcome might seem a tad more likely. It postulates that
McConnell and various GOP senators facing reelection in 2020 or 2022 will calculate that
turning on Trump just might offer the best way of saving their own skins. The president's
loyalty to just about anyone, wives included, has always been highly contingent, the people
streaming out of his administration routinely making the point. So why should senatorial
loyalty to the president be any different? At the moment, however, indications that Trump
loyalists out in the hinterlands will reward such turncoats are just about nonexistent. Unless
that base were to flip, don't expect Republican senators to do anything but flop.
That leaves outcome No. 4, easily the most probable: while the House will impeach, the
Senate will decline to convict. Trump will therefore stay right where he is, with the matter of
his fitness for office effectively deferred to the November 2020 elections. Except as a source
of sadomasochistic diversion, the entire agonizing experience will, therefore, prove to be a
colossal waste of time and blather.
Furthermore, Donald Trump might well emerge from this national ordeal with his reelection
chances enhanced. Such a prospect is belatedly insinuating itself into public discourse. For
that reason, certain anti-Trump pundits are already showing signs of going wobbly,
suggesting , for instance, that censure rather than outright impeachment might suffice as
punishment for the president's various offenses. Yet censuring Trump while allowing him to stay
in office would be the equivalent of letting Harvey Weinstein off with a good tongue-lashing so
that he can get back to making movies. Censure is for wimps.
Besides, as Trump campaigns for a second term, he would almost surely wear censure like a
badge of honor. Keep in mind that Congress's
approval ratings are considerably worse than his. To more than a few members of the public,
a black mark awarded by Congress might look like a gold star.
Restoration Not Removal
So if Trump finds himself backed into a corner, Democrats aren't necessarily in a more
favorable position. And that aren't the half of it. Let me suggest that, while Trump is being
pursued, it's you, my fellow Americans, who are really being played. The unspoken purpose of
impeachment is not removal, but restoration. The overarching aim is not to replace Trump with
Mike Pence -- the equivalent of exchanging Groucho for Harpo. No, the object of the exercise is
to return power to those who created the conditions that enabled Trump to win the White House
in the first place.
Just recently, for instance, Hillary Clinton
declared Trump to be an "illegitimate president." Implicit in her charge is the conviction
-- no doubt sincere -- that people like Donald Trump are not supposed to be president.
People like Hillary Clinton -- people possessing credentials
like hers and sharing her values -- should be the chosen ones. Here we glimpse the true
meaning of legitimacy in this context. Whatever the vote in the Electoral College, Trump
doesn't deserve to be president and never did.
For many of the main participants in this melodrama, the actual but unstated purpose of
impeachment is to correct this great wrong and thereby restore history to its anointed
path.
In a
recent column in The Guardian, Professor Samuel Moyn makes the essential point:
Removing from office a vulgar, dishonest and utterly incompetent president comes nowhere close
to capturing what's going on here. To the elites most intent on ousting Trump, far more
important than anything he may say or do is what he signifies. He is a walking, talking
repudiation of everything they believe and, by extension, of a future they had come to see as
foreordained.
Moyn styles these anti-Trump elites as "neoliberal oligarchy", members of the post-Cold War political
mainstream that allowed ample room for nominally conservative Bushes and nominally liberal
Clintons, while leaving just enough space for Barack Obama's promise of hope-and-(not-too-much)
change.
These "neoliberal oligarchy" share a common worldview. They believe in the universality of freedom as
defined and practiced within the United States. They believe in corporate capitalism operating
on a planetary scale. They believe in American primacy, with the United States presiding over a
global order as the sole superpower. They believe in "American global leadership," which they
define as primarily a military enterprise. And perhaps most of all, while collecting degrees
from Georgetown, Harvard, Oxford, Wellesley, the University of Chicago, and Yale, they came to
believe in a so-called meritocracy as the preferred mechanism for allocating wealth, power and
privilege. All of these together comprise the sacred scripture of contemporary American
political elites. And if Donald Trump's antagonists have their way, his removal will restore
that sacred scripture to its proper place as the basis of policy.
"For all their appeals to enduring moral values," Moyn writes, "the "neoliberal oligarchy" are deploying
a transparent strategy to return to power." Destruction of the Trump presidency is a necessary
precondition for achieving that goal. ""neoliberal oligarchy" simply want to return to the status quo
interrupted by Trump, their reputations laundered by their courageous opposition to his
mercurial reign, and their policies restored to credibility." Precisely.
High Crimes and Misdemeanors
The U.S. military's "shock and awe" bombing of Baghdad at the start of the Iraq War, as
broadcast on CNN.
For such a scheme to succeed, however, laundering reputations alone will not suffice.
Equally important will be to bury any recollection of the catastrophes that paved the way for
an über -qualified centrist to lose to an indisputably unqualified and
unprincipled political novice in 2016.
Holding promised security assistance hostage unless a foreign leader agrees to do you
political favors is obviously and indisputably wrong. Trump's antics regarding Ukraine may even
meet some definition of criminal. Still, how does such misconduct compare to the calamities engineered by the "neoliberal
oligarchy" who preceded him? Consider, in particular, the George W. Bush
administration's decision to invade Iraq in 2003 (along with the spin-off wars that followed).
Consider, too, the reckless economic policies that produced the Great Recession of 2007-2008.
As measured by the harm inflicted on the American people (and others), the offenses for which
Trump is being impeached qualify as mere misdemeanors.
Honest people may differ on whether to attribute the Iraq War to outright lies or monumental
hubris. When it comes to tallying up the consequences, however, the intentions of those who
sold the war don't particularly matter. The results include
thousands of Americans killed; tens of thousands wounded, many grievously, or left to
struggle with the effects of PTSD; hundreds of thousands of non-Americans killed or injured ;
millions displaced ;
trillions of dollars expended; radical groups like ISIS empowered (and in its case
even formed
inside a U.S. prison in Iraq); and the Persian Gulf region plunged into turmoil from which it
has yet to recover. How do Trump's crimes stack up against these?
The Great Recession stemmed directly from economic policies implemented during the
administration of President Bill Clinton and continued by his successor. Deregulating the
banking sector was projected to produce a bonanza in which all would share. Yet, as a
direct result of
the ensuing chicanery, nearly 9 million Americans lost their jobs, while overall unemployment
shot up to 10 percent. Roughly 4 million Americans lost their homes to foreclosure. The stock
market cratered and millions saw their life savings evaporate. Again, the question must be
asked: How do these results compare to Trump's dubious dealings with Ukraine?
Trump's critics speak with one voice in demanding accountability. Yet virtually no one has
been held accountable for the pain, suffering, and loss inflicted by the architects of the Iraq
War and the Great Recession. Why is that? As another presidential election approaches, the
question not only goes unanswered, but unasked.
Sen. Carter Glass (D–Va.) and Rep. Henry B. Steagall (D–Ala.-3), the co-sponsors of
the 1932 Glass–Steagall Act separating investment and commercial banking, which was
repealed in 1999. (Wikimedia Commons)
To win reelection, Trump, a corrupt con man (who jumped ship
on his own bankrupt casinos, money in hand, leaving others holding the bag) will cheat and lie.
Yet, in the politics of the last half-century, these do not qualify as novelties. (Indeed,
apart from being the son of a sitting U.S. vice president, what made Hunter Biden
worth $50Gs per month to a gas company owned by a Ukrainian oligarch? I'm curious.) That
the president and his associates are engaging in a cover-up is doubtless the case. Yet another
cover-up proceeds in broad daylight on a vastly larger scale. "Trump's shambolic presidency
somehow seems less unsavory," Moyn writes, when considering the fact that his critics refuse
"to admit how massively his election signified the failure of their policies, from endless war
to economic inequality." Just so.
What are the real crimes? Who are the real criminals? No matter what happens in the coming
months, don't expect the Trump impeachment proceedings to come within a country mile of
addressing such questions.
Exactly. Trump is the result of voter disgust with Bush III vs Clinton II, the presumed
match up for a year or more leading up to 2016. Now Democrats want to do it again, thinking they can elect anybody against Trump. That's
what Hillary thought too.
Now the Republicans who lost their party to Trump think they can take it back with
somebody even more lame than Jeb, if only they could find someone, anyone, to run on that
non-plan.
Trump won for lack of alternatives. Our political class is determined to prevent any
alternatives breaking through this time either. They don't want Trump, but even more they
want to protect their gravy train of donor money, the huge overspending on medical care (four
times the defense budget) and of course all those Forever Wars.
Trump could win, for the same reasons as last time, even though the result would be no
better than last time.
LJ , October 9, 2019 at 17:01
Well, yeah but I recall that what won Trump the Republican Nomination was first and
foremost his stance on Immigration. This issue is what separated him from the herd of
candidates . None of them had the courage or the desire to go against Governmental Groupthink
on Immigration. All he then had to do was get on top of low energy Jeb Bush and the road was
clear. He got the base on his side on this issue and on his repeated statement that he wished
to normalize relations with Russia . He won the nomination easily. The base is still on his
side on these issues but Governmental Groupthink has prevailed in the House, the Senate, the
Intelligence Services and the Federal Courts. Funny how nobody in the Beltway, especially not
in media, is brave enough to admit that the entire Neoconservative scheme has been a disaster
and that of course we should get out of Syria . Nor can anyone recall the corruption and
warmongering that now seem that seems endemic to the Democratic Party. Of course Trump has to
wear goat's horns. "Off with his head".
Drew Hunkins , October 9, 2019 at 16:00
I wish the slick I.D. politics obsessed corporate Dems nothing but the worst, absolute
worst. They reap what they sow. If it means another four years of Trump, so be it. It's the
price that's going to have to be paid.
At a time when a majority of U.S. citizens cannot muster up $500 for an emergency dental
bill or car repair without running down to the local "pay day loan" lender shark (now
established as legitimate businesses) the corporate Dems, in their infinite wisdom, decide to
concoct an impeachment circus to run simultaneously when all the dirt against the execrable
Brennan and his intel minions starts to hit the press for their Russiagate hoax. Nice sleight
of hand there corporate Dems.
Of course, the corporate Dems would rather lose to Trump than win with a
progressive-populist like Bernie. After all, a Bernie win would mean an end to a lot of
careerism and cushy positions within the establishment political scene in Washington and
throughout the country.
Now we even have the destroyer of Libya mulling another run for the presidency.
Forget about having a job the next day and forget about the 25% interest on your credit
card or that half your income is going toward your rent or mortgage, or that you barely see
your kids b/c of the 60 hour work week, just worry about women lawyers being able to make
partner at the firm, and trans people being able to use whatever bathroom they wish and male
athletes being able to compete against women based on genitalia (no, wait, I'm confused
now).
Either class politics and class warfare comes front and center or we witness a burgeoning
neo-fascist movement in our midst. It's that simple, something has got to give!
"... Combat crews of S-400, in Astrakhan Region, held combat exercises against hypersonic target-missiles "Favorit PM" and destroyed all targets. The statement of the press-service of Western Military District announced. The crews of S-400 Triumphs were from the units of air-defense of Leningrad Army of Air Force and Air Defense of Western Military District. ..."
The Russian President Vladimir Putin spoke yesterday at the yearly Valdai
Discussion Club meeting in Sochi. A video with English translations and excerpts of the
transcript are here .
With regards to the global system Putin made an interesting historic comparison:
in the 19th century they used to refer to a "Concert of Powers." The time has come to talk in
terms of a global "concert" of development models, interests, cultures and traditions where
the sound of each instrument is crucial, inextricable and valuable, and for the music to be
played harmoniously rather than performed with discordant notes, a cacophony. It is crucial
to consider the opinions and interests of all the participants in international life. Let me
reiterate: truly mutually respectful, pragmatic and consequently solid relations can only
built between independent and sovereign states .
Russia is sincerely committed to this approach and pursues a positive agenda.
The Concert of
Europe was the balance of power system between 1815 to 1848 and from 1871 to 1914:
A first phase of the Concert of Europe, known as the Congress System or the Vienna System
after the Congress of Vienna (1814–15), was dominated by five Great Powers of Europe:
Prussia, Russia, Britain, France and Austria. [...] With the Revolutions of 1848 the Vienna
system collapsed and, although the republican rebellions were checked, an age of nationalism
began and culminated in the unifications of Italy (by Sardinia) and Germany (by Prussia) in
1871. The German Chancellor Otto von Bismarck re-created the Concert of Europe to avoid
future conflicts escalating into new wars. The revitalized concert included France, Britain,
Austria, Russia, and Italy with Germany as the main continental power economically and
militarily.
Bismark's concert kept peace in a usually warring Europe for 43 years. If Putin wants to be
the new Bismarck I am all for it.
Russian president Vladimir Putin has said that Moscow is helping China build a system to warn
of ballistic missile launches.
Since the cold war, only the United States and Russia have had such systems, which involve
an array of ground-based radars and space satellites. The systems allow for early spotting of
intercontinental ballistic missiles.
Speaking at an international affairs conference in Moscow on Thursday, Putin said Russia
had been helping China develop such a system. He added that "this is a very serious thing
that will radically enhance China's defence capability".
His statement signalled a new degree of defence cooperation between the two former
Communist rivals that have developed increasingly close political and military ties while
Beijing and Washington have sunk into a trade war.
That is as good for China as it is for Russia. China has an immediate need for such a system
because the U.S. is taking a significantly more bellicose posture against it.
The U.S. left the Intermediate-Range Nuclear Forces Treaty with Russia to build a nuclear
missiles force in South Asia
that will aim at China. It is now looking for Asian countries in which it could station
such weapons. China is
using its economic might to prevent that but the U.S. is likely to succeed.
While China
has capable weapons and can defend itself against a smaller attack the U.S. has about 20
times more nuclear warheads than China. It could use those in an overwhelming first strike to
decapitate and destroy the Chinese state. An early warning system will give China enough time
to detect such an attack and to launch its own nuclear deterrent against the U.S. The warning
systems will thus checkmate the U.S. first strike capability.
Over the last two years Russia and China both unveiled hypersonic weapons. Currently the
U.S. has neither such weapons nor any defensive system that can protect against these.
Russia was smart enough to develop both - the super fast offensive weapon and a defense
against it. Via Andrei Martyanov we learn of a recent Russian press
notice:
Translation: Combat crews of S-400, in Astrakhan Region, held combat exercises against
hypersonic target-missiles "Favorit PM" and destroyed all targets. The statement of the
press-service of Western Military District announced. The crews of S-400 Triumphs were from
the units of air-defense of Leningrad Army of Air Force and Air Defense of Western Military
District.
And what this "Favorit PM" missile-target complex is? Very simple, it is deeply modernized
good ol' S-300 P series which allows to use missiles of types 5V55 which have their
explosives removed and are capable of atmospheric maneuverable flight with the velocities of
Mach=6 (in excess of 7,000 kilometers per hour). These are genuine hyper-sonic
missile-targets and, evidently, and I don't have any reasons to doubt it, S-400 had very
little problems shooting them down.
On top of the missile warning system China will also want to have that most capable air and
missile defense system. Russia will make it a decent offer.
Foreign Minister Sergei Lavrov's talked a day earlier than Putin. His speech and the Q &
A with him are here
. The talk was mostly about the Middle East and Lavrov's tone was rather angry while he passed
through a long list of U.S. sins in the region and beyond. There were also some interesting
remarks about Turkey, Syria and the Ukraine. The most interesting passage was his response to a
question about U.S. sanction against Russia to which some senators want to add even more.
Lavrov said:
I have heard that Marco Rubio and Ben Cardin are two famous anti-Russia-minded members of the
US Congress. I don't think that this implies that they have any foresight. Those with a more
or less politically mature opinion of the situation should have realised long ago that the
sanctions don't work in the direction they wanted them to work. I believe that they will
never work. We have a territory and its riches that were bestowed on us by God and our
ancestors, we have a feeling of personal dignity, and we also have the armed forces. This
combination makes us very confident. I hope that economic development and all the investment
that has been made and continues to be made will also pay off in the near future.
The U.S. loves to dish out sanctions left and right and the Trump administration has
increased their use. But sanctions, especially unilateral ones, do not work. The U.S. has not
recognized that because it has never assessed whether those sanctions fulfill their aims. A
recent Government Accountability Office report found :
The Departments of the Treasury (Treasury), State (State), and Commerce (Commerce) each
undertake efforts to assess the impacts of specific sanctions on the targets of those
sanctions. [...] However, agency officials cited several difficulties in assessing sanctions'
effectiveness in meeting broader U.S. policy goals , including challenges in isolating the
effect of sanctions from other factors as well as evolving foreign policy goals. According to
Treasury, State, and Commerce officials, their agencies have not conducted such assessments
on their own.
The U.S. sanctions and sanctions and sanctions but never checked if sanctions work to the
intended purpose. The efforts to sanction Russia have surely led to some unintended
consequences. They are the reason why the alliance between China and Russia deepens every day.
The U.S. has the exorbitant privilege of having its own
currency being used as the international reserve. The sanctioning of U.S. dollar transactions
is the reason why the U.S. is now losing it :
Russia's Rosneft has set the euro as the default currency for all its new export contracts
including for crude oil, oil products, petrochemicals and liquefied petroleum gas, tender
documents showed.
The switch from U.S. dollars, which happened in September according to the tender
documents published on Rosneft's website, is set to reduce the state-controlled firm's
vulnerability to potential fresh U.S. sanctions.
Washington has threatened to impose sanctions on Rosneft over its operations in Venezuela,
a move which Rosneft says would be illegal.
Iran has taken comparable steps. It now sells oil to China and India in either local
currencies. Other countries will surely learn from this and will also start to use other
currencies for their energy purchases. As the transactions in dollars decrease they will also
start to use other currencies for their reserves.
But the U.S. is not losing its financial or sole superpower status because of what China or
Russia or Iran have done or do. It is losing it because its has made too many mistakes.
Those states who, like Russia, have done their homework will profit from it.
Posted by b on October 4, 2019 at 18:03 UTC |
Permalink
next page " b: [Iran] now sells oil to China and India
Not to India, but India has said that that will change. India has to be deliberate because it
is angling for a permanent seat in the UNSC.
Russia is building a network of missile defense, early warning, electronic weapons systems
that will ring Greater Eurasia, not just the Russian Federation.
Russia may not produce smart phones and have their own Amazon or Alibaba scale e-commerce
platform, but they have the world class defenses and leading edge counter-strike weapons that
overwhelm anything the US has or will have for a decade to come.
Putin and Lavrov have laid out the diplomatic talking points for a safer, saner world.
And as the saying goes, if you don't talk to Lavrov, then you can talk with Shoigu
(MOD).
The Russians have warned the West. Maybe the West is hard of hearing.
But what is clear, the rest of the world has heard it and they are gravitating toward Russia
and China.
It is losing it because its has made too many mistakes.
A statement that deserves to be unpacked. I think at the core of the "mistakes" is a
certain exceptionalist attitude which carries with it a combination of greed and
hubris that promotes moral turpitude.
When the re-alignment of Russia and China started, I compared them to two soldiers, standing
back-to-back, defensively pointing their guns forward. This is becoming an integrated
continental defense now. Do you think that the two missile warning system will remain
separate? It is sad that it had to come to this, but the AngloZionist mindset of domination
and exploitation is what it is. Russia and China are not benevolent, but a big majority of
countries prefers their economic approach to the Western military - bombed and killed if you
do not comply with master's wishes. Simply, the West is a one-trick-pony in decline,
As the U.S.A.slowly petrifies into an ever more fragile state of existence will the blow that
finally causes it to fracture into a state of catastrophic impotence,( in it's eyes ) mean
that it will die with a whimper or a bang?
Will the politik of the U.S.A.wake up before it's demise and re-orientate it's ethos so as to
integrate with the new order instigated from the east or, like an enraged, immature being try
to bring the rest of the world down with it?
I hope wiser minds than those in the Senate prevail. However I'm not really that optimistic
that they are capable of serious self reflection.
Here is an article that looks at a WikiLeaks document that explains how the United States
Army is preparing to help Washington achieve its national strategic objectives:
This Army manual gives us a very clear view of how Washington uses manipulation through
its influence on the World Bank, IMF, OECD and other "global" groups to wage unconventional
warfare on any nation that doesn't share its view of how the world should function and that
threatens America's control of the globe, including nations like Venezuela, Iran, Russia and
North Korea.
While China has capable weapons and can defend itself against a smaller attack the U.S. has
about 20 times more nuclear warheads than China. It could use those in an overwhelming
first strike to decapitate and destroy the Chinese state.
b, in a nuclear exchange, all it takes is a tiny fraction of the US/China/Russia's nuclear
arsenals to finish off human civilisation, so numbers are irrelevant. Radiation knows no
borders.
Such contributors and Don Bacon, Grieved and Karlof1 might help me (dis)confirm this, but my
impression is that Russia is or could make a case for selling only or primarily defensive
weapons, to pretty much anyone ... with the effect and, say, the intent, to make wars of
aggression, particularly pre-emptive strikes, much less tempting.
By shifting the field advantage towards defense, can it be plausibly proposed that Russia
is working to make the world, overall, a safer place (even if their primary intent might be
to make it safer from attacks initiated by the Unipolar Axis)?
b: The U.S. sanctions and sanctions and sanctions . . .
It even sanctions itself, with tariffs. Free trade is dead!
Don, there's NEVER been free trade, ever, no matter how far back you look in history. Free
trade is imperial speak for the dominant economies dictating to the weaker.
Posted by: Paul Damascene | Oct 4 2019 18:46 utc | 9
my impression is that Russia is or could make a case for selling only or primarily
defensive weapons, to pretty much anyone ...
Isn't this exactly what they're doing. Martynov's writings reveal this proces in detail.
It's a process that has its origins in WWII, a process that also has economic implications
for Russia.
I agree with Barovsky in comment # 8 about the MAD nature of any nuclear war
I also want to posit that until China has its own air and missile defense system that
Russia will use its to insure that any nuclear attack on China will result in global MAD
@ b who wrote
"
But the U.S. is not losing its financial or sole superpower status because of what China or
Russia or Iran have done or do. It is losing it because its has made too many mistakes.
"
it is not the US necessarily that has the sole financial superpower status but the cult of
global private finance ownership that is international and not just the US. And now that
financial superpower status is not just being challenged from outside the Western nations of
empire but from within as I continue to write about in the latest Open Thread. The US state
of California has instantiated public finance for the state...it was signed into law this
past Wednesday and the Western MSM has yet to report or comment on this game changing
initiative.....speaks volumes to the threat it creates to global private finance because
California has the 5th largest GDP in the world.
I had been leaning toward the scenario where the Empire would, eventually, have to be put
down in a violent confrontation, with a CBG sunk, but I am really feeling now, given the
Singapore deal in the EAEU with India and Iran in the wings and the missile-shield over PRC
and Rosneft selling product in Euros and Syria and Iran and Venezuela not being wiped out,
that maybe, just maybe, the Empire will be left in the dust, with no climactic confrontation
required. Maybe I am being naive, but there seems to be evidence to support that idea.
I wish since a while for an US American Gorbachov. This kind of person only is able to bring
down the still running war economy. You would expect some hero like spiritual leader is
necessary. The only thing what was special about the russian version for that job, he was
young. Able to imagine a world without that permanent pressure, that everybody can feel in
every cell of society. Of course, I hoped that trump maybe will do this, but he is twisted in
his own challenges, already old, no real love for the people around him in general. The
actual task is to lead down US from the sole position of power to become the most important
country in the world. I hope US Americans can fell save one day without spending half of
world's expanses on war, which equals that US budget is more than half for this reason. Who
will be able to explain to voters, this isn't a sound deal?
I'm loathe to posit this but if the US follows the demise of previous empires, then only
war will accomplish this but perhaps, just perhaps the mold (or is that mould?) has been
broken? After all, WWI and WWII came about because of competition between dominant economies
and ultimately a redivision of the world into new blocs. But then again, the emergence of the
USSR changed everything, the most momentous event of the 20th century. So perhaps we need a
new USSR but this time a transnational USSR?
My country is in a sorry state of affairs indeed, and listening to those around me, a common
theme occurs, a wish that that slow-coming line in the sand which will truly mark the end of
our illusion of exceptionalism would just get here and be done, so we, or those of us who are
left afterward, can work through those damnable five stages of grieving, and begin the
process of reconstruction and healing what remains.
Judging by comments made here, I've withdrawn hope of either party having anything to
present the citizenry as a way out of our demise, so coast toward that necessary line we do.
Is that too negative?
Slightly off topic, but is not the Western use of children for nefarious purposes increasing?
From the first Hong King rioter who got shot for attacking a policeman, at all of his 14
years of age, through Epstein's sexual use of young girls for blackmail, to Greta and the
climate change screaming kids. If you are younger than 18, and without or with weak parental
oversight due to challenging economic conditions (struggle to survive), you are a fair game
for the Western "elite". Earn some pocket money by burning down Hong Kong.
This will only increase, because it runs parallel to the tactics of turning adults against
each other to miss to notice the "elite's" hand in all of their pockets. Fight each other
people and send your children into the front lines. That is how they channel anger toward's
"elite's" alternative-model enemies (China) and away from the real perpetrators and the real
issues. This is why the images of Hong Kong riots overlap with the two minute hate from the
movie 1984.
Finally, the Communist elite used children too, to do the dying in revolutions, to report
their own parents the communist authorities and to severely punish ideological opponents. The
use of children is nothing new, but it shows total moral depravity.
@ Sally Snyder 7
Thank you for that! And I thought Special Forces was only interested in assassinations.
As you indicate, it's surprising that they put such self-damaging information in print.
They think they're invincible, so we need more Lavrovs to set them straight.
re Paul Damascene #9, I see mutually assured defense as a highly desirable strategy emerging
from Russia and China. If that new 'mad' is expanded to friendlies in the middle east then a
very large sector of the planets continents can be enclosed in a single defensive frame.
I see this as a mighty good potential to arrest the lunatic tendency to war constantly
being chanted by the five eyes and their vassal toadies.
Certainly the elimination of nuclear weapons entirely should be the global objective.
Failing that, the prevention of ground blasts with the consequent dust and threat of nuclear
winter is desirable in my view. High altitude interception may prevent premature detonation
of attacking warheads but it will most likely lead to highly contaminated hot spots on
ground.
There is an evil in warmongering that is utterly beneath contempt.
I see on AMN, the Syrian News site, an article speaking about a new KFC in terrorist-held
Idlib ...
If this isn't a statement about who is collaborating in these wars I don't know what is !!
It is partially about the globalists wanting to increase the extent of their reach (apart
from all the religious and cultural issues too)
...
...but my impression is that Russia is or could make a case for selling only or primarily
defensive weapons, to pretty much anyone ... with the effect and, say, the intent, to make
wars of aggression, particularly pre-emptive strikes, much less tempting.
By shifting the field advantage towards defense, can it be plausibly proposed that
Russia is working to make the world, overall, a safer place (even if their primary intent
might be to make it safer from attacks initiated by the Unipolar Axis)?
Posted by: Paul Damascene | Oct 4 2019 18:46 utc | 9
Imo that's a perfectly sane assessment. It's just an unfortunate prerequisite, and a sign
of the times, that M.A.D. had to be looming in the background before the wisdom could be
recognised and de-escalation could commence.
@ PD 9 shifting the field advantage towards defense
>Actually all nations are supposed to concentrate on defense. The US changed its War
Dept to Defense Dept. --( to throw us off? ) There are few nations that have an overwhelming
offensive capability. Its expensive and requires a lot of people, including mostly
draftees.
> The F-35 jet fighter now goes for about $150 million per copy, in large part because it
is stealthy and can get through enemy defenses. At least that's the plan. But after eighteen
years (and counting) of development, the F-35 still has not been approved for full
production. That's an offensive weapon.
> Another expensive piece of gear is the aircraft carrier, now going for $13 billion per
copy, and several of the newfangled complex features on the new carrier design don't work.
High maintenance, too. Of eleven carriers only two are deplorable currently, none on the east
coast. Carriers have been mostly used to facilitate bombing runs over defenseless third-world
countries. They need a cheap defense.
> Regarding soldiers, few countries have a draft, or a large draft, any longer. No more
major land armies, required for offense. People are expensive, and 70% of US youth don't
qualify for service.
> The US Marine Corps is now going through a change with a new commandant. The main US
enemy now is China, and there's no thought of any war on China itself, only on allied islands
they might grab. So the Marines want to back out of their land warfare stance and concentrate
on Iwo-Jima type operations like the good old days. New USMC Commandant Berger: "We are too
heavy, too cumbersome. We're built for another Desert Storm. We have to go on a diet. .
.we're not going to go head-to-head, tank-on-tank," he said
> The recent Houthi attack on Saudi Arabia was a wake-up call. Drones and missiles,
inexpensive unstoppable and effective.
> So there's a lot of work to do, but yes one can say there is a trend from offense to
defense, and little by little the world might be safer against offensive actions.
I see mutually assured defense as a highly desirable strategy emerging from Russia and
China. If that new 'mad' is expanded to friendlies in the middle east then a very large
sector of the planets continents can be enclosed in a single defensive frame.
Excellent observation Uncle! It's the Empire (and its vassals) versus the planet.
There will never be an American Gorbachev because the American system is completely
different from the Soviet system.
In the USSR, the Communist Party was everything and commanded all the sociometabolical
aspects of society through a centralized State. When the Gorbachev killed the Party, he
killed the USSR. That's why it simply collapsed overnight and in a relatively peaceful
way.
The USA is a pure-blood capitalist society. It functions through a confederation of
capitalists, who command and owns different parts of the means of production. The State,
albeit powerful, is just one instutition among many others in this free market anarchy. The
USA, therefore, is a relatively decentralized society (for its size, it is incredibly
decentralized). In this sense, the USA is more akin to the old Roman Empire than any other
recent liberal or late-feudal empire.
My guess is the USA will degenerate slowly and very violently and chaotically, with a
succession of weak POTUS over a course of at least many decades. It can or cannot lose
territory in this process (I don't think it ever will, unless you're talking about Puerto
Rico and other possessions in the Southwestern Pacific). It almost certainly will provoke
many more wars against foreign nations in the process. It will be a very dangerous period of
Humanity's History, if not mark its end (if a total nuclear war happens).
--//--
I don't think Putin wants to be "the next Bismarck". Bismarck's new Concert was a failure:
it didn't relieve pressure between the imperialist powers in Europe and only gathered
pressure overtime in order to create an even bigger meatgrinder (WWI), which generated an
even bigger revolution (1917). By all intents and purposes, Bismarck's foreign polices were
an abject failure. His domestic record, on the other side, is stellar, since he turned
Germany into a world superpower which, by 1900, had already surpassed the UK in industrial
terms to reach second place overall (behind only the much bigger USA).
..."But the U.S. is not losing its financial or sole superpower status because of what China
or Russia or Iran have done or do. It is losing it because its has made too many
mistakes."...
The cadaver that is the USA, a ruptured spleen of financial criminality, is in it's end
stage of sucking the life of the world, it's host. Russia, China, and like minded sovereign
states are backstopping the US buck into oblivion with their gold purchases. Gold continues
to show the absurdities of the financial status of the US dollar. Gold is inoculating these
states that are being sanctioned and financially harassed. The USA, is a drunken bum in the
gutter looking for his next drink. Time is running short as the world economies are now
contracting into a spiral down the toilet drain taking the great financial criminal with
it.
If any politicians on the global chessboard can rival the statesmanship and intellect in
strategy, it sure is Putin.
Before him maybe de Gaulle, Helmut Schmidt or Churchill. But now? No where in the western
states.
To the growing ties with China and Russia: Irony is, Putin warned the western world, that
if his and Russia's preference of joining the western states would be denied, Russia would be
forced into China's arms, even though they are culturally and religiously much more tied to
Europe and the western world.
US and NATO policy brought the Russians to see the former "yellow menace" as their only
hope; Equally China was forced into the arms of its Russian neighbor, despite the Chinese
tradition of seeing the Russians equally as a not much loved neighbor.
So the "social Imperialists" and "Barbarians" of Russia and the "Yellow Menace" were forced
to overcome their old prejudices.
De Gaulle once said: "One day the Russians will realize again that they are white."
Meaning, when the Soviet system would come crashing down, the Russians would realize, that
they and their culture are European, and not Asian.
When this prophecy actually came true, and Yeltsin and Putin tried to rebuild the bridges
back to their cultural fellow European states, the Neocons destroyed that historic chance of
healing decades and century old wounds.
Putin and Russia actually tried for over a decade to avert this. Only most recently the
fight in the Russian bureaucracy is leading into going into the partnership with China more
broadly. It still is a partnership not of love or true desire, but of simple survival. And
that won't likely ever change.
I am currently reading a great book of the legendary German-French journalists and author
Peter Scholl-Latour about the new cold war against Russia. he published it IIRC over 12 years
ago, with research since the 90s for it, and including previous reports from his visits in
Russia since 1958.
He saw what he discusses here 20 years ago. And the strategic consequences of this idiotic
rejection of Russia's wish to come back into the fold of European nations by the US will
haunt us for generations to come, if it is not fixed.
Only way to that would be if we would have politicians in the EU and Europeans states like
Putin; more concrete: With the backbone, strategic insight, and a strong stand on national
sovereignty.
But with the current politicians in the EU and its states? Certainly no one on the left,
as "sovereignty" is now seen as "Nazi", and left politicians at least here in Germany being
"educated" by NATO think tanks, supporting military "interventions". The only ones who
realize how important sovereignty is for any country, are the new right like Salvini, Le Pen,
and the Nigel Farage. Which maybe a big part of why they are so hysterically attacked by the
MSM and establishment.
But sovereignty is important for the left too, and historically e.g. the older generations
social democrats here knew that. People like Helmut Schmidt realized that no people can be
free, and exercise its self-determination as a nation, without true sovereignty.
But the time of politicians of this class and caliber in the west is long gone. Maybe
another reason, why our politicians hate Putin so much. ;)
It should be obvious to anyone that we're going to see some kind of a joint Sino-Russian
military organization like NORAD. I was wondering about this after Russia sold their S-400 to
China. However, I'm not sure if the Chinese, or Russia, would be open to a Warsaw Pact
version 2. IMO, the inevitable collapse would be like the Soviet Union as WMDs will prevent a
war fought directly between the larger powers. In the meantime, expect more proxy wars fought
globally.
Kiza | Oct 4 2019 19:49 utc | 20:
It's always been like this as that is the most impressionable stage of one's life. I don't
know if this is an increase or not, but I see these useful idiots as activation of sleeper
cells cultivated in educational institutions.
The "Concert of Powers" was marked by numerous wars. Great power conflict in Europe was
avoided in favor of colonial wars. England against Indians, Africans and Asians, but Russia
against Turks too. So much for "truly mutually respectful..." relations. Putin speaks
gibberish. Today, "sovereign" means claiming the right to wage war at will. This is not a
premise for solid relationships, but shifting alliances against the current enemy.
It is incidentally highly unlikely that a basket of currencies could possibly substitute
for a single reserve. If people couldn't make bimetallism work, making bi-, tri-, poly-fiat
currency work isn't happening either. The fluctuations in relative value will destabilize the
financial systems of smaller powers.
Don
I don't see possibility of India getting a UNSC permanent seat any time coming soon, it's a
permanent wishful thinking on India's part. India will need to resolve her problems with
Kashmir and Pakistan before even she be considered. Indian realist analyst know this well. As
matter of fact I don't see any hope that anytime soon we can see a structural change in UN.
It's more possible UN be dissolved like the League was before it be reformed. US and India
only can be short term tactical allies against China, and not even strategic allies since
they both have different postures toward the subcontinent's, Indian Ocean states.
Exactly, which is why I am both confused and frustrated by people taking a side in the
Ukraine-gate farce. Does it matter which flavor of evil is currently provably less corrupt?
They all have almost the same goals: peanuts and platitudes to placate the peasants at home
and Full Spectrum Imperial Dominance abroad. I get trying to figure out the Gordian Knot, but
the Make Believe of Good Cop/Bad Cop is annoying.
- Wars like WW 1 & WW 2 are not going to happen anymore because such wars have simply too
expensive. But instead we'll see a series of smaller wars or proxy wars.
I should think that one reason for the failure of the Second Concert of Europe was that
Britain was determined to eliminate Germany as an economic and political rival and as an
example of what centralised government economic and social planning could do to improve
people's lives and the conditions in which they lived and worked. The reforms that Bismarck
brought to Germany, if only to keep 1848-style revolutions at bay, challenged the prevailing
laissez-faire economic policies (precursor to neoliberalism in our day) in Britain that
favoured the landowning and military elites.
The period 1871 - 1914 was one in which British aristocracy "revitalised" itself (for want
of a better term) by taking brides from American families that made their wealth from
investing in railway development across the US and in new American industries. (Perhaps
"vampirising" American money is the better term.) The classic examples of such marriages are
those of Consuelo Vanderbilt, of the wealthy Vanderbilt family, marrying into the
Spencer-Churchill family; and of Winston Churchill's mother marrying his father. Acquiring
American wealth in this way was one way in which British elites could maintain enough power
to keep a grip on British politics and British colonial politics.
The same period was also one in which European powers competed to chop up Africa and Asia
into colonies or "spheres of influence". So in a sense, the Europeans were already at war
with each other (and the Second Concert was a facade, just as the Cold War of the late 20th
century was a facade): they conducted this war away from their own publics, in areas distant
and remote enough, that most incidents of mass violence or outright land theft could be
covered up. The major exception was Belgian King Leopold's treatment of the area that is now
the Democratic Republic of Congo / Congo (Kinshasa) as he ruled it in the manner of a
mediaeval feudal lord and the atrocities committed there by his government were on a scale
too huge to ignore.
@Paul Damascene #9
Not strictly true.
Two nations, one with sword and shield but the other with only a shield. The first nation can
attack with little fear of reprisal.
Russia is still not going to sell defensive weapons to anyone unless there is a clear overall
strategic benefit.
Ironic that the Great War had to wait until 1914, when Britain's Liberal government was
adopting many of Bismarck's social welfare measures.
I suspect that America's increasing hostility to China reflects a fear of contagion from
the more successful and fairer Chinese system. Just like Britain and Germany in 1914.
Two are listed as being good for target velocity up to 6,415 mph which is well into
hypersonic range.
Another two, target velocities up to 11,185mph - mach 14.7 according mph to mach
converter.
Helmut Schmidt's books on China are impressive, but it's striking that in the first one,
"Nachbar China," of 2006, he totally failed to anticipate the economic collapse of 2008.
Actually, that's not true. When the UK went to war in 1914, they discovered that their
soldiers were so undernourished and unfit to fight for the Empire, that a series of 'social
reforms' were enacted to improve the lot of the working class (or cannon fodder).
"While China has capable weapons and can defend itself against a smaller attack the U.S. has
about 20 times more nuclear warheads than China. It could use those in an overwhelming first
strike to decapitate and destroy the Chinese state."
B, I read your analysis of the China weapons parade and came away with the impression that
US air & sea superiority was over. I thought China already had the S-400 too. I had no
idea that the US was in possession of more nukes than China. I hope that China gets that
system set up quickly, as well as the S-400.
The US is a psychopathic control freak, whose mask has slipped, yet the only one who
doesn't know that is Washington, but when it realizes it, that's when it will become far more
dangerous and may think that their time for a US first nuke strike is running out. Let's hope
they are not that stupid.
Anybody that believes China have only 290 nukes are naive.
Look at all those DF-41 and JL-2/3 missiles they've made. Some of those missiles have MIRV
capability.
What point does lying that way about a deterrence weapon serve? China only has nukes to
deter America from attacking them. The nukes are not intended to ever actually be used, so
why would they lie and pretend to have less than they really have? That makes no sense. If
anything they would lie and pretend to have more than they really do to enhance their
deterrence.
Secret weapons do not make an effective deterrence.
On the other hand, like Japan China probably has big stockpiles of fissile materials
sufficiently enriched that they could make many hundreds of additional nukes in a matter of a
couple weeks, or maybe even just days, if they needed to.
Just to clarify, a 100kg solid chunk of iron traveling at hypersonic speeds and with
decent accuracy would ruin the day for an American aircraft carrier. No nuke is needed.
Furthermore, if China has only 290 nukes, but 5,000 launch vehicles, which ones out of
that 5,000 are armed and have to be destroyed if America does a first strike and wants to
avoid several dozen of its biggest cities being turned into glowing craters in response?
Hint: All 5,000.
So you see, China doesn't really need much more than 290 nukes to prevent America from
attacking, assuming Americans are not stupid. Unfortunately that could very well be a losing
bet.
Washington is not a nation. It is only a city. If the rest of the world wants an honest
glimpse of what this city intends, all it has to do is look at what it has done, and is still
doing, to America's population. Take an honest look, disregarding all testimony. When you
completely disregard the narrative of dc and the media, the picture becomes quite stark quite
quickly.
The reason for the constitutional crisis in Britain in 1910, which resulted in the House of
Lords losing most of its power, was that the Lords refused to approve Lloyd George's People's
Budget, which, according to Wikipedia, "introduced unprecedented taxes on the lands and
incomes of Britain's wealthy to fund new social welfare programs." The upshot of the crisis
was that the budget became law.
. . . picked this up on the web:
In his seminal work On War, Carl von Clausewitz famously declared that, in comparison to the
offense, "the defensive form of warfare is intrinsically stronger than the offensive."
The defender being in his homeland contributes to defensive strength. It's certainly
contributed to US offensive failures in the last fifty years. It took the mighty US Army four
years and over a thousand deaths to pacify Baghdad. So what to do, the US has reverted to
high-level aerial bombing and long-range artillery to kill foreigners. This increases US
opposition, creating more enemies. No shortage of them.
Gotta give you a big Shout-Out for providing that ultra important fact as that marked the
beginning of the reaction to Classical Economists in the UK which was already happening
within the Outlaw US Empire, thus the seed of UK's Neoliberalism was planted and watered. It
also brought the UK and US elite together mind-set-wise.
Josh @51--
Your observation is 100% on the mark! The utterly gross neglect of the USA's human
capital's been ongoing for decades, and was given a great boost by the adoption of
Neoliberalism as basic policy during Carter's presidency, which was subsequently turbocharged
by Reagan/Bush. Profit before people had always been present; but after the "Saving the
bond-holders" deliberately deep recession caused by Volker from 1979-1982, there would be no
more policies aimed at improving social welfare. Instead, they were targeted for destruction
as the Full Employment Act of 1946 was 100% ignored by both Rs & Ds as jobs went offshore
and the Rust Belt oxidized.
--//--
Today, the hollowed-out Outlaw US Empire is a mere Paper Tiger reduced to using terrorists
and terrorism as its policy tools. Slowly, the nations of the world are enacting a de facto
form of containment that will eventually result in the diminishment of The Empire's abilities
and force it to become a normal nation for the first time in its history--hopefully without a
nuclear conflagration.
Putin is a voice of reason in a very sick and twisted world, one that is dominated by an evil
empire whose only purpose seems to be global corporate hegemony.
@2 Red Ryder - Russia is building a network of missile defense, early warning, electronic
weapons systems that will ring Greater Eurasia, not just the Russian Federation.
Always good to see your sweeping strategic view from the commanding heights. I quoted your
opening sentence because it makes such total sense, and also sounds so good. Mackinder has no
need to turn in his grave - the heartland has upended the world to save him the trouble
;)
There will be the invulnerable Eurasia, and the outside.
~~
I'm enjoying all the comments jumping onto the notion of Mutual Assured Defense. It seems
a concept that many here can readily relate to - and sign me up for sure. Thanks to Paul
Damascene for the concept, and uncle tungsten for coining the phrase.
Sharmine Narwani in her recent interview with Ross Ashcroft cited a Twitter comment
somebody made, to the effect that the S-400 was Russia's foreign policy. She was struck by
how perfectly this actually works as a policy. In a world where everybody has an S-400, no
war. Mutually assured defense.
I have long theorized, without a grain of collateral to prove it, that there is only one
security strategy for Russia. If I had a border as extensive as Russia's, I would see that
the only security possible for me would rest in an entire world at peace.
Therefore Russia works towards peace. It's how she conquers the world. As we saw in
Chechnya and in Syria, Russia builds and not destroys. Syria in particular over a long period
showed us precisely how Russia fights - not to "win", not to destroy an enemy, but purely to
lock down the peace and make everything safe. Only those restless souls who would not become
still were killed.
China too shares this same understanding of the Tao - not surprisingly of course. The game
is not to crush the opponent but to render the fight unnecessary. If China conquers the world
it will mean the Mandate Of Heaven has come to rule everywhere. The fight will become
unnecessary.
~~
Federico Pieraccini in his latest
article had this to say about China's strategy:
Beijing's strategy seems to be designed to progress in phases, modulating according to the
reaction of the US, whether aggressive or mild; a kind of capoeira dance where one never
actually hits one's opponent even when one can.
I had to look it up, Brazil's amazing contribution to world peace, the capoeira. I had
never heard of it and now I will never forget it. A brilliant comment from Pieraccini.
Peace is coming to the world faster than war is being left room to break out. And this is
because peacemaking is as dynamic an activity as warmaking . But by its very
nature of not breaking things, it is far less visible.
. . .from Putin
Truly mutually respectful, pragmatic and consequently solid relations can only built between
independent and sovereign states.
. . .from the UN Charter
The Organization is based on the principle of the sovereign equality of all its Members.
Putin is pointing backwards not forwards when you think it through.
No "souvereign" state can be independent in the age of global supply chains and markets,
refugees and global warming. The world is interdependent and always has been since the
evolution of the human species in Africa.
"Souvereignty" and statehood has always been achieved (and lost) by military power. It is
a recipe for war.
This is for the theory. Now for the practice. Of course, Russia has been intervening in
the affairs of other "souvereign" states. Of course Iran has been striving for dominance in
the Middle East. And of course Eastern European states feel squeezed between Russia, the US
and Germany. And of course China pressures Vietnam for the resources of the South China
Sea.
Putin is talking about being polite.
Europe will have neither economic nor political or military power dealing with Russia, the
US or China as individual "sovereign" states. And this is what this populist dance is
about.
The US has not lost influence because of the sanctions, they have lost influence because
they have no longer the technological edge and "souvereign states" have the alternative of
allying with Russia and China. That is a binary choice, not souvereinty.
ciue @ 41:
An intelligent observation, thanks. Though I find myself wondering if the world in which
everyone has a shield, and only one, a sword, is not, perhaps, a world quite changed.
In reading Don Bacon @ 58 and Grieved @ 57, something slid into place for me. As a child
of the Enlightenment, pained as I have been--for all its failings--to see it slip under the
waves, it has been especially painful to see the West despoiling its legacies of democracy
and universal human rights. Nothing has done these more damage than our corrupt, cynical
exploitation of them. When I look to the emergent multipolar model with not inconsiderable
relief, I see it as one in which democracy will not necessarily be a central value or form of
polity.
But if this multipolar principle of the sovereign equality among all of its members is
considered from a certain vantage point, the principle's equivalent in a democratic system of
individuals would be an acceptance of its various citizens as of fundamentally equal worth
regardless of their ideologies or beliefs.
Perhaps if that feature of our own systems were not so close to being lost, a glimpse of
this quality of an international comity wouldn't come to me now as a revelation.
I guess it is a Rorschach test. I don't see how anything in Syria has been resolved
peacefully, I just don't. I am not blaming Russia for it. Putin virtually waited until it
became clear that the US (Obama) would not intervene.
Russians had the worst WWI and WWII experience, plus Chechnya and Afghanistan. No Russian
leader would be able to motivate them for anything else but defense. It took the Moscow
apartment bombings to motivate them for the Chechen war.
weaponized economics USA says it has ability to affect the economic environment, says it can
influence international financial institutions .. says it can use such abilities and
influence to cement multinational coalitions for unconventional warfare campaigns or dissuade
adversary nation-state governments from supporting competitors"
financial blackmail .[nations either join/suffer], the stores of value can be exploited..
the economic space is a war zone the tax, interest rates, legal and bureaucratic measures
used locally, by target states, can be [manipulated] to persuade adversaries, allies, and
surrogates to modify their behavior.. Entire agencies specialize in identifying.
opportunities where financial weapon(s) can be used to provide leverage [to achieve goals]?
Thank you Sally Snyder @ 7 for that link and great explanation. I want to add that I see
evidence the USA uses that same strategy domestically against the leaders of its states, its
cities, its counties, its political parties and privately against the leaders and activist
the world over. Americans rarely have the opportunity you afforded @7 to understand why
things are happening in the USA the way they are.
new subject:
The Great War had to wait until 1914, when Britain's Liberal government was adopting many of
Bismarck's social welfare measures.to Lysias @ 43 <==I certainly do agree with your
reason.. Consider the following
The great war was on hold since 1897, waiting on the British and French bankers to
create a means to finance the war. That financing required the warriors in Europe to
invade and overthrow the US Constitutional prohibition (Article I, Section 9, paragraph 4)
which prohibited Capitation or other direct taxes, not based in proportion to the population.
Amendment 16 ratifed on February 3, 1913 reads, the Congress shall have power to lay and
collect taxes on incomes, from whatever source derived, without apportionment among the
several states, and without regard to any census or enumeration.
Within minutes after the US. Supreme court took up taking non proportional taxes from the
pockets of working Americans the privately owned Federal reserve bank was created, and made
by congress the central bank of the world (1913). So to recap, British adoption of Bismarck's
measures had little to do with the war in Europe, instead it was the the money to be taken by
taxation from the pockets of every American that satisfied the bankers requirement of
suitable and ample capital (Federal Reserve Act of 1913); USA taxes on Americans would
collateral the FR lending, and the USA would guarantee the taxes would be collected and
rendered as required. Once constitutional intent was thwarted, the federal Reserve could lend
to the global warriors who wanted to destroy Germany and take the oil rich land (entire
Middle East) from the Ottoman. It took two world wars and trillions of tax dollars, not to
mention millions of lives, for the pubic nations states to enable the private theft of the
oil rich Middle East lands owned by the Ottomans.
additionally .. Barovsky responded also to lysias @ 43 with "Actually, that's not true.
When the UK went to war in 1914, they discovered that their soldiers were so undernourished
and unfit to fight for the Empire, that a series of 'social reforms' were enacted to improve
the lot of the working class (or cannon fodder).by: Barovsky @ 46
@ somebody 61 I don't see how anything in Syria has been resolved peacefully, I just don't.
Russia's strategy of giving foes a choice of fighting or being bused elsewhere, a choice they
took, was a truly unique peaceful resolution. Never been done before, to my knowledge.
Revolutionary. Wonderful. Peaceful. I liked it.
If I may: A big part of national strategy is to have the populace focusing on "foreign
threats" which takes citizens' minds of their domestic problems. Part of "sovereign equality"
is (at the national level) to mind our own business, not somebody else's.
George Washington dedicates a large part of his farewell address to discussing foreign
relations and the dangers of permanent alliances between the United States and foreign
nations, which he views as foreign entanglements.
Later, we have "War is the Health of the State"
by Randolph Bourne (1918) . . here
". . .The republican State has almost no trappings to appeal to the common man's emotions.
What it has are of military origin, and in an unmilitary era such as we have passed through
since the Civil War, even military trappings have been scarcely seen. In such an era the
sense of the State almost fades out of the consciousness of men. With the shock of war,
however, the State comes into its own again. The Government, with no mandate from the people,
without consultation of the people, conducts all the negotiations, the backing and filling,
the menaces and explanations, which slowly bring it into collision with some other
Government, and gently and irresistibly slides the country into war. . ."
I think we are seeing more like russia/china using a strategy similar to Muhammad Ali's rope
a dope against the u.s. They are both spending their money wisely on building effective
military forces, both defensive and offensive, but they are not wasting their treasure on
imperialist adventures. At the same time, everywhere U.S. has tried to corner a market or
extend itself, they have been getting cut off at the knees by either Russia or China. Russia
put a monkey wrench in U.S. goals in Ukraine, Syria and Venezuela. U.S. went after Iran and
China stepped in with a huge oil purchase and development project. Now I'm reading that
Russia is getting ready to assist Cuba in a major way.
Was it napoleon who said, "when you see your enemy making mistakes, let him"? (paraphrase)
I think they are going to continue trying to avoid a fight while they wait for the U.S. to
either come to its senses, collapse or come to blows, but they won't be the instigator.
U.S. is capitalist and this kind of society is more likely to destruct through a financial
collapse or a civil war than declaring war on either China or Russia. Not that war with China
or Russia can be ruled out, but if it occurred I think it would probably start as a result of
U.S. accidental blowing something up with one of our smart missiles....
This (entertaining) article was written by some street fellow in ukraine around the time
Yanukovich was ousted, but the similarities between Ukraine and US shares a common
perspective of a lot of USA common folk. In usa,you don't ever get to own much (its all
leased or financed) and even if you do, its not hard for them to find a way to liberate it
from you.
I recall US journalist George Seldes remarking his observations as he met the UK
conscripts coming to the WW1 front. His on-the-scene notes of malnourishment and inability to
handle repetitive lifting of ammunition to feed mortars/small cannon, relative to German
conscripts, were telling. Explains the postwar emphasis on sports and diet just to prep for
the next war. Lessons perhaps also applied to American emphasis on spoprts may just be the
overt signs of underlying gov covert funding/subsidies and legislation enabling "league"
monopolies.
Why the understatement? It's the same reason why militaries don't showcase their latest
greatest hardware to the public. Secrecy provides maneuvering room and is only revealed when
appropriate. It's also about managing fear and public opinion in hopes of exerting some
influence over your adversary.
AFAIK, China have not officially stated their holdings. The 290 figure is really an
estimate given by various NGOs.
Time is on the side of the new eastern powers, that is, with each passing month the US
military (& economic) superiority shrinks.
I think that is why China has been able to exercise such restraint with HK, they can put up
with the tantrums till 2047.
The big danger is if those who own the USA try to use their advantage before they lose
it.
They already assume
that an apocalypse is inevitable;
When the elite retreat to bunkers and private islands in Hawaii, New Zealand, Tasmania or
Patagonia
, their main concern is how to keep the deplorable's grubby hands off their stuff when the
shit finally hits the fan.
...re China's invention of gun powder. IIRC Marco Polo brought it back to Europe in 1400s at
a time when China had already advanced it to hand-held-cannon status.
Note well that Europe itself was already in an advanced state of acquisitive madness, as
much as could be enabled by formations of swords and horses occasionally being an
overwhelming weapon .
With gunpowder, force-of-arms were now an overwhelming weapon in far more areas of the
continent.
Then, and only then, could a Columbus et al have set out on voyages of discovery with
confident ability to claim any "new" lands for some king who would fund the mission.
I submit, there is no way a Columbus could set-sail unless he had on-board such
overwhelming weapons.
Else, landing anywhere without such would only permit some sly smiling and trading and
scouting. Any overtly aggressive landing party would be slaughtered by the sheer numbers of
home-team locals.
Re "power corrupts; absolute power corrupts absolutely", gunpowder was the 1st
overwhelming weapon that enabled conquest.
The 2nd overwhelming weapon was the atom-bomb. But IMO, some heroic figures understood
the ramifications its overwhelming-nature; thus they felt motivated to force its sharing, bec
a monopoly guaranteed its use to permit limitless conquering.
Then at that point, science was funded by .govs to invent the next overwhelming weapon
and use it before any delicious target could duplicate it. We are here.
Lavrov: "Those with a more or less politically mature opinion of the situation should have
realised long ago that the sanctions don't work in the direction they wanted them to
work."
Oswald Spengler is good here. What he called Western 'money-thinking' is moving at the moment
in contrary, self-extinguishing, directions. Full spectrum dominance, bankrolled by reserve
currency status, seeks the whole enchilada and potentially once had the wherewithal to
achieve it --if not for the punitive subtractions necessitated by sanctions regimes.
Compounding matters, the exiled nations, having escaped the comforts of the lab, develop
fearsome powers of self-reliance (what North Korea proudly calls juche). Banded together,
these hardened exiles will some day go on to decimate the King's Army:
"Spengler, more poet than historian, offers the penetrating eye of the stranger. His
prescience for the Russian destiny is paraphrased by Kerry Bolton here:
The Russian soul is not the same as the Western Faustian, as Spengler called it, the
'Magian' of the Arabian civilization, or the Classical of the Hellenes and Romans. The
Western Culture that was imposed on Russia by Peter the Great, what Spengler called
Petrinism, is a veneer The Russian soul expresses its own type of infinity, albeit not that
of the Westerner's Faustian soul, which becomes enslaved by its own technics at the end of
its life-cycle."
Many of those 'technics' fall under what Spengler called "money-thinking". At the
twilight of its life-cycle the West threatens to withhold its toxicity from all those who
don't 'play fair', plying its financial sanctions like an overused tool-set: fractional
reserve banking, impudent debt-money that arrives ex nihilo seeking its keep from
God-knows-where, leverage that belabors ever-narrowing denominators of intrinsic
value."
The Western debt pyramid can ill-afford meting out the punishment of exile. On the
contrary it needs everything on Earth plus the minerals of passing meteors and Martian water.
However its petulance and hubris can't resist banishing nations that displease it. When its
petulance exceeds its own diminishing critical mass, the seesaw tips against it.
Re ""power corrupts; absolute power corrupts absolutely", gunpowder was the 1st overwhelming
weapon that enabled conquest."
The history of empires is as long as the history of agriculture and herding, nearly ending
with the advent of nuclear weapons and MAD.
Only one country left trying that needs some sense knocking into it.
I don't think the bussing to Idlib was Russian strategy. The Syrian civil proxy war was a
lot about demographics, Hezbollah tried to save Shiites from mixed areas, dito the Syrian
state with their supporters. It was a local solution that was necessary as Jihadi fighters
come with huge families. Turkey might have had a part as their interest was to have the
Jihadis at the border to fight against the Kurdish groups. You may have noticed that the
Syrian government with support of Russia now attacks the Jihadi fighters in Idlib.
Russia's strategy was to force Turkey on its side without alienating Iran or Syrians. Iran
at one stage seemed ready to support a religious power share the type of Lebanon. The Russian
intervention stopped that idea.
Russia saved the Syrian state and the Syrian state insisted on being secular and getting
rid of all internal ennemies. That is a kind of peace but the peace of the graveyard.
Actually it is quite funny that Putin has started to go back to the 19th century, to
"development models, interests, cultures and traditions " and the "concert of power".
After the Congress of Vienna there was the Russio-Persian war, the Russio-Turkish war, the
battle of Warsaw against Poland, the Crimean war against the Ottoman empire, Britain and
France, advancement in Central Asia and one of the tsars banned Ukrainian language in print.
Never mind the tsars successfully fighting the rebellions of the Russian middle classes.
Though in 1861 Russian serfs were finally freed as they were needed in newly developing
industries. The century ended in 1900 with the Russification of Finland, making Russian the
official language.
@ Peter AU 1 who wrote about the history of empires
"
Only one country left trying that needs some sense knocking into it.
"
That is occurring as we write our textual white noise about the details but the approach is
not a Western knocking some sense into it but an Eastern Art of War approach.
It came to me today that instead of WWIII we need to think of what the world is going
through as a Civilization war or evolution, assuming we make it out the other side of the
conflict. The current empire is trying everything in its quiver of arrows short of MAD to
retain control over the form of social organization with private finance at its core.
But the social organization of the East does not think like that and wants to spread the
wealth and ownership broadly. The East has been taken advantage of and maligned by the West
for centuries and they are not going to continue to let that happen. So they have organized
themselves to beat the West at its own game but are doing so according to the Art of War meme
instead of trying to knock some sense into the West. Since the East is good at playing the
long game in relation to the West they are incrementally wearing down and constraining the
West until it collapses of its inability to bully and Might-Makes-Right itself forward.
As we are watching the end game of those efforts, IMO. I don't see the West holding its
control on empire for much longer because the East is giving example of a better and more
equitable way that will be and is winning over country after country that have been client
states of empire held in place by the jackboot of global private finance.
We are witnessing a Civilization war of our species and it is quite the spectacle, eh?
Another example of the ever sanctioning superpower is losing its status. "Whistleblower
accuses largest US military shipbuilder of putting 'American lives at risk' by falsifying
tests on submarine stealth coating" Another day, another example of failure of the MIC to
deliver.
Huntington Ingalls Industries, which spun-off from Northrop Grumman in 2011, "knowingly
and/or recklessly" filed falsified records with the Navy claiming it had correctly applied a
coating, called a Special Hull Treatment, to Virginia-class attack submarines which would
allow the vessels to elude enemy sonar, the Sept. 26 complaint alleges.
Instead, the complaint said, Huntington Ingalls' Newport News Shipbuilding facility in
Virginia took shortcuts that allegedly "plagued" the class of submarines with problems, and
then retaliated against the employee who spoke up about the issues. At this rate most of the
US navy will be tied up at their home port waiting for repairs.
According to the complaint, Lawrence, a senior engineer at Huntington Ingalls who has
worked there since 2001, has provided evidence of the alleged issues at the company's Newport
News Shipbuilding facility in Virginia. Stay safe Lawrence.
My thoughts also. And we do live in very interesting times for sure.
When I say knocking some sense into, that includes something along the lines of a soviet
style collapse which is the preferable option.
~By The Western debt pyramid can ill-afford meting out the punishment of exile.~
71 FSD
Yeah, it is curious. You would think, with an understanding of its own system - infinite
growth backed by debt - that empire would wisely choose to employ its tentacles, not deny
them. Especially with most states outside of North Korea being open for business in some
shape or form. At this rate the US Treasury will need to authorize the advance sale of
mortgages to the burgeoning colonies on the moon.
To navigate to the summit for the best part of a century. And to squander those gains
within the space of half a young lifetime.
Putin's concept of strong defense is sound. You don't attack if the other side can defend
itself. You negotiate. In Thailand, we rarely see street fights (except between drunk
foreigners).
Why? The national sport is lethal Muay Thai (kick boxing), so you never start a fight, since
the other side can fight, too. You talk it over, negotiate.
Lot of nonsense in this thread. From "gunpowder was the 1st overwhelming weapon that
enabled conquest." When it is trivially simple to argue that the trained, uniformed and
properly regimented Roman Army which came 1500 years earlier was both a better example and
likely not the first.
Equally facile is the claim that "It's the quest for power that corrupts" Whilst its
probably true that some have been corrupted reaching for power it is equally true that many
who for various reasons were not corrupted in the quest, either because they acquired it
through serendipity by way of hereditary or accident, came into power as naive or
ideologically principled upstarts yet as with every leader, they were corrupted by power as
they were convinced no one else could do it (be the bossfella) as well as they.
Emperor Claudius comes to mind as an earlyish big time boss destroyed by power, but callow
youths thrust into power as clan leader when dad and/or older bros were killed in battle and
went on to become bigger arseholes than Dad, are examples which go back to when us mob first
walked upright.
Barovsky
I quoted a sentence by chu teh and was replying to the piece about gunpowder.
As for the power corrupts part, take a look at the US prior to the fall of the Soviet
Union and then what it has become during the time it held virtually absolute power..
Yesterday night The Godfather was broadcasted in a foreign private channel....
I saw a comrade telling about that and arguing that this movie contains the world...and it
is that indeed it encompasses the history of the USA...
"I have "worked" all my life for the welfare of my family, and I have always refused to be
a puppet moved by the threads of the powerful. With you I had other projects Michael. I
thought that one day you could move those threads. Senator Corleone, Governor Corleone, or
more".
Even in the meeting of all the mafia families in New York for to reach a "pact of no
agression" someone states:
As for the power corrupts part, take a look at the US prior to the fall of the Soviet
Union and then what it has become during the time it held virtually absolute power
In the decades since the 1972 Watergate scandal, more charges of corruption have been
leveled against members of presidential administrations than in the preceding two
centuries. Perhaps the most lasting achievement of Ronald Reagan's presidency was the
astonishingly successful campaign to delegitimate government itself, at least in the eyes
of many citizens, and to enshrine individual economic self-interest, manifested in
unregulated "private enterprise," as the paramount value of American life. That
transformation, like the rise of so-called rational choice and utility maximization as the
governing paradigms in the social sciences, has encouraged citizens to seek wealth -- and
to avoid paying taxes or participating in civil society -- as the only sensible strategy.
As a result, the homely virtues of self-discipline, moderation, and reciprocity preached by
Enlightenment thinkers such as Benjamin Franklin, John Adams, and Abigail Adams now strike
many Americans as outmoded advice for suckers. If "greed is good," as the Wall Street
character Gordon Gekko asserted, then Donald J. Trump's career of swindling, debt dodging,
and tax evasion might serve as a model to emulate rather than an object lesson in the
mainstreaming of corrupt business practices.1
No one familiar with Alexander Hamilton, Roger "open the purses of the people" Morris or the
roots of the Shay's Rebellion, Whiskey Rebellion, North Carolina Regulator movement and other
people's movements and actions, or the 1787-88 counter-revolutionary coup carried out by the
Constitutional Convention for the purpose of centralizing economic and military power toward
social control and building a continental empire (anyone in any doubt about that should read
the proceedings and the Federalist Papers; Hamilton was especially forthcoming about the
imperial motivation), would have any illusions about how deeply corruption is inherent in the
US system.
Same for imperialism. And all subsequent US history starting and continuing with the
genocide of the First Nations bears this out.
With respect to sanctions, the EU central power ( i.e. Germany ) impossed harsh sanctions
that ended being implemented in full only by southern countries like Spain, who are those who
have seen their commercial excahnges with Russia diminished to the least with the conseuqent
loses for national business, while, in fact, German business continue their exchnage with
Russia as if nothing had happened...
Now that Trump impose import tariffs to Europe, the most affected are, again, those who
fulfilled the US sanctions plan towayds Russia at the letter, i.e. Spain and southern
countries...
If these Southern European Countries would have a sovereign government with any respect
for the people who vote them, they will extract the consequent lesson from all of this...and
would apply the recipe for all this with respect to Russia, Iran, and so on...
The lesson would translate like "the more you comply with US mandate on sanctions against
any other country you have nothing against, even at the price of harming badly your own
economy, the more sanctions/import tariffs will be impossed on yourself at the first
necessity...", which is the old lesson from primary school, "the more weak you would show in
front of a bully...more beating will come..., oor already in grown mafiosi, "more "special
tax" for "protection" to pay"...
Then it is Spain who hosts most of US nuclear deterrence and AFRICOM central command...If
Spain would have a sovereign government with a hint of respect for the people who vote it, an
ultimatum will be possed in front of the yankees, "eliminate import tariffs, stop meddling
with national economy, or pack your things and go home"
The Federal Reserve of the United States has injected about 278,000 million dollars in the
money market in four days. After injecting 53,000 million dollars earlier this week, the
Federal Reserve renewed these operations three times for astronomical amounts representing
75,000 million per day, and has already announced that it will continue to do so daily
until October 10.
The newspaper Le Figaro (1) describes as "astronomical" that jet of fiat money that,
however, does not seem to worry the New York Stock Exchange, with a Dow Jones index that
remained above 27,000 points throughout week. It is normal because, as the Efe agency says,
"Wall Street feeds on the flexibility of the Fed" (2), that is, the massive emissions of
paper money.
It has no different menu to nourish itself and, as specialists say, "the reasons that
lead to lower interest rates are usually not good."
The resistance of Wall Street is explained because these operations only affect the
interbank market, which is short of liquidity "temporarily". Banks that are financed on a
daily basis in this market would suffer a shortage of liquidity as a result of large debt
issues by the Treasury and a strong demand for liquidity from companies facing fiscal
maturities.
But there are more than enough reasons for speculators to worry. "The reasons may be not
only technical," says the newspaper. Some financial institutions have refused to make their
funds available to the market, indicating the possible vulnerability of a participant (bank
or companies) who may not be able to repay the amounts borrowed on a day-to-day basis. If
this situation is confirmed, which is synonymous with the loss of mutual trust in the
interbank market, it could be a more serious crisis than in 2008.
The President of the Federal Reserve, Jerome H. Powell, who took office in February last
year, has no different alternative. He has been a member of the board of governors of the
Federal Reserve since 2012 and knows nothing more than routine: since the late 1970s he is
the first president of the Federal Reserve that does not even have a bachelor's degree in
economics. Does he need it?
The question is whether the gigantic mass of fiat money that it has put into circulation
will be sufficient to avoid a collapse like that of 2007, or another even greater collapse
will occur.
Russ @ 86.. can you tell me more about the continental congress. where can the biographies
and histories be had which might shed some real light on John Hanson first president(1781-1783) of the
United States in Congress Assembled(1776-1789) .. and Samuel Huntington (Conn), and Thomas
McKeen (Delaware) and the others who were elected and served as Presidents of the
[Continental Congress<= the government that defeated the British and that existed between
1776 and 1789}, before the lobbyist imposed ratification to install the US Constitution {a
document that cut off (terminated) the right of self determination and denied bottom up
democracy to the people of the several nations that were in America at the time]. Before the
constitution, the people could and did impose democracy on those who were in charge of the
local, state and central governments (The Articles of Confederation, central government from
1776 to 1789] after the Constitution, [the governed were never heard from again. ]. ..
somebody @59 sez: ""Souvereignty" and statehood ... is a recipe for war."
This is the mindset of the hegemon (or the servant of hegemony, whatever). They cannot
even imagine "Truly mutually respectful, pragmatic and consequently solid relations"
between nations any more than they can imagine others seeking that. They assume that everyone
else is motivated to dominate as they are. They project their own damage from having been
born into an intensely competitive, egotistical, identity -obsessed culture onto the
rest of humanity out of sheer ignorance that things could possible be any different
elsewhere.
Western culture, with the purest expression being in the United States, exalts in the
individual. That sounds like a noble and wonderful thing on the surface, but the practical
effect is to atomize society into isolated and competing hermetic entities. Community is
displaced to accommodate the self. This environment favors the sociopath and the psychopath,
which is why in the West sociopaths and psychopaths most easily accumulate power and rise to
the tops of all of those societies' institutions. It is not surprising that those born into
such an environment imagine it to be the natural order and human nature because that is all
they know and experience.
But of course that is not human nature. The species would have died out far more than a
hundred thousand years ago if it were. Human nature is to build community, and given the
opportunity that is precisely what they do. Community, though, is a threat to the power of
the psychopaths who ascend to the top of capitalist society, so in all institutions in which
those psychopaths gain power they discourage and fight and dismantle community and replace it
with social order built around themselves.
This psycho-driven culture grew to dominate in the West because, like slave-based
societies before, it was economically progressive. Due to the immaturity of communication
technology, individual psychos could assemble and coordinate larger social organizations
directed at production than the population could naturally assemble on its own. But
technology progresses and naturally formed human communities grow in scale and scope over
time. This made slave-based economies obsolete, and is now in the process of obsoleting
psycho-centric economies. It should come as no surprise that this replacement is occurring
most rapidly in cultures where the psycho-centrism had not fully established itself.
Considering the above, my bet is that as we see China's BRI project mature in Africa, that
continent will experience a Renaissance of epic proportions, perhaps even dwarfing China's
accomplishments of the last half century. This is because African cultures are similar to the
Chinese and other Asian cultures in that they have not yet been fully assimilated into the
western worship of "individualism" , so their natural human tendencies towards
community-building are not yet corrupted and subverted.
If China's transition to the dominant progressive power on the planet doesn't shatter the
dangerous American myth of exceptionality, then big portions of Africa moving into first
world status surely will. That's still some decades away, but we should be able to see
undeniable signs of movement in that direction by about 2030 to 2040 (growth in industrial
output and movement up the value added chain, dramatic development of infrastructure, rapid
increases in academic attainment, significant declines in poverty, etc).
Naturally, that is something that few westerners, particularly Americans, can wrap their
heads around because they have a flawed (Hobbesian) understanding of human nature. As they do
with China now, westerners will deny the evidence from their own eyes with regards to Africa
for as long as they can.
wikipedia makes no mention of it but for a long time Thomas McKeen was famous as the villain
in William Cobbett's The Democratic Judge or The Equal Liberty of the Press.
McKeen was a very nasty piece of work-his origins in Delaware are coincidental
"...that is not human nature. The species would have died out far more than a hundred
thousand years ago if it were. Human nature is to build community, and given the opportunity
that is precisely what they do. Community, though, is a threat to the power of the
psychopaths who ascend to the top of capitalist society, so in all institutions in which
those psychopaths gain power they discourage and fight and dismantle community and replace it
with social order built around themselves..."
How true, if a little unfair to psychopaths.
Very interesting.
I don't think it's the use of fiat money itself that's so important but what it's used for.
The money you describe as being used to support Wall Street is a great example of the wrong
use. Supporting a derivative led financial speculation benefitting the 1% vs the belt and
road which is oriented to real economic development which would be a wise productive use of
fiat.
-------------
In a famous critical remark directed at China's heavy reliance on western-style, debt-led
growth – an anonymous author (thought to be Xi or close colleague), noted
(sarcastically) the notion that big trees could be grown 'in the air'. Which is to say: that
trees need to have roots, and to grow in the ground. Instead of the 'virtual', financialised
'activity' of the West, real economic activity stems from the real economy, with roots
planted in the earth. The 'Belt and Road' is just this: intended as a major catalyst to real
economics.When the music stops and the derivative structure starts unraveling showing
multiple claims on ownership who will prevail. I think that there's a new sheriff in town
with the power to back up the 'roots in the ground' team.Posted by: financial matters | Jan
22, 2019 8:46:28 AM | 100
The 1776 Constitution was on a vector. By contrast, the 1788 Constitution was designed to
foreclose any further democratic movement. On the contrary, its main vector was to
concentrate power and wealth up the hierarchy, and to help build an empire for this new
ruling class.] the empire class ...needed a constitution which would centralize government,
strongly concentrate it, turn it into a versatile and brutal weapon on behalf of finance
assaults, military aggression, and police repression. There's only one path forward: We must
resume the American Revolution. by Russ @ 90..
very interesting.. 2012 .. discussion.. your paper .thanks . but still no background on the
people who brought about the 1776 government. and who operated it between its inception 1776
and the Bankers coup that regime changed the 1776 government into the 1788 Constitution of
the United States of America.
As you said in your article, everyone should know about Article 6 in the constitution of the
United States of America (the 1788 government) it saved British and French Aristocracy
<=and kept in power the very people the Americans had sought to remove=> from the
Americans who fought the war. It says All Debts contracted and Engagements entered into,
shall be as valid against the US under this Constitution, as under the confederation (but no
where do I see court cases that say under the 1776 government, that claims to lands, granted
by foreign kings and Queens (land grant estates) were valid? In fact, what I see is that the
Articles of Confederation government was planning to deny title to, and confiscate the lands
which traced to the land grants (G. Washington owned half of West Virginia and all of
Virginia) and the AoC plan was to distribute the land grant lands so confiscated among the
people who lived in America equally?
@WG 91 . . . as we see China's BRI project mature in Africa, that continent will experience a
Renaissance of epic proportions
Yes, and they've got a head start:
African countries with GDP growth rates above 5% in 2018
Libya, Rwanda, Ethiopia, Ivory Coast, Djibouti, The Gambia, Senegal, Uganda, Burkina Faso.
Kenya, Guinea, Ghana, Egypt, Niger.
Also: China 6.5, US 2.8, France 1.5, Germany 1.4, UK 1.3 . . here
Lot of nonsense in this thread. From "gunpowder was the 1st overwhelming weapon that
enabled conquest."
Posted by: A User | Oct 5 2019 8:38 utc | 81
...re China's invention of gun powder. IIRC Marco Polo brought it back to Europe in
1400s at a time when China had already advanced it to hand-held-cannon status.
Posted by: chu teh | Oct 5 2019 4:51 utc | 69
Agree with the lot of nonsense bit, although there is also a lot of interest. It is true
that China discovered gunpowder, but not sure about the "hand-held-canon status". My version
of reality had it that due to differences of perspective between East and West, China
discovered gunpowder and used it for firecrackers, and (allegedly) never thought of using it
for weapons. Similarly knowledge of the configuration of the stars in relation to location
was discovered by the arabs, long before this knowledge was exploited by Europeans for
navigation. The claim being, that the practical Europeans put scientific discovery to use for
practical benefits while the East - which discovered important segments of that scientific
discovery long before - had "merely" put it to spiritual, cultural and other transcendent
uses.
I absorbed the above factoids (gunpowder and the stars) over half a century ago before I
would have looked at such claims sufficiently critically; to what extent such factoids might
be really true I am not quite sure, although I remain somewhat sceptical about the
"hand-held-canon" claim. The broader claim though about the application of scientific
discovery needs to be reexamined more impartially.
Ian2 @67: "Secrecy ... is only revealed when appropriate."
And the appropriate moment to reveal a strategic doomsday arsenal that only exists to
prevent attack is when that arsenal is fielded. This point is so obvious that it was raised
with humorous intent in the 1964 Kubrick movie Dr. Strangelove .
You only keep weapons systems secret that you intend to use in attacks in order to
surprise your victims. Since America is violently aggressive and regularly attacks other
countries, the US maintains this sort of policy. America is exceptional in this
regard, though. America's focus is on offensive weaponry to attack other countries
with, so keeping those weapons secret helps limit America's victims' abilities to prepare and
defend themselves. Military secrecy is therefore the tool of the aggressor intended to
facilitate sucker-punching its victims. Weapons intended to discourage such attacks
must be advertised loud and clear for their intended deterrence to succeed. This is
why Russia openly announces their new weapons and why China shows theirs off in parades.
China does not intend to use their nukes. They are not like America which is building
tactical nukes to make atomic weapons more palatable to use in practice. There are no
countries in the world that China has shown any interest in attacking anyway, unlike America
which maintains a list of target countries that it is working itself up to attacking.
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Japan has a shrinking population. Can you explain to me why on the Earth they need
economic growth?
This preoccupation with "growth" (with narrow and false one dimensional and very
questionable measurements via GDP, which includes the FIRE sector) is a fallacy promoted by
neoliberalism.
Neoliberalism proved to be quite sophisticated religions with its own set of True
Believers in Eric Hoffer's terminology.
A lot of current economic statistics suffer from "mathiness".
For example, the narrow definition of unemployment used in U3 is just a classic example of
pseudoscience in full bloom. It can be mentioned only if U6 mentioned first. Otherwise, this
is another "opium for the people" ;-) An attempt to hide the real situation in the neoliberal
"job market" in which has sustained real unemployment rate is always over 10% and which has a
disappearing pool of well-paying middle-class jobs. Which produced current narco-epidemics
(in 2018, 1400 people were shot in half a year in Chicago (
http://www.chicagotribune.com/news/breaking/ct-met-weekend-shooting-violence-20180709-story.html
); imagine that). While I doubt that people will hang Pelosi on the street post, her
successor might not be so lucky ;-)
Everything is fake in the current neoliberal discourse, be it political or economic, and
it is not that easy to understand how they are deceiving us. Lies that are so sophisticated
that often it is impossible to tell they are actually lies, not facts. The whole neoliberal
society is just big an Empire of Illusions, the kingdom of lies and distortions.
I would call it a new type of theocratic state if you wish.
And probably only one in ten, if not one in a hundred economists deserve to be called
scientists. Most are charlatans pushing fake papers on useless conferences.
It is simply amazing that the neoliberal society, which is based on "universal deception,"
can exist for so long.
Infectious Narratives in Economics
By Robert Shiller - Bloomberg
"Narrative EconomicsHow Stories Go Viral & Drive Major Economic Events"
Concerns that inventions of new machines powered by water, wind, horse, or steam, or that
use human power more efficiently, might replace workers and cause massive unemployment have
an extremely long history, going back to ancient times. Aristotle imagined a future in which
"the shuttle would weave and the plectrum touch the lyre without a hand to guide them." In
such a world, "chief workmen would not want servants, nor masters slaves," he concluded.
Still, it wasn't until the 19th century, an era that brought innovations such as the
water-powered textile loom, the mechanical thresher, and the Corliss steam engine, that
concerns about technology-based unemployment took center stage. The narrative was
particularly contagious during economic depressions when many were unemployed.
The phrase "technological unemployment" first appeared in 1917, but it started its
epidemic upswing in 1928. The count for "technological unemployment" skyrockets in the 1930s
in Google Ngrams, tracing a hump-shaped pattern, rising through time for a while and then
falling, much as is regularly seen with infection diseases. The "technological unemployment"
curve peaked in 1933, the worst year of the Great Depression.
Frequency of Appearance
Appearances in books, as a share of all words
[Graph]
It is curious that the narrative epidemic of technological unemployment began in 1928, a
time of prosperity before the Great Depression. How did the epidemic start? In March 1928,
U.S. Senator Robert Wagner stated his belief that unemployment was much higher than
recognized, and he asked the Department of Labor to do a study. Later that month the
department delivered the study that produced the first official unemployment rates published
by the U.S. government. The study estimated that there were 1,874,030 unemployed people in
the United States and 23,348,602 wage earners, implying an unemployment rate of 7.4%. This
high estimated unemployment rate came at a time of great prosperity, and it led people to
question what would cause such high unemployment amidst abundance.
A month later, the Baltimore Sun ran an article referring to the theories of Sumner H.
Slichter, who in later decades became a prominent labor economist. In the article, readers
are told that Slichter noted several causes of unemployment but said technological
unemployment was "at present the most serious." The reason: "We are eliminating jobs through
labor-saving methods faster than we are creating them." These words, alongside the new
official reporting of unemployment statistics, created a contagion of the idea that a new era
of technological unemployment had arrived. The earlier agricultural depression, with its
associated fears of labor-saving machinery, began to look like a model for an industrial
depression to follow.
Stuart Chase, who later coined the term the "New Deal," published Men and Machines in May
1929, during a period of rapidly rising stock prices. The real, inflation-corrected, U.S.
stock market, as measured by the S&P Composite Index, rose a final 20% in the five months
after the book's publication, before the infamous October 1929 crash. But concerns about
rising unemployment were apparent even during the boom period. According to Chase, we were
approaching the "zero hour of accelerating unemployment":
Machinery saves labour in a given process; one man replaces ten. A certain number of these
men are needed to build and service a new machine, but some of them are permanently
displaced. If purchasing power has reached its limits of expansion because
mechanization is progressing at an unheard of rate, only unemployment can result. In other
words, from now on, the better able we are to produce, the worse we shall be off.
This is the economy of the madhouse.
This is significant: The narrative of out-of-control unemployment was already starting to
go viral before there was any sign of the stock market crash of 1929.
During the week before the October 28–29 stock market crash, a national business
show was running in New York in a convention center (since demolished) adjacent to Grand
Central Station that many Wall Street people passed through to and from work. The show
emphasized immense progress in robot technology in the office workplace. After the show moved
to Chicago in November, the following description appeared in the Chicago Daily Tribune:
Exhibits in the national business show yesterday revealed that the business office of the
future will be a factory in which machines will replace the human element, when the robot --
the mechanical man -- will be the principal office worker.
There were addressers, autographers, billers, calculators, cancelers, binders, coin
changers, form printers, duplicators, envelope sealers and openers, folders, labelers, mail
meters, pay roll machines, tabulators, transcribers, and other mechanical
marvels.
A typewriting machine pounded out letters in forty different languages. A portable
computing machine which could be carried by a traveling salesman was on exhibit.
By 1930 the crash itself was often attributed to the surplus of goods made possible by new
technology. According to the Washington Post, "When the climax was reached in the last months
of 1929 a period of adversity was inevitable because the people did not have enough money to
buy the surplus goods which they had produced."
Fear of robots was not strong in most of the 1920s, when the word robot was coined.
Historian Amy Sue Bix offers a theory to explain why this was so: The kinds of innovations
that received popular acclaim in the 1920s didn't obviously replace jobs. If asked to
describe new technology, people would perhaps think first of the Model T Ford, whose sales
had burgeoned to 1.5 million cars a year by the early part of the decade. Radio stations,
which first appeared around 1920, provided an exciting new form of information and
entertainment, but they did not obviously replace many existing jobs. More and more homes
were getting wired for electricity, with many possibilities for new gadgets that required
electricity.
By the 1930s, Bix notes, the news had replaced stories of exciting new consumer products
with stories of job-replacing innovations. Dial telephones replaced switchboard operators.
Mammoth continuous-strip steel mills replaced steel workers. New loading equipment replaced
coal workers. Breakfast cereal producers bought machines that automatically filled cereal
boxes. Telegraphs became automatic. Armies of linotype machines in multiple cities allowed
one central operator to set type for printing newspapers by remote control. New machines dug
ditches. Airplanes had robot copilots. Concrete mixers laid and spread new roads. Tractors
and reaper-thresher combines created a new agricultural revolution. Sound movies began to
replace the orchestras that played at movie theaters. And, of course, the decade of the 1930s
saw massive unemployment in the United States, with the unemployment rate reaching an
estimated 25% in 1933.
It is difficult to know which came first, the chicken or the egg. Were all these stories
of job-threatening innovations spurred by the exceptional pace of such innovations? Or did
the stories reflect a change in the news media's interest in such innovations because of
public concern about technological unemployment? The likely answer is "a little of both."
The "labor-saving machines" narrative was strongly connected to an underconsumption or
overproduction theory: the idea that people couldn't possibly consume all of the output
produced by machines, with chronic unemployment the inevitable result. The theory's origins
date to the 1600s, but it picked up steam in the 1920s. It was mentioned in newspaper
articles within days of the stock market crash of October 28–29, 1929.
The real peak of these narratives was in the 1930s, during which time they appeared five
times as often as in any other decade, according to a search of Proquest's database of
newspapers.
The topic now appears largely in articles about the history of economic thought, but it is
worth considering why it had such a strong hold on the popular imagination during the Great
Depression, why the narrative epidemic could recur, and the appropriate mutations or
environmental changes that would increase contagion.
Today, underconsumption sounds like a bland technical phrase, but it had considerable
emotional charge during the Great Depression, as it symbolized a deep injustice and
collective folly. At the time it was mostly a popular theory, not an academic theory.
In the 1932 presidential campaign, Franklin Roosevelt ran against incumbent Herbert
Hoover, who had been unsuccessful with deficit spending to restore the economy. Roosevelt
gave a speech in which he articulated the already-popular theory of underconsumption. His
masterstroke was putting it in the form of a story inspired by Lewis Carroll's famous
children's book Alice's Adventures in Wonderland. In that book, a bright and inquisitive
little girl named Alice meets many strange creatures that talk in nonsense and
self-contradictions. Roosevelt's version of this story replaced his opponent with the
Jabberwock, a speaker of nonsense:
A puzzled, somewhat skeptical Alice asked the Republican leadership some simple
questions.
Will not the printing and selling of more stocks and bonds, the building of new plants and
the increase of efficiency produce more goods than we can buy? No, shouted the Jabberwock,
the more we produce the more we can buy.
What if we produce a surplus? Oh, we can sell it to foreign consumers.
How can the foreigners buy it? Why we will lend them the money.
Of course, these foreigners will pay us back by sending us their goods? Oh, not at all,
says Humpty Dumpty. We sit on a high wall called a tariff.
How will the foreigners pay off these loans? That is easy. Did you ever hear of a
moratorium?
On the face of it, underconsumption seemed to explain the high unemployment of the Great
Depression, but academic economists never seriously embraced the theory, which had never been
soundly explained.
The massive unemployment caused by the Great Depression set off serious social problems.
For example, in the United States it caused the forced deportation (then called repatriation)
of a million workers of Mexican origin. The goal was to free up jobs for "real" Americans.
The popular narrative supported these deportations, and there was little public protest.
Newspaper reports showed photos of happy Mexican Americans waving goodbye at the train
station on their way back to their original home to help the Mexican nation.
The dial telephone also played an important part in narratives about unemployment and the
associated underconsumption. During the Great Depression, there rose a narrative focus on the
loss of telephone operators' jobs, and the transition to dial telephones was troubled by
moral qualms that by adopting the dial phone one was complicit in destroying a job. Three
weeks after dial phones were installed in the U.S. Senate in 1930, Senator Carter Glass
introduced a resolution to have them torn out and replaced with the older phones. Noting that
operators' jobs would be lost, he expressed true moral indignation against the new
phones:
I ask unanimous consent to take from the table Senate resolution 74 directing the sergeant
at arms to have these abominable dial telephones taken out on the Senate
side . I object to being transformed into one of the employees of the
telephone company without compensation.
His resolution passed, and the dial phones were removed. It is hard to imagine that such a
resolution would have passed if the nation had not been experiencing high unemployment. This
story fed a contagious economic narrative that helped augment the atmosphere of fear
associated with the contraction in aggregate demand during the Great Depression.
The loss of jobs to robots (that is, automation) became a major explanation of the Great
Depression, and, hence, a perceived major cause of it. Even if the man hasn't lost his job
yet, he will consume less owing to the prospect or possibility of losing his job. The U.S.
presidential candidate who lost to Herbert Hoover in 1928, Al Smith, wrote in the Boston
Globe in 1931:
We know now that much unemployment can be directly traced to the growing use of machinery
intended to replace man power. The human psychology of it is simple and
understandable to everybody. A man who is not sure of his job will not spend his money. He
will rather hoard it and it is difficult to blame him for so doing as against the day of
want.
Albert Einstein, the world's most celebrated physicist, believed this narrative, saying in
1933 that the Great Depression was the result of technical progress:
According to my conviction it cannot be doubted that the severe economic depression is to
be traced back for the most part to internal economic causes; the improvement in the
apparatus of production through technical invention and organization has decreased the need
for human labor, and thereby caused the elimination of a part of labor from the economic
circuit, and thereby caused a progressive decrease in the purchasing power of the
consumers.
By that time, people had begun to label labor-saving inventions as "robots," even if there
were no mechanical men to be seen. One article in the Los Angeles Times in early 1931, about
a year into the Great Depression, said that robots then were already the "equivalent of 80
million hand-workers in the United States alone," while the male labor force was only 40
million.
Though the technological unemployment narrative faded after 1935 (as revealed by Google
Ngrams), it did not go away completely. Instead, it continued to exert some influence in the
runup to World War II, until new narrative constellations about the war became
contagious.
Many historians point to massive unemployment in Germany to explain the accession to power
of the Nazi Party and Adolf Hitler in the election of 1933, the worst year of the Depression.
But rarely mentioned today is the fact that a Nazi Party official promised that year to make
it illegal in Germany to replace men with machines.
To go viral again, the labor-saving machines narrative needed a new twist after World War
II, a twist that could seem to reinforce the newly rediscovered appreciation of human
intelligence, and, ultimately, of the human brain. The narrative turned to the new
"electronic brains" -- that is, computers.
The decrepitating of the world's society can be traced back to the crap, contemporary
economics, the purview of the Ivy league. Somehow, labor arbitrage was accepted as a worthy
objective. America lost it's way.
(2) This is not Capitalism, this is Neoliberalism.
But with those minor modifications you point stands: "The real trouble with Neoliberalism:
bought/corrupt economists" ... "And this means that [neoliberal/neo-classical] economics is
proto-scientific garbage."
Here is an extended quote from your comment so that people can more fully appreciate this
line of thinking:
== quote ==
Chris Dillow quotes Martin Wolf: "What we increasingly seem to have is an unstable rentier
capitalism, weakened competition, feeble productivity growth, high inequality and, not
coincidentally, an increasingly degraded democracy."
Chris Dillow then sets out to explain the trouble with Capitalism: "The Bank of England
has given us a big clue here. It points out that the rising profit share (a strong sign of
increased monopoly) is largely confined to the US. In the UK, the share of profits in GDP has
flatlined in recent years. Few, however, would argue that UK capitalism is less dysfunctional
than its US counterpart. Which suggests that the problem with capitalism is not increased
monopoly. So what is it? Here, I commend some brilliant work by Michael Roberts. Many of the
faults Martin discusses have their origin in a declining rate of profit ― a decline
which became acute in the 1970s but which was never wholly reversed."
The whole intellectual/moral misery of economists is contained in this paragraph. Chris
Dillow's explanation starts with the "share of profits in GDP" and ends with the "rate of
profit". Not only are these entirely different things but macroeconomic profit is not
defined, to begin with.
The simple reason is that neither Chris Dillow nor Martin Wolf nor Michael Roberts knows
what profit is.#1 This sad fate they share with Walrasians, Keynesians, Marxians, Austrians,
and MMTers. The dirty secret of economics is that since Adam Smith/Karl Marx economists do
not know what profit is.#2, #3
And this means that economics is proto-scientific garbage but economists have not realized
it to this day.
Capitalism, Alone: Four important--but somewhat hidden--themes
I review here four important, but perhaps not immediately apparent, themes from my
Capitalism, Alone. The book contains many other, more topical, subjects that are likely to
attract readers' and reviewers' attention much more than the somewhat abstract or
philosophical issues briefly reviewed here.
1. Capitalism as the only mode of production in the world. During the previous high
point of the British-led globalization, capitalism shared the world with various feudal or
feudal-like systems characterized with unfree labor: forced labor was abolished in
Austria-Hungary in 1848, serfdom in Russia in 1861, slavery ended in the US in 1865, and in
Brazil only in 1888, And labor tied to land continued to exist in India and to a lesser
degree in China. Then, after 1917, capitalism had to share the world with communism which, at
its peak, included almost a third of the world population. It is only after 1989, that
capitalism is not only a dominant, but the sole, system of organizing production (Chapter
1).
2. The global historical role of communism. The existence of capitalism (economic
way to organize society) throughout the world does not imply that the political systems must
be organized in the same way everywhere. The origins of political systems are very different.
In China and Vietnam, communism was the tool whereby indigenous capitalism was introduced
(explained below). The difference in the "genesis" of capitalism, that is, in the way
capitalism was "created" in various countries explains why there are at least two types of
capitalism today. I am doubtful that there would ever be a single type of capitalism covering
the entire globe.
To understand the point about the different origins, one needs to start from the question
of the role of communism in global history and thus from the interpretation (histoire
raisonéee) of the 20th century (Chapter 3).
There are two major narratives of the 20th century: liberal and Marxist; they are both
"Jerusalem"-like in the Russian philosopher Berdiaff's terminology. They see the world
evolving from less developed toward more developed stages ending in either a terminus of
liberal capitalist democracy or Communism (society of plenty).
Both narratives face significant problems in the interpretation of the 20th century.
Liberal narrative is unable to explain the outbreak of the First World War which, given the
liberal arguments about the spread of capitalism, (peaceful) trade, and interdependence
between countries and individuals that ostensibly abhor conflict should never have happened,
and certainly not in the way it did -- namely by involving in the most destructive war up to
date all advanced capitalism countries. Second, liberal narrative treats both fascism and
communism as essentially "mistakes" (cul de sacs) on the road to a chiliastic liberal
democracy without providing much of reasoning as to why these two "mistakes" happened. Thus
the liberal explanations for both the outbreak of the War and the two "cul de sacs" are often
ad hoc, emphasizing the role of individual actors or idiosyncratic events.
Marxist interpretation of the 20th century is much more convincing in both its explanation
of World War I (imperialism as the highest stage of capitalism) and fascism (an attempt by
the weakened bourgeoise to thwart left-wing revolutions). But Marxist view is entirely
powerless to explain 1989, the fall of communist regimes, and hence unable to provide any
explanation for the role of communism in global history. The fall of communism, in a strict
Marxist view of the world, is an abomination, as inexplicable as if a feudal society having
had experienced a bourgeois revolution of rights were suddenly to "regress" and to reimpose
serfdom and the tripartite class division. Marxism has therefore given up trying to provide
an explanation for the 20th century history.
The reason for this failure lies in the fact that Marxism never made a meaningful
distinction between standard Marxist schemes regarding the succession of socio-economic
formations (what I call the Western Path of Development, WPD) and the evolution of poorer and
colonized countries. Classical Marxism never asked seriously whether the WPD is applicable in
their case. It believed that poorer and colonized countries will simply follow, with a time
lag, the developments in the advanced countries, and that colonization and indeed imperialism
will produce the capitalist transformation of these societies. This was Marx's explicit view
on the role of English colonialism in Asia. But colonialism proved too weak for such a global
task, and succeeded in introducing capitalism only in small entropot enclaves such as Hong
Kong, Singapore and parts of South Africa.
Enabling colonized countries to effect both their social and national liberations (note
there was never a need for the latter in advanced countries) was the world-historical role of
communism. It was only Communist or left-wing parties that could prosecute successfully both
revolutions. The national revolution meant political independence. The social revolution
meant abolishment of feudal growth-inhibiting institutions (power of usurious landlords,
labor tied to land, gender discrimination, lack of access to education by the poor, religious
turpitude etc.). Communism thus cleared the path for the development of indigenous
capitalism. Functionally, in the colonized Third World societies, it played the same role
that domestic bourgeoisies played in the West. For indigenous capitalism could be established
only once feudal institutions were swept away.
The concise definition of communism is hence: communism is a social system that enabled
backward and colonized societies to abolish feudalism, regain economic and political
independence, and build indigenous capitalism.
3. The global dominion of capitalism was made possible thanks to (and in turn it
exacerbates) certain human traits that, from an ethical point, are questionable . Much
greater commercialization and greater wealth have in many ways made us more polished in our
manners (as per Montesquieu) but have done so using what were traditionally regarded as vices
-- desire for pleasure, power and profit (as per Mandeville). Vices are both fundamental for
hyper-commercialized capitalism to be "born" and are supported by it. Philosophers accept
them not because they are by themselves desirable, but because allowing their limited
exercise allows the achievement of a greater social good: material affluence (Smith;
Hume).
Yet the contrast between acceptable behavior in hyper-commercialized world and traditional
concepts of justice, ethics, shame, honor, and loss of face, create a chasm which is filled
with hypocrisy; one cannot openly accept that one has sold for a sum of money his/her right
to free speech or ability to disagree with one's boss, and thus arises the need to cover up
these facts with lies or misrepresentation of reality.
From the book:
"The domination of capitalism as the best, or rather the only, way to organize production
and distribution seems absolute. No challenger appears in sight. Capitalism gained this
position thanks to its ability, through the appeal to self-interest and desire to own
property, to organize people so that they managed, in a decentralized fashion, to create
wealth and increase the standard of living of an average human being on the planet by many
times -- something that only a century ago was considered almost utopian.
But this economic success made more acute the discrepancy between the ability to live
better and longer lives and the lack of a commensurate increase in morality, or even
happiness. The greater material abundance did make people's manners and behavior to each
other better: since elementary needs, and much more than that, were satisfied, people no
longer needed to engage in a Hobbesian struggle of all against all. Manners became more
polished, people more considerate.
But this external polish was achieved at the cost of people being increasingly driven by
self-interest alone, even in many ordinary and personal affairs. The capitalist spirit, a
testimony to the generalized success of capitalism, penetrated deeply into people's
individual lives. Since extending capitalism to family and intimate life was antithetical to
centuries-old views about sacrifice, hospitality, friendship, family ties, and the like, it
was not easy to openly accept that all such norms had become superseded by self-interest.
This unease created a huge area where hypocrisy reigned. Thus, ultimately, the material
success of capitalism came to be associated with a reign of half-truths in our private
lives."
4. Capitalist system cannot be changed. The dominion of hyper-commercial capitalism
was established thanks to our desire to permanently keep on improving our material
conditions, to keep on getting richer, a desire which capitalism satisfies the best. This has
led to the creation of a system of values that puts monetary success as its top. In many ways
it is a desirable evolution because "believing" in money alone does away with other
traditional and discriminatory hierarchical markers.
In order for capitalism to exist it needs to grow and to expand to ever new areas and new
products. But capitalism exists not outside of us, as a external system. It is individuals,
that is, us, who, in our daily lives, create capitalism and provide it with new fields of
action -- so much that we had transformed our homes into capital, and our free time into a
resource. This extraordinary commodification of almost all, including what used to be very
private, activities was made possible by our internalization of the system of values where
money acquisition is placed on the pinnacle. If this were not the case, we would not have
commodified practically all that can be (as of now) commodified.
Capitalism, in order to expand, needs greed. Greed has been entirely accepted by us. The
economic system and the system of values are interdependent and mutually reinforcing. Our
system of values enables hyper-commercialized capitalism to function and expand. It then
follows that no change in the economic system can be imagined without a change in the system
of values that underpins it, which the system promotes, and with which we are, in our
everyday activities, fully comfortable. But to produce such a change in values seems, at
present, to be an impossible task. It has been tried before and ended in the most ignominious
failure. We are thus locked in capitalism. And in our activities, day in, day out, we support
and reinforce it.
President Donald Trump delivered a
measured speech to the United Nations General Assembly this morning. Ever the showman who
usually likes to go off-script, Trump was almost painfully presidential – the UN, after
all, is not the forum for off-the-cuff remarks. The speech was wide-ranging, but the overriding
theme was the importance of national pride and sovereignty to every country. "The future,"
Trump told the assembly, "does not belong to globalists." In addition to providing an overview
of America's foreign policy challenges, the president berated China for its unfair trade
practices and its violation of obligations made to the people of Hong Kong. He called for the
empowerment of women and for the rights of the LGBT community to be protected.
Adversaries
Singled Out
Taking aim at the World Trade Organization (WTO) for admitting China , Trump pointed out
that 60,000 American factories have closed since China became a member-state.
"The World Trade Organization needs drastic change," the president said. "The
second-largest economy in the world should not be permitted to declare itself a developing
country in order to game the system at others' expense."
Trump also singled out the governments of Iran and Venezuela . Of the
former, the president made it clear that US sanctions would not be lifted while the Iranian
government continues its aggressive behavior. At the same time, the US leader expressed
sympathy and support for the Iranian people. Such a distinction is important.
Of Venezuela's dictator, Nicolas Maduro – whose role as that country's legitimate
leader is now in dispute – Trump said: "[He] is a Cuban puppet, protected by Cuban
bodyguards, hiding from his own people while Cuba plunders Venezuela's oil wealth to sustain
its own corrupt communist rule."
Expanding on the issue of the Venezuelan government's catastrophic political and economic
policies, Trump warned that "one of the most serious challenges our countries face is the
spectrum of socialism," which he described as "the wrecker of nations and destroyer of
societies."
The Injustice Of Illegal Mass Migration
The president also devoted part of his address to the issue of mass illegal immigration .
Acknowledging that this was not just an American problem but a global one, Trump told the
gathering that every country has the right to secure its own borders. He had a direct message,
though, for open-borders activists whom he accused of cloaking themselves "in the rhetoric of
social justice":
"Your policies are not just. Your policies are cruel and evil. You are empowering criminal
organizations that prey on innocent men, women, and children. You put your own false sense of
virtue before the lives, well-being in [sic] countless innocent people."
It is indeed ironic that the same people who champion the alleged right of people from
Central America to flow unchecked into the United States also feign concern for the economic
deprivation that exists in those countries from which these migrants are coming. Trump made the
counterpoint in succinct fashion:
"[T]hese nations cannot reach their potential if a generation of youth abandon their homes
in search of a life elsewhere."
A Jab At Domestic US Politics
In a continuation of the anti-globalist, sovereign-nations theme, Trump warned against
totalitarianism and the erosion of democracy and individual freedoms. "We must always be
skeptical of those who want conformity and control," he told the assembly. "Even in free
nations, we see alarming signs and new challenges to liberty."
In what seemed to be a thinly veiled reference to the efforts of Democrats and left-wing
activists in the US to reverse the result of the 2016 presidential election, the
Commander-in-Chief went on:
"A permanent political class is openly disdainful, dismissive, and defiant of the will of
the people."
He was not done. Though it would have been entirely inappropriate to openly call out his
political opponents, Trump dwelt on the topic while presenting it as a problem faced by all
free nations – which, in fact, it is:
"A faceless bureaucracy operates in secret and weakens democratic rule. Media and academic
institutions push flat-out assaults on our histories, traditions, and values a free society
must not allow social media giants to silence the voices of the people and a free people must
never, ever be enlisted in the cause of silencing, coercing, canceling, or blacklisting their
own neighbors."
Still on the subject of individual liberty, the president also warned the UN that Americans
would not be deprived of their Second Amendment rights: "There is no circumstance," he warned,
"under which the United States will allow international actors to trample on the rights of our
citizens, including the right to self-defense." To emphasize the point, the president reminded
the assembly that America would not ratify the UN Arms Trade Treaty.
To close his address, the president delivered to the gathered world leaders and ambassadors
a message of unity, peace, and recognition that, like the US, every country in the world
should, first and foremost, act in the interests of its own people. "Lift up your nations," he
told them, "cherish your culture, honor your histories, treasure your citizens, make your
country strong and prosperous and righteous. Honor the dignity of your people and nothing will
be outside of your reach."
Trump's speech was the same boilerplate BS he wheels out all of the time - Israel, Iran,
black and Mexican unemployment, pissing away Trillions on strengthening the military,
etc.
"... I always thought globalization was about the opportunity for a handful of businesses and corporations to control major industries around the world. ..."
"... There is an anti-China hawks faction based in the Republican party that has made its present felt. People like Robert Lighthizer, Peter Navarro and Steve Bannon. I have seen this sentiment spill over into Australian politics but they have not reached the stage where they are asking: "Are you now, or have you ever been, born Chinese?". ..."
"... We have also seen hawk factions against Russia, Iran and not long ago Venezuela. The ones for Russia and Iran have been long going but the ones against China and Venezuela were sudden and new. It may be that tomorrow that Trump will do the same against Cuba and threaten any country that does trade with them. Who knows what other country may fall within his sights? ..."
"... it seems business people in the government are being pushed aside by hawkish factions who do not care what effect it has on the economy or the country. Great! ..."
"... Those are the same "hawks" that are busy destroying the rest of America as well. ..."
"... As it is now, China literally has the US by the jewels, and if a serious conflict ever arose, could squeeze them hard. Just their dominance in manufacturing a large percentage of the pharmaceuticals consumed by US patients alone creates a serious vulnerability. ..."
"... Situating the manufacturing in countries that are part of the Chinese sphere of influence won't help much in a conflict. China would probably be able to sweep through much of Southeast Asia quickly or interdict shipments if there was war. ..."
"... the world wide presence/threat of the USA military and diplomatic corps allows globalization to be less risky for USA businesses, so, in effect, the patriotic "spreading of democracy" around the world via military actions is a factor in USA job loss. This is yet another cost of the bloated military to the general USA population. ..."
"... Trump, as usual, got his strings pulled by the Deep State when he went for actual implementation of a campaign promise. The DS doesn't care about working Americans, they are simply against China. ..."
"... as Julius Krein, editor of American Affairs, writes: "United States industry is losing ground to foreign competitors on price, quality and technology. In many areas, our manufacturing capacity cannot compete with what exists in Asia." ..."
"... Back in the early 80s I saw a massive warehouse full of machine tools, Bridgeport mills, and such lined up, it seemed forever, the guy there said they were going to China. I asked my Dad about it, and he told me we were selling them to the Chinese for the price of scrap. The whole thing is mindless and pathetic, but the really maddening thing is the slippery way our 'leaders' can keep dodging the blame by simply pointing a finger in whatever direction, and everybody's eyes move in unison. ..."
"... The argument/discussion is not about how and where to outsource our jobs, it's about how stupid it was to do it in the first place ..."
"... Also the Chinese internal market continues to attract MNC's and this attraction will continue to grow far into the future. China's middle class is already larger than the total population of the US and it continues to grow rapidly. While down presently the Chinese internal consumption continues to grow at an annual rate of some 8.5%. ..."
"... Trump's approach to trade is isolating the US, blocking its Co's from the Chinese market, and incentivizing the Chinese to offer better conditions to Co's of the rest of the world. How can that help the US ? ..."
"... The relentless neoliberal race to the bottom, outsourcing, and austerity that marked the death blow to American Labor is over. In that light it makes little difference whether our corporations pull out of China, go to Vietnam, or come home. The exploitation of the poorest is coming to an end. And none too soon. ..."
"... I hope some candidates discuss the imperative to have the US start making it's own medications again. ..."
"... I could not believe the government has allowed the entire supply chain of building blocks of ALL our antibiotics to be sourced almost solely from China. To me THAT'S the national security issue we need to deal with immediately. As well as other vital drugs.. ..."
"... Chinese manufacturers have the wealth and experience to teach production line workers and make things anywhere. Western companies manufacturing in China have belatedly looked for facilities in neighboring countries and found the Chinese are already there. ..."
"... Trump doesn't give a damn about getting manufacturing jobs back into the United States! (Or at least his advisors don't). ..."
"... Low housing costs, lead to lower wages so UK employers were able to compete in a free trade world. William White (BIS, OECD) talks about how economics really changed over one hundred years ago as classical economics was replaced by neoclassical economics. ..."
"... He thinks we have been on the wrong path for one hundred years. Free trade requires a low cost of living and what was known in the 19th century had disappeared by the 20th. The West's high cost of living means high wages and an inability to compete in a free trade world. ..."
By Marshall Auerback, a
market analyst and commentator. Produced by Economy for All, a project of the Independent Media
Institute
"Chimerica" is a term originally coined by the historian Niall Ferguson and economist Moritz
Schularick to describe the growing economic relationship between the U.S. and China since the
latter's entry into the World Trade Organization (WTO) in 2001. In the words of Ferguson : "The Chinese did the saving, the
Americans the spending. The Chinese did the exporting, the Americans the importing. The Chinese
did the lending, the Americans the borrowing." Much of the pre-crisis boom in global trade was
driven by this economic symbiosis, which is why successive American presidents tolerated this
marriage of convenience
despite the increasing costs to the U.S. economy . The net benefits calculation, however,
began to change after 2008, and the conflict has intensified further after the 2016
presidential election result. Today, the cumulative stress of Donald Trump's escalating trade
war is leading to if not an irreparable breach between the two countries, then certainly a
significant fraying. The imminent resumption of trade talks notwithstanding, the rising cost of
the tariffs is already inducing some U.S. manufacturers to exit China. But in most instances,
they are not returning to home shores.
It may have taken Trump to point out the pitfalls of the Chimerica link, but coming up with
a coherent strategy to replace it is clearly beyond the president's abilities. America is
likely to remain a relative manufacturing wasteland, as barren as Trump's own ill-conceived
ideas on trade. At the same time, it's not going to be an unmitigated victory for China either,
as Beijing is increasingly suffering from a large confluence of internal and external
pressures.
Chimerica helped to launch China as a global trade power. To the extent that this marriage
helped the U.S. economy, it skewed toward the largely blue state coastal regions. Wall Street
banks located on the East Coast happily collected lucrative commissions and investment banking
fees, as China's export proceeds were recycled into U.S. treasuries, stocks, and high-end real
estate while the capital markets boomed; on the West Coast, "new economy" companies thrived,
their growth and profitability unhindered by the onslaught of Chinese manufactured exports. By
contrast, facilitated by technological advances that permitted large-scale outsourcing by U.S.
manufacturers, Chimerica laid waste to much of what was left of America's Rust Belt, and the
politics of many of the displaced workers mutated to the extent that Donald Trump became an
appealing alternative to the establishment in 2016.
The major legacy of Chimerica, then, is that too many American workers have been
semi-permanently replaced by low-cost offshored labor. Prior to great advances in technology,
along with globalization, displacement of the current labor force could only have occurred
through immigration of workers into the country. Historically, displacement by immigrants
generally began at the menial level of the labor force, and became more restrictive as when it
became correlated with significant unemployment. Given the rise of globalization and the
corresponding liberalization of immigration in the past few decades, however, policy no longer
arrests the displacement of American workers. The policy backlash has consequently manifested
itself more via trade protectionism. Trump has sought to consolidate his Rust Belt base of
supporters by launching a trade war, especially versus Beijing, the ultimate effects of which
he hoped would be to re-domicile supply chains that had earlier migrated to China.
Early on in his presidency, there was some hope that Trump's protectionism was at best a
bluff or, at worst, an aberration, and that the return of a Democrat to the White House in 2020
would eventually reestablish the status quo ante. But the president still can't get a wall, and
his protectionism has become more pronounced almost as if to compensate. The problem today is
that even if Trump is voted out of office in 2020, corporate America is becoming less inclined
to wait out the end of his presidency to return to the pre-Trump status quo of parking the bulk
of their manufacturing in China. There is too much risk in putting all of one's eggs in the
China basket, especially given
growing national security concerns . Hence, U.S. companies are taking action. In spite of
decades of investment in these China-domiciled supply chains, a number of American companies
are pulling out:
toy manufacturer Hasbro , Illinois-based
phone accessories manufacturer Xentris Wireless, and lifestyle clothing company PacSun are
a few of the operators who are exiting the country.
But they are not coming back to the U.S., relocating instead to places like Vietnam,
Bangladesh, Mexico, the Philippines and Taiwan. The chief financial officer of Xentris, Ben
Buttolph, says
that the company will never return to China: "We are trying to have multiple locations
certified for all of our products, so that if all of a sudden there's an issue with one of the
locations, we just flip the switch." Likewise, the CEO of Hasbro, Brian Goldner,
recently spoke of "great opportunities in Vietnam, India and other territories like
Mexico."
All is not lost for the U.S., however, as Goldner did celebrate the success of Hasbro's
facility in East Longmeadow, Massachusetts, which has resumed
production of Play-Doh in the U.S. for the first time since 2004 . It is doubtful, however,
that this represents the recapturing of the high value-added supply chains that Trump envisaged
when he first launched his trade assault on Beijing.
In general, as Julius Krein,
editor of American Affairs , writes: "United States industry is losing ground to foreign
competitors on price, quality and technology. In many areas, our manufacturing capacity cannot
compete with what exists in Asia."
These are not isolated examples.
Defense One also notes the following development:
It came without a breaking news alert or presidential tweet, but the technological
competition with China entered a new phase last month. Several developments quietly heralded
this shift: Cross-border investments between the United States and China plunged to their
lowest levels since 2014, with the tech sector suffering the most precipitous drop. U.S. chip
giants Intel and AMD abruptly ended or declined to extend important partnerships with Chinese
entities. The Department of Commerce halved the number of licenses that let U.S. companies
assign Chinese nationals to sensitive technology and engineering projects.
This development consequently makes it hard to proclaim Beijing a winner in this dispute
either. The country still needs access to U.S. high tech. The government announced yet
another fiscal stimulus to the economy earlier this month in response to a cluster of
weakening economic data, much of which is related to the trade shock. It is also the case that
China is being buffeted politically, both externally and internally: externally, in addition to
the escalating trade war, China's own efforts to counter the effects of rising protectionism by
creating a " reverse
Marshall Plan " via the Belt and Road Initiative is
floundering .
China's "iron brother," Pakistan, is increasingly being victimized by India's aggressive
Hindu-centric nationalism . It is hard to imagine the Modi government opportunistically
taking the step of annexing Kashmir and undermining Pakistan, had it not sensed Beijing's
increasing vulnerability.
Internally, Beijing is finding it increasingly challenging as it seeks to enforce its "One
China" policy in Hong Kong and Taiwan. The
withdrawal of the controversial extradition law that first precipitated widespread
demonstrations in Hong Kong has not alleviated the political pressures in the territory, but
simply allowed an even bigger protest culture to take root and strengthen an independent
political mindset. Similarly, Taiwan has also openly supported the Hong Kong protesters,
pledging help to those seeking asylum . Both regions now constitute both a huge humiliation
and challenge to the primacy of China's ruling Communist Party. And now on top of that, foreign
manufacturers are leaving the country, weakening a totally leveraged manufacturing complex.
The implications of this divorce go well beyond the U.S. and China. They constitute another
step toward regionalization, another step away from a quaint ideological "post-history"
construct that saw Washington, D.C., as the head office and the rest of the world as a bunch of
branch plants for "America, Inc." It's hardly comforting to contemplate that the last time we
reached this historic juncture was the early 1900s, when a similarly globalized economy broke
down, followed by the Great War. As Niall Ferguson points out , "a high level of economic integration does not
necessarily prevent the growth of strategic rivalry and, ultimately, conflict." There's no
doubt that both Washington and Beijing will likely making soothing noises to the markets in
order to create favorable conditions for the trade talks in October, but their actions suggest
that they are both digging in
for a longer struggle . Today's trade wars, therefore, are likely to morph into something
more destructive, which is a lose-lose in an era where human advancement depends on greater
integration between economic powers.
There may be another aspect to this development and that is of geopolitics. You can see
that in Marshall's article when the CFO of Xentris said: "We are trying to have multiple
locations certified for all of our products, so that if all of a sudden there's an issue with
one of the locations, we just flip the switch." There is an anti-China hawks faction based in
the Republican party that has made its present felt. People like Robert Lighthizer, Peter
Navarro and Steve Bannon. I have seen this sentiment spill over into Australian politics but
they have not reached the stage where they are asking: "Are you now, or have you ever been,
born Chinese?".
So we have seen a long string of sanctions and tariffs at play so that China will change its
laws and institutions to suit American interests. Yeah, I can't see that happening anytime
soon but hey, America First, Baby. We have also seen hawk factions against Russia, Iran and
not long ago Venezuela. The ones for Russia and Iran have been long going but the ones
against China and Venezuela were sudden and new. It may be that tomorrow that Trump will do
the same against Cuba and threaten any country that does trade with them. Who knows what
other country may fall within his sights?
That being the case if you were running an international country, you can no longer just have
your manufacturing base or service operations just in one country. If Xentris is an example,
US companies may have to split manufacturing into several countries in case one fine day that
Trump will sanction yet another country that your company depends on.
I would imagine that it
would not be so efficient but it seems business people in the government are being pushed
aside by hawkish factions who do not care what effect it has on the economy or the country.
Great!
Those are the same "hawks" that are busy destroying the rest of America as well. Another
four years of this will, effectively, dismantle what democracy is left. The world trade won't
be the big issue. The departure of millions of Americans will.
If that happens, be sure to thank the Catfood Democrats for it. Because they are the
people who will do their very best and hardest to throw the next election to Trump, one way
or another.
It seems like diversification of supply chains can only be a good thing. As it is now,
China literally has the US by the jewels, and if a serious conflict ever arose, could squeeze
them hard. Just their dominance in manufacturing a large percentage of the pharmaceuticals
consumed by US patients alone creates a serious vulnerability.
I really don't think it matters if manufacturing jobs are repatriated to the US, or just
set up and spread around elsewhere for now – since they'll be obsolete jobs in the near
future anyway, as robotics and AI get increasingly efficient at doing the work that human
workers currently do.
Situating the manufacturing in countries that are part of the Chinese sphere of influence
won't help much in a conflict. China would probably be able to sweep through much of
Southeast Asia quickly or interdict shipments if there was war.
So the status quo was preferable? The tone of the article seems to suggest that America should accept it place as a
third-world manufacturer, as if these Asian nations have some magical sauce that can't be
replicated. Gawd.
The US does have a lot of magic. Like one third of FDI related to tax evasion. Pulling Mac
Book manufacturing out of Austin for the lack of one 'screw', etc. So is the premise of going after China on trade and IP policies good. I would agree. Maybe
not in strategy, but at least someone has opened the box.
I agree with your comment, the article suggests the status quo was preferable. Of note, Trump has shown his supporters that something CAN be done other than follow the
"resistance is futile" path of the Bill Clinton/Bush Jr./Obama administrations.
I also suggest that the world wide presence/threat of the USA military and diplomatic
corps allows globalization to be less risky for USA businesses, so, in effect, the patriotic
"spreading of democracy" around the world via military actions is a factor in USA job
loss. This is yet another cost of the bloated military to the general USA population.
I worked in the electronics industry for 30+ years and watched high margin manufacturing
move to Asia. Now the lower level component manufacturers (PCBs, passives) are firmly established in
Asia as the USA companies have helped train worthy competitors overseas. It took 25+ years to move much of USA manufacturing overseas, indicating to me that it
will take a long time to bring it back significantly, well outside the Trump time frame.
But I suspect Trump voters will appreciate Trump's headline efforts. If the Democrats push for more Free Trade as good for the USA, it will hurt them at the
ballot box.
The second time as farce. How tragicomic that Trump has succeeded in little more than
repatriating the manufacture of Play-Doh. On the other hand, the shipping cost of unbaked brick seems a rational factor in Hasbro's
decision. A GND that shortens supply lines would be more effective in repatriating heavy
industry, but then printed circuit boards aren't all that heavy .
The thing is Trump, as usual, got his strings pulled by the Deep State when he went for
actual implementation of a campaign promise. The DS doesn't care about working Americans,
they are simply against China.
So he goes and puts tariffs on a country, not a product. And surprise, said product
doesn't come back on-shore. Comical (and yeah, cosmically a bit just) that Vietnam is getting
so much of that manufacturing. Wasn't what he was elected for.
In general, as Julius Krein, editor of American Affairs, writes: "United States industry
is losing ground to foreign competitors on price, quality and technology. In many areas, our
manufacturing capacity cannot compete with what exists in Asia."
As a engineer up to my elbows in manufacturing for forty years, this was awfully easy to
predict way back then (I gave up complaining about it about 2000), and then watch happen
– real time. And to once again state the obvious, China did not TAKE American jobs,
American CEOs GAVE them our jobs. We will not fix this problem until we identify and fix the
root cause.
Now the only way to fix it is (once again obviously) massive government investment such as
mandated by the GND. We need the GND, it is not only required to save the world, it will save
our country.
Agree, it was predictable, and it was predicted. What we've been talking about is the "Giant sucking sound" Ross Perot foretold would
happen prior to the passing of NAFTA. It wasn't hard back then to see that he was right, but it took a few decades for the
public to feel the impact, boiling frogs and all that.
Back in the early 80s I saw a massive warehouse full of machine tools, Bridgeport mills,
and such lined up, it seemed forever, the guy there said they were going to China. I asked my Dad about it, and he told me we were selling them to the Chinese for the price
of scrap. The whole thing is mindless and pathetic, but the really maddening thing is the slippery
way our 'leaders' can keep dodging the blame by simply pointing a finger in whatever
direction, and everybody's eyes move in unison.
NAFTA and China are two completely separate things. I have actually supported NAFTA in
principle because we should encourage trade to be focused on our immediate neighbors. A
wealthier and safer Mexico and Central America would create markets for us and virtually
eliminate illegal immigrants as the southern border.
China is on the other side of the world and is not part of NAFTA. While we should have
cordial relations with it, if we are looking for inexpensive labor, south of the border is
the better place to focus on that. So Trump's tariffs on China are not the wrong thing to do
per se. The problem is that they are being done in a vacuum of general trade policy where he
is looking at everything as transaction bilateral relations with every country on the planet,
which requires an immense amount of detailed thought and negotiation, neither of which appear
to be a focus of this administration.
The countries that the companies are talking about moving their operations to are
generally part of the new TPP which the US is not part of. So, we have removed ourselves from
having trade relations with countries US CEOs are setting up operations in, but those
countries are now starting to work together to counter both China (original TPP purpose) and
the US (now that the US has bailed on it). Sounds like a recipe for a replay of China's giant
sucking sound.
The argument/discussion is not about how and where to outsource our jobs, it's about how
stupid it was to do it in the first place. Anyone smart enough to breath knows that Mexico is next door, and China is on the other
side of the world, but they are both part of the same giant sucking sound. The fact that you support both NAFTA ,think it was unwise to back out of the TPP, and
think the issue is the present administration's lack of " detailed thought and negotiation
" indicate a truly unbelievable level of denial.
NAFTA and MFN for China were two different actions towards the same goal . . . the use of
Free Trade to dismantle thingmaking in America and re-mantle thingmaking in foreign
export-aggression platforms to use against America.
Free Trade is the new Slavery. Militant Belligerent Protectionism is the new
Abolition.
I remember when a Midwest Democrat (Stabenow?) tried to get a law passed that would
prohibit a US corporation from deducting, from their federal taxes, the cost of moving
factories overseas. A very minor disincentive, but a disincentive nonetheless. The Repubs beat it down as "anti-business". Concern about American workers is something to express in political speeches around
election time but not in legislation.
Hidden within this narrative is the fact that some countries, and not only China, have for
long been playing beggar-thy-neighbor policies by restraining internal consumption and
redirecting savings to the rest of the world that in turn finance their exporting machines.
IMO, the biggest mistake made by China has been not to force fast enough a transition from a
saving economy to a consumer economy with more balanced external relationships.
These kind of
policies are confrontational. As confrontational as tariffs or even as economic sanctions in
my view. Yet, the prevailing economic narrative is that saving and exporting is the right
economic thing to do. In this sense I think it matters a lot to which countries are being re
directed investments of american companies leaving China. My intuition is that, for instance,
Vietnam migth be willing to play this game while Mexico not. Investing in countries that save
too much migth be counterproductive.
I very much regret this aggressive narrative that has become common place in which
countries are identified simply as competitors, if not enemies, in a global chess game.
Political moves are confrontational and or humiliating. These Game of Thrones dynamics are
played precisely when some international consensus in more important things like figthing
climate change would be more than desirable. We are headed to truly bad times.
Here is
an article by Steve Dickinson from the layers office Harris Bricken McVay Sliwoski that
is based on his Co's China practice. Steve's conclusion goes as follows:
The Chinese system put in place from 1992 to 2005 was a unique system and not likely to
be replaced in S.E./South Asia or in any other region of the world. So for manufacturers,
moving to a new region means doing the analysis from the ground up. Simply taking what they
do in China and moving it to a new location is not likely to be a workable solution.
Also the Chinese internal market continues to attract MNC's and this attraction will
continue to grow far into the future. China's middle class is already larger than the total
population of the US and it continues to grow rapidly. While down presently the Chinese
internal consumption continues to grow at an annual rate of some 8.5%.
Personal savings deposited in bank accounts reach the equivalent of some $US 30 Trillion !
Compare that to consumer debt at some $US 6.5 Trillion. In other words China is growing into
the largest consumer market on earth and the biggest advantage that its internal market
procures is its 'economies of scale' that make Chinese productions hyper-competitive. In
other words China is gaining the kind of advantage that the US had along the 20th century.
The advantage of a super large market size that dwarfs other national markets.
Trump's approach to trade is isolating the US, blocking its Co's from the Chinese market,
and incentivizing the Chinese to offer better conditions to Co's of the rest of the world.
How can that help the US ?
The biggest problem of the West and particularly the US is its ideological approach to
economics. The Chinese adopted a pragmatic approach and it has served them well. Time to
relearn the meaning of political economics (économie politique).
I read Dickinson's PR piece linked by laodan. I used to work for a big law firm that had
an international practice group focusing on moving US businesses to China ( I was not
involved in that practice area, did environmental law and litigation.) The firm's PR
department tasked lawyers with certain expertise to generate these kinds of come-ons as part
of the compensation weighting scheme -- publish, and bring in business, or lose out in the
annual "whining for dollars" partnership division of spoils. Eat what you kill.
Dickinson is talking his book, of course. I have no idea if his read of the history and
the current state of affairs in China and the "Asian Tigers" (does anyone use that term any
more?) is accurate and complete, but what he describes is his firm's readiness to help
supranational (emphasize SUPRAnational) and post-national corporate entities get a leg up in
the race to the bottom. He'll help you find the places where the ruling class will give away
the biggest share of the "national birthright" so the corporate entity can maximize profit by
streamlining production and consumption, and of course growth. All the stuff that is killing
the planet. But his time frame, his personal time frame, presumably, as well as the framing
of the corporate shark entities which he is a remora to, cares nothing for the bigger
economic and ecological effects of more stuff, more shipping, more energy use, and of course
more combustion and consumption.
And I'd note that he carefully omits all the baksheesh and greasing of palms that i read
is such an important part of "doing business" at any kind of scale, to varying degrees
everywhere in the world. I wonder if his custom analyses of the relative merits of, say,
Vietnam vs. China vs. Cambodia vs. Taiwan includes sketching out the bribes that have to be
paid to close on the sale of national birthrights on the way to the bottom that the globalist
business model drives everything toward?
I'm sure he would be happy to have the ear and hourly billings of all the great decision
makers of all the various kinds of businesses, high to low tech, wanting to take full
advantage of the "opportunities" that may be on offer, on how to ride the asymptotically
downward curve of the race to the bottom, for fun and profit
Looks like China has had a pretty effective industrial policy, unlike the US where
corporate vampire capital dominion and corruption have bled the mopery white (not a racial
reference, of course ) Do economists and policy wonks in the US even dare to use the phrase
"industrial policy" any more? Or is it just presumed that "shareholder value" trumps all
else? Especially as the author puts it, again quoting Ferguson, where we are "in an era where
human advancement depends on greater integration between economic powers."
The relentless neoliberal race to the bottom, outsourcing, and austerity that marked the
death blow to American Labor is over. In that light it makes little difference whether our
corporations pull out of China, go to Vietnam, or come home. The exploitation of the poorest
is coming to an end. And none too soon.
For national security reasons at minimum, I hope some candidates discuss the imperative to
have the US start making it's own medications again.
Makes more sense to subsidize our production of medication than to give billions in subsidies
to very profitable oil companies.
I agree. I could not believe the government has allowed the entire supply chain of
building blocks of ALL our antibiotics to be sourced almost solely from China. To me THAT'S
the national security issue we need to deal with immediately. As well as other vital
drugs..
Anecdotally, I have started making this my number one political conversation issue –
replete with references ( because of course not a soul believes it at first).. I have yet to
find a single person Repub or Demo who isn't horrified and against it .
Any nation with this much power over our drug supply they could kill millions of us in short
order
Even getting manufacturing out of China will not bankrupt that country as intended. If USA
is intent on pursuing a nationalistic basis to sanctions, I think its bound to fail. Trade
always finds a way as we can well remember from our own commercial / industrial
development.
Chinese manufacturers have the wealth and experience to teach production line workers and
make things anywhere. Western companies manufacturing in China have belatedly looked for
facilities in neighboring countries and found the Chinese are already there. What's still
available is land far from roads and rivers with little power supply.
Another thing is preserving wealth. US Industrialists will keep their money offshore and
remit only as much as they need in the homeland. A major problem imo is a mental restraint in USA thinking. Life is all about competition
and winning. The actual activity, whatever it is, provides no joy unless you win. That
fearful tag "No-one remembers who came second" is banded about. Thats not a philosophy for
happiness. It forces the population into displacement activities few of which are wholesome.
Here endeth the lesson.
It's not a bug, it's a feature! Trump doesn't give a damn about getting manufacturing jobs back into the United States!
(Or at least his advisors don't).
The trick is to move them out of nationalistic China, which is setting itself up as a
competitor for power, and move the jobs into nice docile low-wage colonies, like Mexico and
Indonesia and Bangladesh.
The only catch: China has all the integrated supply lines and is stable. Moving your
manufacturing into a dozen different uncoordinated unstable third-world banana republics has
its own down side.
The UK repealed the Corn Laws to embark on free trade. This reduced the price of bread, and lowered the cost of living, so UK employers could pay
internationally competitive wages. Disposable income = wages – (taxes + the cost of living)
Employees get their money from wages and the employer pays through wages, so the employer
is paying for that bread through wages. Expensive bread leads to higher wages making UK employers unable to compete in a free
trade world. "The interest of the landlords is always opposed to the interest of every other class
in the community" Ricardo 1815 / Classical Economist
Disposable income = wages – (taxes + the cost of living) Employees get their money from wages and the employer pays via wages. Employees get less disposable income after the landlords rent has gone.
Employers have to cover the landlord's rents in wages reducing profit. Ricardo is just talking about housing costs, employees all rented in those days. The appalling conditions UK workers lived in during the 19th century were well
documented.
Low housing costs, lead to lower wages so UK employers were able to compete in a free
trade world. William White (BIS, OECD) talks about how economics really changed over one hundred years
ago as classical economics was replaced by neoclassical economics.
He thinks we have been on the wrong path for one hundred years. Free trade requires a low cost of living and what was known in the 19th century had
disappeared by the 20th. The West's high cost of living means high wages and an inability to
compete in a free trade world.
Never mind our companies can off-shore to where employers can pay lower wages for higher
profits. Look at the US cost of living Donald; this is why those jobs ain't coming back. It's hard to make a good profit in the US, when employers have to cover the US cost of
living in wages, reducing profit. The cost of living = housing costs + healthcare costs + student loan costs + other debt
repayments + food + other costs of living
A multi-polar world became a uni-polar world with the fall of the Berlin Wall and Francis
Fukuyama said it was the end of history.
It was all going so well, until the neoliberals got to work.
The US created an open, globalised world with the Washington Consensus.
China went from almost nothing to become a global super power.
That wasn't supposed to happen, let's get the rocket scientists onto it.
Maximising profit is all about reducing costs.
China had coal fired power stations to provide cheap energy.
China had lax regulations reducing environmental and health and safety costs.
China had a low cost of living so employers could pay low wages.
China had low taxes and a minimal welfare state.
China had all the advantages in an open globalised world.
It did have, but now China has become too expensive and developed Eastern economies are
off-shoring to places like Vietnam, Bangladesh and the Philippines.
An open, globalised world is a race to the bottom on costs.
"The Washington Consensus was always going to work better for China than the US"
the rocket scientists.
Several years ago Naked Capitalism ran an article about how a young George Ball was one of
the New Immoralists for International Corporate Globalonial Plantationism. And that was
before neoliberalism.
"[A]n era where human advancement depends on greater integration between economic
powers."
Oh, by all the gods, no. And what, pray, defines 'human advancement'? What the hell is Mr Auerback talking
about?
Further integration only propels the speed at which resources are extracted and the planet
dies incrementally more. The future will not be one fully integrated planet guided by
whatever-the-hell oligarchs and their 'meritocratic' servitors deign the best options. The
future will of necessity be vastly more local, vastly more hand-made, vastly less energy- and
resource-intensive, and there will be vastly less intercontinental and intra-continental
trade. World-spanning – even continent-spanning political-economic arrangements have no
long term viability whatsoever. Trying to maintain such is a foolish waste of effort and
resources that could be more usefully be directed at de-growth and de-industrialization.
And with that, The Lord Curmudgeon shook his cane one last time at the kids on his lawn
and returned to the troll's cave from which he came.
The last engine of global growth, China, has now reached the end of the line as they have
seen their Minsky Moment coming. China was the latest victim of neoclassical economics. The biggest danger to capitalism is neoclassical economics; it brought capitalism to its
knees in the 1930s and is having another go now.
1929 and 2008 look so similar because they are; it's the same economics and thinking. Richard Vague has analysed the data for 1929 and 2008 and they were even more similar than
they initially appear. Real estate lending was actually the biggest problem in 1929.
Margin lending was another factor in 2008.
The 1920s US mistake is now global.
Japan, the UK, the US, Euro-zone and now China. The last engine of global growth, China, has now reached the end of the line as they have
seen their Minsky Moment coming. The debt fuelled growth model not only runs out of steam, all the debt in the economy then
acts like a drag anchor holding the economy back. Japan has been like this for thirty years.
Richard Koo explains the processes at work in the Japanese economy since the 1990s, which
are at now at work throughout the global economy.
Yes it is, but only for couples with low level of marital satisfaction.
Notable quotes:
"... They also looked at marital breakup more generally, focusing on when couples decided to end their relationships (not necessarily if or when they got divorced). Their findings revealed that when men were unemployed, the likelihood that either spouse would leave the marriage increased. What about the woman's employment status? For husbands, whether their wife was employed or not was seemingly unimportant-it was unrelated to their decision to leave the relationship. It did seem to matter for wives, though, but it depended upon how satisfied they were with the marriage. ..."
"... When women were highly satisfied, they were inclined to stay with their partner regardless of whether they had employment. However, when the wife's satisfaction was low, she was more likely to exit the relationship, but only when she had a job. ..."
The first study considers government data from all 50 U.S. states between the years 1960 and 2005.1 The researchers predicted
that higher unemployment numbers would translate to more divorces among heterosexual married couples. Most of us probably would have
predicted this too based on common sense-you would probably expect your partner to be able to hold down a job, right? And indeed,
this was the case, but only before 1980. Surprisingly, since then, as joblessness has increased, divorce rates have actually
decreased.
How do we explain this counterintuitive finding? We don't know for sure, but the researchers speculate that unemployed
people may delay or postpone divorce due to the high costs associated with it. Not only is divorce expensive in terms of legal fees,
but afterward, partners need to pay for two houses instead of one. And if they are still living off of one salary at that point,
those costs may be prohibitively expensive. For this reason, it is not that uncommon to hear about estranged couples who can't stand
each other but are still living under the same roof.
The second study considered data from a national probability sample of over 3,600 heterosexual married couples in the U.S. collected
between 1987 and 2002. However, instead of looking at the overall association between unemployment and marital outcomes, they considered
how gender and relationship satisfaction factored into the equation. 2
They also looked at marital breakup more generally, focusing on when couples decided to end their relationships (not necessarily
if or when they got divorced). Their findings revealed that when men were unemployed, the likelihood that either spouse would leave
the marriage increased. What about the woman's employment status? For husbands, whether their wife was employed or not was seemingly
unimportant-it was unrelated to their decision to leave the relationship. It did seem to matter for wives, though, but it depended
upon how satisfied they were with the marriage.
When women were highly satisfied, they were inclined to stay with their partner regardless of whether they had employment.
However, when the wife's satisfaction was low, she was more likely to exit the relationship, but only when she had a job.
"... A good economy compensates for much social dysfunction. ..."
"... More than that, it prevents the worst of behaviors that are considered an expression of dysfunction from occurring, as people across all social strata have other things to worry about or keep them busy. Happy people don't bear grudges, or at least they are not on top of their consciousness as long as things are going well. ..."
"... This could be seen time and again in societies with deep and sometimes violent divisions between ethnic groups where in times of relative prosperity (or at least a broadly shared vision for a better future) the conflicts are not removed but put on a backburner, or there is even "finally" reconciliation, and then when the economy turns south, the old grudges and conflicts come back (often not on their own, but fanned by groups who stand to gain from the divisions, or as a way of scapegoating) ..."
"... "backwaters of America, that economy seems to put out fewer and fewer chairs." ~~Harold Pollack~ ..."
"... Going up through the chairs has become so impossible for those on the slow-track. Not enough slots for all the jokers within our once proud country of opportunities, ..."
"... George Orwell: "I doubt, however, whether the unemployed would ultimately benefit if they learned to spend their money more economically. ... If the unemployed learned to be better managers they would be visibly better off, and I fancy it would not be long before the dole was docked correspondingly." ..."
"... Perhaps you are commenting on the aspect that when (enough) job applicants/holders define down their standards and let employers treat them as floor mats, then the quality of many jobs and the labor relations will be adjusted down accordingly, or at the very least expectations what concessions workers will make will be adjusted up. That seems to be the case unfortunately. ..."
A good economy compensates for much social dysfunction.
A bad economy moves people toward the margins, afflicts those
near the margins and kills those at the margins.
This is what policy makers should consider as they pursue policies that do not put the citizen above all else.
cm -> Avraam Jack Dectis...
"A good economy compensates for much social dysfunction."
More than that, it prevents the worst of behaviors that are considered an expression of dysfunction from occurring, as
people across all social strata have other things to worry about or keep them busy. Happy people don't bear grudges, or at least
they are not on top of their consciousness as long as things are going well.
This could be seen time and again in societies with deep and sometimes violent divisions between ethnic groups where in
times of relative prosperity (or at least a broadly shared vision for a better future) the conflicts are not removed but put on
a backburner, or there is even "finally" reconciliation, and then when the economy turns south, the old grudges and conflicts
come back (often not on their own, but fanned by groups who stand to gain from the divisions, or as a way of scapegoating)
Dune Goon said...
"backwaters of America, that economy seems to put out fewer and fewer chairs." ~~Harold Pollack~
Going up through the chairs has become so impossible for those on the slow-track. Not enough slots for all the jokers within
our once proud country of opportunities, not enough elbow room for Daniel Boone, let alone Jack Daniels! Not enough space
in this county to wet a tree when you feel the urge! Every tiny plot of space has been nailed down and fenced off, divided up
among gated communities. Why?
Because the 1% has an excessive propensity to reproduce their own kind. They are so uneducated about the responsibilities of
birth control and space conservation that they are crowding all of us off the edge of the planet. Worse yet we have begun to *ape
our betters*.
"We've only just begun!"
~~The Carpenters~
William said...
"Many of us know people who receive various public benefits, and who might not need to rely on these programs if they made
better choices, if they learned how to not talk back at work, if they had a better handle on various self-destructive behaviors,
if they were more willing to take that crappy job and forego disability benefits, etc."
George Orwell: "I doubt, however, whether the unemployed would ultimately benefit if they learned to spend their money
more economically. ... If the unemployed learned to be better managers they would be visibly better off, and I fancy it would
not be long before the dole was docked correspondingly."
cm said in reply to William...
A valid observation, but what you are commenting on is more about getting or keeping a job than managing personal finances.
Perhaps you are commenting on the aspect that when (enough) job applicants/holders define down their standards and let
employers treat them as floor mats, then the quality of many jobs and the labor relations will be adjusted down accordingly, or
at the very least expectations what concessions workers will make will be adjusted up. That seems to be the case unfortunately.
"... In a recent interview Mr. Deaton suggested that middle-aged whites have "lost the narrative of their lives." That is, their economic setbacks have hit hard because they expected better. Or to put it a bit differently, we're looking at people who were raised to believe in the American Dream, and are coping badly with its failure to come true. ..."
"... the truth is that we don't really know why despair appears to be spreading across Middle America. But it clearly is, with troubling consequences for our society... ..."
"... Some people who feel left behind by the American story turn self-destructive; others turn on the elites they feel have betrayed them. ..."
"... What we are seeing is the long term impacts of the "Reagan Revolution." ..."
"... The affected cohort here is the first which has lived with the increased financial and employment insecurity that engendered, as well as the impacts of the massive offshoring of good paying union jobs throughout their working lives. Stress has cumulative impacts on health and well-being, which are a big part of what we are seeing here. ..."
"... Lets face it, this Fed is all about goosing up asset prices to generate short term gains in economic activity. Since the early 90s, the Fed has done nothing but make policy based on Wall Street's interests. I can give them a pass on the dot com debacle but not after that. This toxic relationship between wall street and the Fed has to end. ..."
"... there was a housing bubble that most at the Fed (including Bernanke) denied right upto the middle of 2007 ..."
"... Yellen, to her credit, has admitted multiple times over the years that low rates spur search for yield that blows bubbles ..."
"... Bursting of the bubble led to unemployment for millions and U3 that went to 10% ..."
"... "You are the guys who do not consider the counterfactual where higher rates would have prevented the housing bubble in 2003-05 and that produced the great recession in the first place." ..."
"... Inequality has been rising globally, almost regardless of trade practices ..."
"... It is not some unstoppable global trend. This is neoliberal oligarchy coup d'état. Or as it often called "a quite coup". ..."
"... First of all, whether a job can or is offshored has little to do with whether it is "low skilled" but more with whether the workflow around the job can be organized in such a way that the job can be offshore. This is less a matter of "skill level" and more volume and immediacy of interaction with adjacent job functions, or movement of material across distances. ..."
"... The reason wages are stuck is that aggregate jobs are not growing, relative to workforce supply. ..."
"... BTW the primary offshore location is India, probably in good part because of good to excellent English language skills, and India's investment in STEM education and industry (especially software/services and this is even a public stereotype, but for a reason). ..."
"... Very rough figures: half a million Chicago employees may make less than $800 a week -- almost everybody should earn $800 ... ..."
"... Union busting is generally (?) understood as direct interference with the formation and operation of unions or their members. It is probably more common that employers are allowed to just go around the unions - "right to work", subcontracting non-union shops or temp/staffing agencies, etc. ..."
"... Why would people join a union and pay dues when the union is largely impotent to deliver, when there are always still enough desperate people who will (have to) take jobs outside the union system? Employers don't have to bring in scabs when they can legally go through "unencumbered" subcontractors inside or outside the jurisdiction. ..."
"... Credibility trap, fully engaged. ..."
"... The anti-knowledge of the elites is worth reading. http://billmoyers.com/2015/11/02/the-anti-knowledge-of-the-elites/ When such herd instinct and institutional overbearance connects with the credibility trap, the results may be impressive. http://jessescrossroadscafe.blogspot.com/2015/11/gold-daily-and-silver-weekly-charts-pop.html ..."
"... Suicide, once thought to be associated with troubled teens and the elderly, is quickly becoming an age-blind statistic. Middle aged Americans are turning to suicide in alarming numbers. The reasons include easily accessible prescription painkillers, the mortgage crisis and most importantly the challenge of a troubled economy. The Center for Disease Control and Prevention claims suicide rates now top the number of deaths due to automobile accidents. ..."
"... The suicide rate for both younger and older Americans remains virtually unchanged, however, the rate has spiked for those in middle age (35 to 64 years old) with a 28 percent increase (link is external) from 1999 to 2010. ..."
"... When few people kill themselves "on purpose" or die from self-inflicted but probably "unintended" harms (e.g. organ failure or accidental death caused by substance abuse), it can be shrugged off as problems related to the individual (more elaboration possible but not necessary). ..."
"... When it becomes a statistically significant phenomenon (above-noise percentage of total population or demographically identifiable groups), then one has to ask questions about social causes. My first question would be, "what made life suck for those people"? What specific instrument they used to kill themselves would be my second question (it may be the first question for people who are charged with implementing counter measures but not necessarily fixing the causes). ..."
"... Since about the financial crisis (I'm not sure about causation or coincidence - not accidental coincidence BTW but causation by the same underlying causes), there has been a disturbing pattern of high school students throwing themselves in front of local trains. At that age, drinking or drugging oneself to death is apparently not the first "choice". Performance pressure *related to* (not just "and") a lack of convincing career/life prospects has/have been suspected or named as a cause. I don't think teenagers suddenly started to jump in front of trains that have run the same rail line for decades because of the "usual" and centuries to millennia old teenage romantic relationship issues. ..."
"There is a darkness spreading over part of our society":
Despair, American Style, by Paul
Krugman, Commentary, NY Times: A couple of weeks ago President Obama mocked Republicans who are "down on America," and reinforced
his message by doing a pretty good Grumpy Cat impression. He had a point: With job growth at rates not seen since the 1990s, with
the percentage of Americans covered by health insurance hitting record highs, the doom-and-gloom predictions of his political
enemies look ever more at odds with reality.
Yet there is a darkness spreading over part of our society. ... There has been
a lot of comment ... over a new paper by the economists Angus Deaton (who just won a Nobel) and Anne Case, showing that mortality
among middle-aged white Americans has been rising since 1999..., while death rates were falling steadily both in other countries
and among other groups in our own nation.
Even more striking are the proximate causes of rising mortality. Basically, white Americans are, in increasing numbers, killing
themselves... Suicide is way up, and so are deaths from drug poisoning and ... drinking... But what's causing this epidemic of
self-destructive behavior?...
In a recent interview Mr. Deaton suggested that middle-aged whites have "lost the narrative of their lives." That is, their
economic setbacks have hit hard because they expected better. Or to put it a bit differently, we're looking at people who were
raised to believe in the American Dream, and are coping badly with its failure to come true.
That sounds like a plausible hypothesis..., but the truth is that we don't really know why despair appears to be spreading
across Middle America. But it clearly is, with troubling consequences for our society...
I know I'm not the only observer who sees a link between the despair reflected in those mortality numbers and the volatility
of right-wing politics. Some people who feel left behind by the American story turn self-destructive; others turn on the elites
they feel have betrayed them. No, deporting immigrants and wearing baseball caps bearing slogans won't solve their problems,
but neither will cutting taxes on capital gains. So you can understand why some voters have rallied around politicians who at
least seem to feel their pain.
At this point you probably expect me to offer a solution. But while universal health care, higher minimum wages, aid to education,
and so on would do a lot to help Americans in trouble, I'm not sure whether they're enough to cure existential despair.
bakho said...
There are a lot of economic dislocations that the government after the 2001 recession stopped doing much about it. Right after
the 2008 crash, the government did more but by 2010, even the Democratic president dropped the ball. and failed to deliver. Probably
no region of the country is affected more by technological change that the coal regions of KY and WV. Lying politicians promise
a return to the past that cannot be delivered. No one can suggest what the new future will be. The US is due for another round
of urbanization as jobs decline in rural areas. Dislocation forces declining values of properties and requires changes in behavior,
skills and outlook. Those personal changes do not happen without guidance. The social institutions such as churches and government
programs are a backstop, but they are not providing a way forward. There is plenty of work to be done, but our elites are not
willing to invest.
DrDick -> bakho...
The problem goes back much further than that. What we are seeing is the long term impacts of the "Reagan Revolution."
The affected cohort here is the first which has lived with the increased financial and employment insecurity that engendered,
as well as the impacts of the massive offshoring of good paying union jobs throughout their working lives. Stress has cumulative
impacts on health and well-being, which are a big part of what we are seeing here.
ilsm said...
Thuggee doom and gloom is about their fading chance to reinstate the slavocracy.
The fever swamp of right wing ideas is more loony than 1964.
Extremism is the new normal.
bmorejoe -> ilsm...
Yup. The slow death of white supremacy.
Peter K. -> Anonymous...
If it wasn't for monetary policy things would be even worse as the Republicans in Congress forced fiscal austerity on the economy
during the "recovery."
sanjait -> Peter K....
That's the painful irony of a comment like that one from Anonymous ... he seems completely unaware that, yes, ZIRP has done
a huge amount to prevent the kind of problems described above. He like most ZIRP critics fails to consider what the counterfactual
looks like (i.e., something like the Great Depression redux).
Anonymous -> sanjait...
You are the guys who do not consider the counterfactual where higher rates would have prevented the housing bubble in 2003-05
and that produced the great recession in the first place. Because preemptive monetary policy has gone out of fashion completely.
And now we are going to repeat the whole process over when the present bubble in stocks and corporate bonds bursts along with
the malinvestment in China, commodity exporters etc.
Peter K. -> Anonymous...
"liquidate labor, liquidate stocks, liquidate farmers, liquidate real estate... it will purge the rottenness out of the system.
High costs of living and high living will come down. People will work harder, live a more moral life. Values will be adjusted,
and enterprising people will pick up from less competent people."
sanjait -> Anonymous...
"You want regulation? I would like to see
1) Reinstate Glass Steagall
2) impose a 10bp trans tax on trading financial instruments."
Great. Two things with zero chance of averting bubbles but make great populist pablum.
This is why we can't have nice things!
"3) Outlaw any Fed person working for a bank/financial firm after they leave office."
This seems like a decent idea. Hard to enforce, as highly intelligent and accomplished people tend not to be accepting of such
restrictions, but it could be worth it anyway.
likbez -> sanjait...
" highly intelligent and accomplished people tend not to be accepting of such restrictions, but it could be worth it anyway."
You are forgetting that it depends on a simple fact to whom political power belongs. And that's the key whether "highly intelligent
and accomplished people" will accept those restrictions of not.
If the government was not fully captured by financial capital, then I think even limited prosecution of banksters "Stalin's
purge style" would do wonders in preventing housing bubble and 2008 financial crush.
Please try to imagine the effect of trial and exile to Alaska for some period just a dozen people involved in Securitization
of mortgages boom (and those highly intelligent people can do wonders in improving oil industry in Alaska ;-).
Starting with Mr. Weill, Mr. Greenspan, Mr. Rubin, Mr. Phil Gramm, Dr. Summers and Mr. Clinton.
Anonymous -> Peter K....
"2003-2005 didn't have excess inflation and wage gains."
Monetary policy can not hinge just on inflation or wage gains. Why are wage gains a problem anyway?
Lets face it, this Fed is all about goosing up asset prices to generate short term gains in economic activity. Since the
early 90s, the Fed has done nothing but make policy based on Wall Street's interests. I can give them a pass on the dot com debacle
but not after that. This toxic relationship between wall street and the Fed has to end.
You want regulation? I would like to see
1) Reinstate Glass Steagall
2) impose a 10bp trans tax on trading financial instruments.
3) Outlaw any Fed person working for a bank/financial firm after they leave office. Bernanke, David Warsh etc included. That includes
Mishkin getting paid to shill for failing Iceland banks or Bernanke making paid speeches to hedge funds.
Anonymous -> EMichael...
Fact: there was a housing bubble that most at the Fed (including Bernanke) denied right upto the middle of 2007
Fact: Yellen, to her credit, has admitted multiple times over the years that low rates spur search for yield that blows bubbles
Fact: Bursting of the bubble led to unemployment for millions and U3 that went to 10%
what facts are you referring to?
EMichael -> Anonymous...
That FED rates caused the bubble.
to think this you have to ignore that a 400% Fed Rate increase from 2004 to 2005 had absolutely no effect on mortgage originations.
Then of course, you have to explain why 7 years at zero has not caused another housing bubble.
Correlation is not causation. Lack of correlation is proof of lack of causation.
pgl -> Anonymous...
"You are the guys who do not consider the counterfactual where higher rates would have prevented the housing bubble
in 2003-05 and that produced the great recession in the first place."
You are repeating the John B. Taylor line about interest rates being held "too low and too long". And guess what - most economists
have called Taylor's claim for the BS it really is. We should also note we never heard this BS when Taylor was part of the Bush
Administration. And do check - Greenspan and later Bernanke were raising interest rates well before any excess demand was generated
which is why inflation never took off.
So do keep repeating this intellectual garbage and we keep noting you are just a stupid troll.
Rising morbidity and mortality in midlife among white non-Hispanic Americans in the 21st century
By Anne Case and Angus Deaton
Midlife increases in suicides and drug poisonings have been previously noted. However, that these upward trends were persistent
and large enough to drive up all-cause midlife mortality has, to our knowledge, been overlooked. If the white mortality rate for
ages 45−54 had held at their 1998 value, 96,000 deaths would have been avoided from 1999–2013, 7,000 in 2013 alone. If it had
continued to decline at its previous (1979‒1998) rate, half a million deaths would have been avoided in the period 1999‒2013,
comparable to lives lost in the US AIDS epidemic through mid-2015. Concurrent declines in self-reported health, mental health,
and ability to work, increased reports of pain, and deteriorating measures of liver function all point to increasing midlife distress.
Abstract
This paper documents a marked increase in the all-cause mortality of middle-aged white non-Hispanic men and women in the United
States between 1999 and 2013. This change reversed decades of progress in mortality and was unique to the United States; no other
rich country saw a similar turnaround. The midlife mortality reversal was confined to white non-Hispanics; black non-Hispanics
and Hispanics at midlife, and those aged 65 and above in every racial and ethnic group, continued to see mortality rates fall.
This increase for whites was largely accounted for by increasing death rates from drug and alcohol poisonings, suicide, and chronic
liver diseases and cirrhosis. Although all education groups saw increases in mortality from suicide and poisonings, and an overall
increase in external cause mortality, those with less education saw the most marked increases. Rising midlife mortality rates
of white non-Hispanics were paralleled by increases in midlife morbidity. Self-reported declines in health, mental health, and
ability to conduct activities of daily living, and increases in chronic pain and inability to work, as well as clinically measured
deteriorations in liver function, all point to growing distress in this population. We comment on potential economic causes and
consequences of this deterioration.
ilsm -> Sarah...
Murka is different. Noni's plan would work if it were opportune for the slavocracy and the Kochs and ARAMCO don't lose any
"growth".
Maybe cost plus climate repair contracts to shipyards fumbling through useless nuclear powered behemoths for war plans made
in 1942.
Someone gotta make big money plundering for the public good, in Murka!
CSP said...
The answers to our malaise seem readily apparent to me, and I'm a southern-born white male working in a small, struggling Georgia
town.
1. Kill the national war machine
2. Kill the national Wall Street financial fraud machine
3. Get out-of-control mega corporations under control
4. Return savings to Main Street (see #1, #2 and #3)
5. Provide national, universal health insurance to everyone as a right
6. Provide free education to everyone, as much as their academic abilities can earn them
7. Strengthen social security and lower the retirement age to clear the current chronic underemployment of young people
It seems to me that these seven steps would free the American people to pursue their dreams, not the dreams of Washington or
Wall Street. Unfortunately, it is readily apparent that true freedom and real individual empowerment are the last things our leaders
desire. Shame on them and shame on everyone who helps to make it so.
DeDude -> CSP...
You are right. Problem is that most southern-born white males working in a small, struggling Georgia town would rather die
than voting for the one candidate who might institute those changes - Bernie Sanders.
The people who are beginning to realize that the american dream is a mirage, are the same people who vote for GOP candidates
who want to give even more to the plutocrats.
kthomas said...
The kids in Seattle had it right when WTO showed up.
Why is anyone suprised by all this?
We exported out jobs. First all the manufacturing. Now all of the Service jobs.
But hey...we helped millions in China and India get out of poverty, only to put outselves into it.
America was sold to highest bidder a long long time ago. A Ken Melvin put it, the chickens came home to roost in 2000.
sanjait -> kthomas...
So you think the problem with America is that we lost our low skilled manufacturing and call center tech support jobs?
I can sort of see why people assume that "we exported out jobs" is the reason for stagnant incomes in the U.S., but it's still
tiresome, because it's still just wrong.
Manufacturing employment crashed in the US mostly because it has been declining globally. The world economy is less material
based than ever, and machines do more of the work making stuff.
And while some services can be outsourced, the vast majority can't. Period.
Inequality has been rising globally, almost regardless of trade practices. The U.S. has one of the more closed economies in
the developed world, so if globalization were the cause, we'd be the most insulated. But we aren't, which should be a pretty good
indication that globalization isn't the cause.
cm -> sanjait...
Yes, the loss of "low skilled" jobs is still a loss of jobs. Many people work in "low skilled" jobs because there are not enough
"higher skill" jobs to go around, as most work demanded is not of the most fancy type.
We have heard this now for a few decades, that "low skilled" jobs lost will be replaced with "high skill" (and better paid)
jobs, and the evidence is somewhat lacking. There has been growth in higher skill jobs in absolute terms, but when you adjust
by population growth, it is flat or declining.
When people hypothetically or actually get the "higher skills" recommended to them, into what higher skill jobs are they to
move?
I have known a number of anecdotes of people with degrees or who held "skilled" jobs that were forced by circumstances to take
commodity jobs or jobs at lower pay grades or "skill levels" due to aggregate loss of "higher skill" jobs or age discrimination,
or had to go from employment to temp jobs.
And it is not true that only "lower skill" jobs are outsourced. Initially, yes, as "higher skills" obviously don't exist yet
in the outsourcing region. But that doesn't last long, especially if the outsourcers expend resources to train and grow the remote
skill base, at the expense of the domestic workforce which is expected to already have experience (which has worked for a while
due to workforce overhangs from previous industry "restructuring").
likbez -> sanjait...
"Inequality has been rising globally, almost regardless of trade practices."
It is not some unstoppable global trend. This is neoliberal oligarchy coup d'état. Or as it often called "a quite coup".
sanjait -> cm...
"Yes, the loss of "low skilled" jobs is still a loss of jobs. Many people work in "low skilled" jobs because there
are not enough "higher skill" jobs to go around, as most work demanded is not of the most fancy type.
We have heard this now for a few decades, that "low skilled" jobs lost will be replaced with "high skill" (and better
paid) jobs, and the evidence is somewhat lacking. "
And that is *exactly my point.*
The lack of wage growth isn't isolated to low skilled domains. It's weak across the board.
What does that tell us?
It tells us that offshoring of low skilled jobs isn't the problem.
"And it is not true that only "lower skill" jobs are outsourced. Initially, yes, as "higher skills" obviously don't exist
yet in the outsourcing region."
You could make this argument, but I think (judging by your own hedging) you know this isn't the case. Offshoring of higher
skilled jobs does happen but it's a marginal factor in reality. You hypothesize that it may someday become a bigger factor ...
but just notice that we've had stagnant wages now for a few decades.
My point is that offshoring IS NOT THE CAUSE of stagnating wages. I'd argue that globalization is a force that can't really
be stopped by national policy anyway, but even if you think it could, it's important to realize IT WOULD DO ALMOST NOTHING to
alleviate inequality.
cm -> sanjait...
I was responding to your point:
"So you think the problem with America is that we lost our low skilled manufacturing and call center tech support jobs?"
With the follow-on:
"I can sort of see why people assume that "we exported out jobs" is the reason for stagnant incomes in the U.S., but
it's still tiresome, because it's still just wrong."
Labor markets are very sensitive to marginal effects. If let's say "normal" or "heightened" turnover is 10% p.a. spread out
over the year, then the continued availability (or not) of around 1% vacancies (for the respective skill sets etc.) each month
makes a huge difference. There was the argument that the #1 factor is automation and process restructuring, and offshoring is
trailing somewhere behind that in job destruction volume.
I didn't research it in detail because I have no reason to doubt it. But it is a compounded effect - every percentage point
in open positions (and *better* open positions - few people are looking to take a pay cut) makes a big difference. If let's say
the automation losses are replaced with other jobs, offshoring will tip the scale. Due to aggregate effects one cannot say what
is the "extra" like with who is causing congestion on a backed up road (basically everybody, not the first or last person to join).
"Manufacturing employment crashed in the US mostly because it has been declining globally. The world economy is less
material based than ever, and machines do more of the work making stuff."
Are you kidding me? The world economy is less material based? OK maybe 20 years after the paperless office we are finally printing
less, but just because the material turnover, waste, and environmental pollution is not in your face (because of offshoring!),
it doesn't mean less stuff is produced or material consumed. If anything, it is market saturation and aggregate demand limitations
that lead to lower material and energy consumption (or lower growth rates).
In the aftermath of the financial crisis, several nations (US and Germany among others) had programs to promote new car sales
(cash for clunkers etc.) that were based on the idea that people can get credit for their old car, but its engine had to be destroyed
and made unrepairable so it cannot enter the used car market and defeat the purpose of the program. I assume the clunkers were
then responsibly and sustainably recycled.
cm -> sanjait...
"The lack of wage growth isn't isolated to low skilled domains. It's weak across the board.
What does that tell us?
It tells us taht offshoring of low skilled jobs isn't the problem."
This doesn't follow. First of all, whether a job can or is offshored has little to do with whether it is "low skilled"
but more with whether the workflow around the job can be organized in such a way that the job can be offshore. This is less a
matter of "skill level" and more volume and immediacy of interaction with adjacent job functions, or movement of material across
distances. Also consider that aside from time zone differences (which are of course a big deal between e.g. US and Europe/Asia),
there is not much difference whether a job is performed in another country or in a different domestic region, or perhaps just
"working from home" 1 mile from the office, for office-type jobs. Of course the other caveat is whether the person can physically
attend meetings with little fuss and expense - so remote management/coordination work is naturally not a big thing.
The reason wages are stuck is that aggregate jobs are not growing, relative to workforce supply. When the boomers
retire for real in another 5-10 years, that may change. OTOH several tech companies I know have periodic programs where they offer
workers over 55 or so packages to leave the company, so they cannot really hurt for talent, though they keep complaining and are
busy bringing in young(er) people on work visa. Free agents, it depends on the company. Some companies hire NCGs, but they also
"buy out" older workers.
cm -> cm...
Caveat: Based on what I see (outside sectors with strong/early growth), domestic hiring of NCGs/"fresh blood" falls in two
categories:
Location bound jobs (sales, marketing, legal, HR, administration, ..., also functions attached to those or otherwise preferring
"cultural affinity") - which are largely staffed with locals, also foreigners (visa as well as free agent (green card/citizen))
"Technical functions" and "technical" back office (i.e. little or no customer contact) - predominantly foreigners on visa
(e.g. graduates of US colleges), though some "free agent" hiring may happen depending on circumstances
Then there is also the gender split - "technical/engineering" jobs are overweighed in men, except technical jobs in traditionally
"non-technical/non-product" departments which have a higher share of women.
All this is of course a matter of top-down hiring preferences, as generally everything is either controlled top-down or tacitly
allowed to happen by selective non-interference.
cm -> sanjait...
"You could make this argument, but I think (judging by your own hedging) you know this isn't the case. Offshoring of
higher skilled jobs does happen but it's a marginal factor in reality. You hypothesize that it may someday become a bigger
factor ... but just notice that we've had stagnant wages now for a few decades."
I've written a lot of text so far but didn't address all points ...
My "hedging" is retrospective. I don't hypothesize what may eventually happen but it is happening here and now. I don't presume
to present a representative picture, but in my sphere of experience/observation (mostly a subset of computer software), offshoring
of *knowledge work* started in the mid to late 90's (and that's not the earliest it started in general - of course a lot of the
early offshoring in the 80's was market/language specific customization, e.g. US tech in Europe etc., and more "local culture
expertise" and not offshoring proper). In the late 90's and early 2000's, offshoring was overshadowed by the Y2K/dotcom booms,
so that phase didn't get high visibility (among the people "affected" it sure did). Also the internet was not yet ubiquitous -
broadband existed only at the corporate level.
15-20 years ago it was testing and "low level" programming, perhaps self contained limited-complexity functions or modules
written to fairly rigid specifications, or troubleshooting and bug fixes implemented here or there.
Then 10-15 years ago it advanced to offshore product maintenance, following up on QA issues, small development projects,
or assisting/supporting roles in "real" projects (either conducted offshore or people visiting the domestic offices for weeks
to months).
This went on in parallel with domestic visa workers from the first 15-20 years ago wave either being encouraged or themselves
expressing a desire to go back home (personal, career, family reasons etc.) and "spread the knowledge" and advancing into technical/organization
management roles.
Then 5-10 years ago with clearly grown offshore skills (my theory is that people everywhere are cut from the same cloth,
and we are now at 10+ years industry experience in this narrative), the offshore sites started taking on ownership of product
components, while all the "previous" functions of testing, R&D support, tech pub (which I didn't mention earlier), etc. remained
and evolved further. Also IT (though IT support is more timezone bound and is thus present in all time zones).
Since then there has been little change, it is pretty much a steady state.
BTW the primary offshore location is India, probably in good part because of good to excellent English language skills,
and India's investment in STEM education and industry (especially software/services and this is even a public stereotype, but
for a reason).
Syaloch -> sanjait...
Whether low skilled jobs were eliminated due to offshoring or automation doesn't really matter. What matters is that the jobs
disappeared, replaced by a small number of higher skill jobs paying comparable wages plus a large number of low skill jobs offering
lower wages.
The aggregate effect was stagnation and even decline in living standards. Plus any new jobs were not necessarily produced in
the same geographic region as those that were lost, leading to concentration of unemployment and despair.
sanjait -> Syaloch...
"Whether low skilled jobs were eliminated due to offshoring or automation doesn't really matter. "
Well, actually it does matter, because we have a whole lot of people (in both political parties) who think the way to fight
inequality is to try to reverse globalization.
If they are incorrect, it matters, because they should be applying their votes and their energy to more effective solutions,
and rejecting the proposed solutions of both the well-meaning advocates and the outright demagogues who think restricting trade
is some kind of answer.
Syaloch -> sanjait...
I meant it doesn't matter in terms of the despair felt by those affected. All that matters to those affected is that they have
been obsoleted without either economic or social support to help them.
However, in terms of addressing this problem economically it really doesn't matter that much either. Offshoring is effectively
a low-tech form of automation. If companies can't lower labor costs by using cheaper offshore labor they'll find ways to either
drive down domestic wages or to use less labor. For the unskilled laborer the end result is the same.
Syaloch -> Syaloch...
See the thought experiment I posted on the links thread, and then add the following:
Suppose the investigative journalist discovered instead that Freedonia itself is a sham, and that rather than being imported
from overseas, the clothing was actually coming from an automated factory straight out of Vonnegut's "Player Piano" that was hidden
in a remote domestic location. Would the people who were demanding limits on Freedonian exports now say, "Oh well, I guess that's
OK" simply because the factory was located within the US?
Dan Kervick -> kthomas...
I enjoyed listening to this talk by Fredrick Reinfeldt at the LSE:
Reinfeldt is a center-right politicians and former Swedish Prime Minister. OF course, what counts as center-right in Sweden
seems very different from what counts as center-right in the US.
Perhaps there is some kind of basis here for some bipartisan progress on jobs and full employment.
William said...
I'm sure this isn't caused by any single factor, but has anyone seriously investigated a link between this phenomena and the
military?
Veterans probably aren't a large enough cohort to explain the effect in full, but white people from the south are the most
likely group to become soldiers, and veterans are the most likely group to have alcohol/drug abuse and suicide problems.
This would also be evidence why we aren't seeing it in other countries, no one else has anywhere near the number of vets we
have.
cm -> William...
Vets are surely part of the aggregate problem of lack of career/economic prospects, in fact a lot of people join(ed) the military
because of a lack of other jobs to begin with. But as the lack of prospects is aggregate it affects everybody.
" At this point you probably expect me to offer a solution. But while universal health care, higher minimum wages, aid to
education, and so on would do a lot to help Americans in trouble, I'm not sure whether they're enough to cure existential despair."
UNOINIZED and (therefore shall we say) politicized: you are in control of your narrative -- win or lose. Can it get any more hopeful
than that? And you will probably win.
Winning being defined as labor eeking out EQUALLY emotionally satisfying/dissatisfying market results -- EQUAL that is with
the satisfaction of ownership and the consumer. That's what happens when all three interface in the market -- labor interfacing
indirectly through collective bargaining.
(Labor's monopoly neutralizes ownership's monopsony -- the consumers' willingness to pay providing the checks and balances
on labor's monopoly.)
If you feel you've done well RELATIVE to the standards of your own economic era you will feel you've done well SUBJECTIVELY.
For instance, my generation of (American born) cab drivers earned about $750 for a 60 hour (grueling) work week up to the early
80s. With multiples strip-offs I won't detail here (will on request -- diff for diff cities) that has been reduced to about $500
a week (at best I suspect!) I believe and that is just not enough to get guys like me out there for that grueling work.
Let's take the minimum wage comparison from peak-to-peak instead of from peak-to-trough: $11 and hour in 1968 -- at HALF TODAY'S
per capita income (economic output) -- to $7.25 today. How many American born workers are going to show up for $7.25 in the day
of SUVs and "up-to-date kitchens" all around us. $8.75 was perfectly enticing for Americans working in 1956 ($8.75 thanks to the
"Master of the Senate"). The recent raise to $10 is not good enough for Chicago's 100,000 gang members (out of my estimate 200,000
gang age minority males). Can hustle that much on the street w/o the SUBJECTIVE feeling of wage slavery.
Ditto hiring result for two-tier supermarket contracts after Walmart undercut the unions.
Without effective unions (centralized bargaining is the gold standard: only thing that fends off Walmart type contract muscling.
Done that way since 1966 with the Teamsters Union's National Master Freight Agreement; the long practiced law or custom from continental
Europe to French Canada to Argentina to Indonesia.
It occurred to me this morning that if the quintessential example of centralized bargaining Germany has 25% or our population
and produces 200% more cars than we do, then, Germans produces 8X as many cars per capita than we do!
And thoroughly union organized Germans feel very much in control of the narrative of their lives.
No longer thoroughly, with recent labor market reforms the door has likewise been blown open to contingent workforces, staffing
agencies, and similar forms of (perma) temp work. And moving work to nations with lower labor standards (e.g. "peripheral" Europe,
less so outside Europe) has been going on for decades, for parts, subassembly, and even final assembly.
Very rough figures: half a million Chicago employees may make less than $800 a week -- almost everybody should earn $800
...
... putative minimum wage? -- might allow some slippage in high labor businesses like fast food restaurants; 33% labor costs!
-- sort of like the Teamsters will allow exceptions when needed from Master agreements if you open up your books, they need your
working business too, consumer ultimately sets limits.
Average raise of $200 a week -- $10,000 a year equals $5 billion shift in income -- out of a $170 billion Chicago GDP (1% of
national) -- not too shabby to bring an end to gang wars and Despair American Style.
Just takes making union busting a felony LIKE EVERY OTHER FORM OF UNFAIR MARKET MUSCLING (even taking a movie in the movies).
The body of laws are there -- the issues presumably settled -- the enforcement just needs "dentures."
Union busting is generally (?) understood as direct interference with the formation and operation of unions or their members.
It is probably more common that employers are allowed to just go around the unions - "right to work", subcontracting non-union
shops or temp/staffing agencies, etc.
Why would people join a union and pay dues when the union is largely impotent to deliver, when there are always still enough
desperate people who will (have to) take jobs outside the union system? Employers don't have to bring in scabs when they can legally
go through "unencumbered" subcontractors inside or outside the jurisdiction.
cm -> cm...
It comes down to the collective action problem. You can organize people who form a "community" (workers in the same business
site, or similar aggregates more or less subject to Dunbar's number or with a strong tribal/ethnic/otherwise cohesion narrative).
Beyond that, if you can get a soapbox in the regional press, etc., otherwise good luck. It probably sounds defeatist but I don't
have a solution.
When the union management is outed for corruption or other abuses or questioable practices (e.g. itself employing temps or
subcontractors), it doesn't help.
Syaloch said...
There was a good discussion of this on last Friday's Real Time with Bill Maher.
Surprisingly, I pretty much agree with David Frum's analysis -- and Maher's comment that Trump, with his recent book, "Crippled
America", has his finger on the pulse of this segment of the population. Essentially what we're seeing is the impact of economic
stagnation upon a culture whose reserves of social capital have been depleted, as described in Robert Putnam's "Bowling Alone".
When the going gets tough it's a lot harder to manage without a sense of identity and purpose, and without the support of family,
friends, churches, and communities. Facebook "friends" are no substitute for the real thing.
Peter K. said...
Jared Bernsetin:
"...since the late 1970s, we've been at full employment only 30 percent of the time (see the data note below for an explanation
of how this is measured). For the three decades before that, the job market was at full employment 70 percent of the time."
We need better macro (monetary, fiscal, trade) policy.
Maybe middle-aged blacks and hispanics have better attitudes and health since they made it through a tough youth, have more
realistic expectations and race relations are better than the bad old days even if they are far from perfect. The United States
is becoming more multicultural.
Suicide, once thought to be associated with troubled teens and the elderly, is quickly becoming an age-blind statistic.
Middle aged Americans are turning to suicide in alarming numbers. The reasons include easily accessible prescription painkillers,
the mortgage crisis and most importantly the challenge of a troubled economy. The Center for Disease Control and Prevention claims
suicide rates now top the number of deaths due to automobile accidents.
The suicide rate for both younger and older Americans remains virtually unchanged, however, the rate has spiked for those
in middle age (35 to 64 years old) with a 28 percent increase (link is external) from 1999 to 2010. The rate for whites in
middle-age jumped an alarming 40 percent during the same time frame. According to the CDC, there were more than 38,000 suicides
(link is external) in 2010 making it the tenth leading cause of death in America overall (third leading cause from age 15-24).
The US 2010 Final Data quantifies the US statistics for suicide by race, sex and age. Interestingly, African-American suicides
have declined and are considerably lower than whites. Reasons are thought to include better coping skills when negative things
occur as well as different cultural norms with respect to taking your own life. Also, Blacks (and Hispanics) tend to have stronger
family support, community support and church support to carry them through these rough times.
While money woes definitely contribute to stress and poor mental health, it can be devastating to those already prone to depression
-- and depression is indeed still the number one risk factor for suicide. A person with no hope and nowhere to go, can now easily
turn to their prescription painkiller and overdose, bringing the pain, stress and worry to an end. In fact, prescription painkillers
were the third leading cause of suicide (and rising rapidly) for middle aged Americans in 2010 (guns are still number 1). ...
cm -> Fred C. Dobbs...
When few people kill themselves "on purpose" or die from self-inflicted but probably "unintended" harms (e.g. organ failure
or accidental death caused by substance abuse), it can be shrugged off as problems related to the individual (more elaboration
possible but not necessary).
When it becomes a statistically significant phenomenon (above-noise percentage of total population or demographically identifiable
groups), then one has to ask questions about social causes. My first question would be, "what made life suck for those people"?
What specific instrument they used to kill themselves would be my second question (it may be the first question for people who
are charged with implementing counter measures but not necessarily fixing the causes).
Since about the financial crisis (I'm not sure about causation or coincidence - not accidental coincidence BTW but causation
by the same underlying causes), there has been a disturbing pattern of high school students throwing themselves in front of local
trains. At that age, drinking or drugging oneself to death is apparently not the first "choice". Performance pressure *related
to* (not just "and") a lack of convincing career/life prospects has/have been suspected or named as a cause. I don't think teenagers
suddenly started to jump in front of trains that have run the same rail line for decades because of the "usual" and centuries
to millennia old teenage romantic relationship issues.
"... If returns to experience are in decline, if wisdom no longer pays off, then that might help suggest why a group of mostly older people who are not, as a group, disadvantaged might become convinced that the country has taken a turn for the worse. It suggests why their grievances should so idealize the past, and why all the talk about coal miners and factories, jobs in which unions have codified returns to experience into the salary structure, might become such a fixation. ..."
The Despair of Learning That Experience No Longer Matters
April 10, 2017
.....................
The arguments about Case and Deaton's work have been an echo of the one that consumed so much of the primary campaign, and
then the general election, and which is still unresolved: whether the fury of Donald Trump's supporters came from cultural and
racial grievance or from economic plight. Case and Deaton's scholarship does not settle the question. As they write, more than
once, "more work is needed."
But part of what Case and Deaton offer in their new paper is an emotional logic to an economic argument.
If returns to experience are in decline, if wisdom no longer pays off, then that might help suggest why a group of mostly
older people who are not, as a group, disadvantaged might become convinced that the country has taken a turn for the worse. It
suggests why their grievances should so idealize the past, and why all the talk about coal miners and factories, jobs in which
unions have codified returns to experience into the salary structure, might become such a fixation.
Whatever comes from the deliberations over Case and Deaton's statistics, there is within their numbers an especially interesting
story.
The Jeffrey Epstein case is notable for the ups and downs in media coverage it's gotten over the years. Everybody, it seems, in
New York society knew by 2000 that Jeffrey Epstein and Ghislaine Maxwell were corrupting teenage girls, but the press wouldn't cover
it. Articles by New York in 2002 and
Vanity Fair in 2003 alluded to it gently,
while probing Epstein's finances more closely. In 2005, the Palm Beach police investigated. The county prosecutor, Democrat Barry
Krischer, wouldn't prosecute for more than prostitution, so they went to the federal prosecutor, Republican Alexander Acosta, and
got the FBI involved. Acosta's office prepared an indictment, but before it was filed, he made a deal: Epstein agreed to plead guilty
to a state law felony and receive a prison term of 18 months. In exchange, the federal interstate sex trafficking charges would not
be prosecuted by Acosta's office. Epstein was officially at the county jail for 13 months, where the county officials under Democratic
Sheriff Ric Bradshaw gave him scandalously
easy treatment , letting him spend his days outside, and letting him serve a year of probation in place of the last 5 months
of his sentence. Acosta's office complained, but it was a county jail, not a federal jail, so he was powerless.
Epstein was released, and various lawsuits were filed against him and settled out of court, presumably in exchange for silence.
The media was quiet or complimentary as Epstein worked his way back into high society. Two books were written about the affair, and
fell flat.
The FBI became interested again around 2011 (
a little known fact
) and maybe things were happening behind the scenes, but the next big event was in 2018 when the Miami Herald published a
series of investigative articles rehashing what had happened. In 2019 federal prosecutors indicted Epstein, he was put in jail, and
he mysteriously died.
Now, after much complaining in the press about how awful jails are and how many people commit suicide, things are quiet again,
at least until the Justice Department and
the State of Florida finish their
investigation a few years from now. (For details and more links, see " Investigation: Jeffrey Epstein
"at Medium.com and " Jeffrey Epstein " at Wikipedia
.)
I am shocked that nobody is asking Barr why Epstein's autopsy hasn't been made public.
Also, why is nobody asking Acosta who
told him that Epstein should be treated gently because he "belongs to intelligence" and what they meant by that. Rumor is that
Mueller told him. So, Mueller has been making the rounds, yet nobody asks him.
Also, Epstein's seized video collection shows various individuals committing serious crimes so why is nobody going through
it and charging those individuals who can be identified? Is the DOJ now of the opinion that these crimes are not important enough
to pursue? And if they should point to a blackmailing operation involving a major intelligence service, that might be worth exposing?
I feel like I am almost the only person in the world asking.
Society has been corrupted by the promotion of cost-benefit moral thinking to a point where nobody can be trusted to do their
job if they think it might be 'better overall' to act corruptly.
I keep thinking of innocent Joe DiGenova assuring us that however frustrating it has been in the past, the appointment of Bob
Barr will turn everything around. Nonsense. Barr is a fat man, and as James Watson reminds us, you never want to give a fat man
a critical job. So far he is acting like a fat man. Firing a couple minor players is window dressing at best.
It is unclear why he calls this "incompetence". Tories clearly want to sabotage the deal and at the same time save face. That's
a very tricky task and mistakes were made.
Notable quotes:
"... Politically the Tories have no plan at all, and when the clock stops on Brexit they will completely implode. The Tories are so deadlocked on Brexit that they can't even talk to themselves. ..."
"... You know the conservative party is full of incompetent wankers when the business community prefers a radical socialist over them. ..."
"... Christian Schulz at Citi says "perhaps" Corbyn is no longer as bad an option as no deal, while Deutsche's Oliver Harvey says fears about the Labour leader "may be overstated". ..."
"... "It is not that the financiers favour the opposition leader's plans for 'higher taxes, tighter labour laws, spending increases and the nationalisation of network industries', but that this may cause less harm than leaving the EU without a deal" says the Telegraph. ..."
gjohnsit on Fri, 09/06/2019 - 12:07pm A little over a year ago I wrote
this .
Politically the Tories have no plan at all, and when the clock stops on Brexit they will completely implode. The Tories are
so deadlocked on Brexit that they can't even talk to themselves.
...This is a political and economic disaster, not just waiting to happen, but firmly scheduled...unless Labour's neoliberal
Blairites save them, the Tory government is headed for an epic collapse.
It's rare that my predictions are 100% accurate, but this time I totally nailed it. To give you an idea of how badly the Tories
have bungled things, look at these two headlines.
You know the conservative party is full of incompetent wankers when the business community prefers a
radical socialist over
them.
But while Corbyn may be less popular than no deal among the public, The Daily Telegraph says "the scourge of bankers and avowed
opponent of capitalism, is winning support from unexpected new quarters" with two of the biggest global banks operating in the
City of London "warming to the Labour leader".
According to the paper, he is now seen as the lesser of two evils by analysts at Citibank and Deutsche Bank, two titans of
the financial system.
Christian Schulz at Citi says "perhaps" Corbyn is no longer as bad an option as no deal, while Deutsche's Oliver Harvey
says fears about the Labour leader "may be overstated".
"It is not that the financiers favour the opposition leader's plans for 'higher taxes, tighter labour laws, spending increases
and the nationalisation of network industries', but that this may cause less harm than leaving the EU without a deal" says the
Telegraph.
To put this sentiment in
hard numbers , a coalition led by his party would spur the pound more than 5%.
As for those overstated fears about the Labour leader, that's because of a highly coordinated three year smear campaign by the
very same business community.
Then, his efforts to secure a snap general election -- with the goal of replacing the sacked lawmakers with a new slate of candidates
more aligned with his hard-Brexit views -- were scuppered when opposition Labour leader Jeremy Corbyn refused to play along.
Now, he is effectively trapped in Downing Street, with Corbyn holding the keys. The government plans to propose new elections
again on Monday, but the opposition leader says his party will only support the move when its efforts to prevent a no-deal Brexit
are locked down.
"Certainly his biggest tactical mistake so far was not to realize that it was Corbyn, as leader of the opposition, who effectively
had veto power over when a general election could be held," said Professor Tony Travers, director of the Institute of Public Affairs
at the London School of Economics.
This allows time for Corbyn to appear like a professional leader, so that when he finally allows a general election the memory
of his steady hand will be fresh in the public's mind.
Like all other Tories worldwide, Boris "Tiny" Johnson is a charlatan. Hopefully, the British People will wake up and
end their decades-long nightmare by placing him [Corbyn] in power.
As we need to do, ourselves.
edit: Added Corbyn's name to clarify that last sentence. And we, too, need to remove all Tories from power.
The value of an idea is often assessible by the number and strength of the enemies arrayed against it. Since so many entrenched
interests and Powers-That-Be and elitists/globalists are against Brexit, I'm beginning to think that deal or no deal, Brexit must
in the best interests of the 99%. Otherwise, the 1% wouldn't fight against it so hard.
@edg
I think Brexit is like tariffs. Tariffs are a good idea for the working class because it puts a cost on off-shoring jobs. BUT
the way Trump is doing it is stupid and doesn't help anyone. Same thing with Brexit. It probably helps the 99%, but not the way
the Tories are going about it.
The value of an idea is often assessible by the number and strength of the enemies arrayed against it. Since so many entrenched
interests and Powers-That-Be and elitists/globalists are against Brexit, I'm beginning to think that deal or no deal, Brexit
must in the best interests of the 99%. Otherwise, the 1% wouldn't fight against it so hard.
The fact that Blair, the City of London, and neoliberals the world over hate Brexit and especially no-deal Brexit makes me
think it's probably a good thing. Anything that chips away at the hegemony of global finance seems positive.
The fact that Blair, the City of London, and neoliberals the world over hate Brexit and especially no-deal Brexit makes
me think it's probably a good thing. Anything that chips away at the hegemony of global finance seems positive.
The key to the success of neoliberal was a bunch on bought intellectual prostitutes like Milton Friedman and the drive to
occupy economic departments of the the universities using money from the financial elite. which along with think tank continued
mercenary army of neoliberalism who fought and win the battle with weakened New Del capitalism supporters. After that
neoliberalism was from those departments like the centers of infection via indoctrination of each new generation of students.
Which is a classic mixture of Bolsheviks methods and Trotskyite theory adapted tot he need of financial oligarchy.
Essentially we see the tragedy of Lysenkoism replayed in the USA. When false theory supported by financial oligarchy and then
state forcefully suppressed all other economic thought and became the only politically correct theory in the USA and Western
Europe.
Notable quotes:
"... The neoliberal counterrevolution, in theory and policy, has reversed or undermined nearly every aspect of managed capitalism -- from progressive taxation, welfare transfers, and antitrust, to the empowerment of workers and the regulation of banks and other major industries. ..."
"... Neoliberalism's premise is that free markets can regulate themselves; that government is inherently incompetent, captive to special interests, and an intrusion on the efficiency of the market; that in distributive terms, market outcomes are basically deserved; and that redistribution creates perverse incentives by punishing the economy's winners and rewarding its losers. So government should get out of the market's way. ..."
"... Now, after nearly half a century, the verdict is in. Virtually every one of these policies has failed, even on their own terms. ..."
"... Economic power has resulted in feedback loops of political power, in which elites make rules that bolster further concentration. ..."
"... The culprit isn't just "markets" -- some impersonal force that somehow got loose again. This is a story of power using theory. The mixed economy was undone by economic elites, who revised rules for their own benefit. They invested heavily in friendly theorists to bless this shift as sound and necessary economics, and friendly politicians to put those theories into practice. ..."
"... The grand neoliberal experiment of the past 40 years has demonstrated that markets in fact do not regulate themselves. Managed markets turn out to be more equitable and more efficient. ..."
"... The British political economist Colin Crouch captured this anomaly in a book nicely titled The Strange Non-Death of Neoliberalism . Why did neoliberalism not die? As Crouch observed, neoliberalism failed both as theory and as policy, but succeeded superbly as power politics for economic elites. ..."
"... The neoliberal ascendance has had another calamitous cost -- to democratic legitimacy. As government ceased to buffer market forces, daily life has become more of a struggle for ordinary people. ..."
"... After the Berlin Wall came down in 1989, ours was widely billed as an era when triumphant liberal capitalism would march hand in hand with liberal democracy. But in a few brief decades, the ostensibly secure regime of liberal democracy has collapsed in nation after nation, with echoes of the 1930s. ..."
"... As the great political historian Karl Polanyi warned, when markets overwhelm society, ordinary people often turn to tyrants. In regimes that border on neofascist, klepto-capitalists get along just fine with dictators, undermining the neoliberal premise of capitalism and democracy as complements. ..."
"... Classically, the premise of a "free market" is that government simply gets out of the way. This is nonsensical, since all markets are creatures of rules, most fundamentally rules defining property, but also rules defining credit, debt, and bankruptcy; rules defining patents, trademarks, and copyrights; rules defining terms of labor; and so on. Even deregulation requires rules. In Polanyi's words, "laissez-faire was planned." ..."
"... Around the same time, the term neoconservative was used as a self-description by former liberals who embraced conservatism, on cultural, racial, economic, and foreign-policy grounds. Neoconservatives were neoliberals in economics. ..."
"... Lavishly funded centers and tenured chairs were underwritten by the Olin, Scaife, Bradley, and other far-right foundations to promote such variants of free-market theory as law and economics, public choice, rational choice, cost-benefit analysis, maximize-shareholder-value, and kindred schools of thought. These theories colonized several academic disciplines. All were variations on the claim that markets worked and that government should get out of the way. ..."
"... Market failure was dismissed as a rare special case; government failure was said to be ubiquitous. Theorists worked hand in glove with lobbyists and with public officials. But in every major case where neoliberal theory generated policy, the result was political success and economic failure. ..."
"... For example, supply-side economics became the justification for tax cuts, on the premise that taxes punished enterprise. ..."
"... Robert Bork's "antitrust paradox," holding that antitrust enforcement actually weakened competition, was used as the doctrine to sideline the Sherman and Clayton Acts. Supposedly, if government just got out of the way, market forces would remain more competitive because monopoly pricing would invite innovation and new entrants to the market. In practice, industry after industry became more heavily concentrated. ..."
"... Human capital theory, another variant of neoliberal application of markets to partly social questions, justified deregulating labor markets and crushing labor unions. Unions supposedly used their power to get workers paid more than their market worth. Likewise minimum wage laws. But the era of depressed wages has actually seen a decline in rates of productivity growth ..."
"... Financial deregulation is neoliberalism's most palpable deregulatory failure, but far from the only one ..."
"... Air travel has been a poster child for advocates of deregulation, but the actual record is mixed at best. Airline deregulation produced serial bankruptcies of every major U.S. airline, often at the cost of worker pay and pension funds. ..."
"... Ticket prices have declined on average over the past two decades, but the traveling public suffers from a crazy quilt of fares, declining service, shrinking seats and legroom, and exorbitant penalties for the perfectly normal sin of having to change plans. ..."
"... A similar example is the privatization of transportation services such as highways and even parking meters. In several Midwestern states, toll roads have been sold to private vendors. The governor who makes the deal gains a temporary fiscal windfall, while drivers end up paying higher tolls often for decades. Investment bankers who broker the deal also take their cut. Some of the money does go into highway improvements, but that could have been done more efficiently in the traditional way via direct public ownership and competitive bidding. ..."
"... The Affordable Care Act is a form of voucher. But the regulated private insurance markets in the ACA have not fully lived up to their promise, in part because of the extensive market power retained by private insurers and in part because the right has relentlessly sought to sabotage the program -- another political feedback loop. The sponsors assumed that competition would lower costs and increase consumer choice. But in too many counties, there are three or fewer competing plans, and in some cases just one. ..."
"... In practice, this degenerates into an infinite regress of regulator versus commercial profit-maximizer, reminiscent of Mad magazine's "Spy versus Spy," with the industry doing end runs to Congress to further rig the rules. Straight-ahead public insurance such as Medicare is generally far more efficient. ..."
"... Several forms of deregulation -- of airlines, trucking, and electric power -- began not under Reagan but under Carter. Financial deregulation took off under Bill Clinton. Democratic presidents, as much as Republicans, promoted trade deals that undermined social standards. Cost-benefit analysis by the Office of Information and Regulatory Affairs (OIRA) was more of a choke point under Barack Obama than under George W. Bush. ..."
"... Dozens of nations, from Latin America to East Asia, went through this cycle of boom, bust, and then IMF pile-on. Greece is still suffering the impact. ..."
"... In fact, Japan, South Korea, smaller Asian nations, and above all China had thrived by rejecting every major tenet of neoliberalism. Their capital markets were tightly regulated and insulated from foreign speculative capital. They developed world-class industries as state-led cartels that favored domestic production and supply. East Asia got into trouble only when it followed IMF dictates to throw open capital markets, and in the aftermath they recovered by closing those markets and assembling war chests of hard currency so that they'd never again have to go begging to the IMF ..."
"... The basic argument of neoliberalism can fit on a bumper sticker. Markets work; governments don't . If you want to embellish that story, there are two corollaries: Markets embody human freedom. And with markets, people basically get what they deserve; to alter market outcomes is to spoil the poor and punish the productive. That conclusion logically flows from the premise that markets are efficient. Milton Friedman became rich, famous, and influential by teasing out the several implications of these simple premises. ..."
"... The failed neoliberal experiment also makes the case not just for better-regulated capitalism but for direct public alternatives as well. Banking, done properly, especially the provision of mortgage finance, is close to a public utility. Much of it could be public. ..."
The
invisible hand is more like a thumb on the scale for the world's elites. That's why market
fundamentalism has been unmasked as bogus economics but keeps winning politically.This article appears in the Summer 2019 issue of The American Prospect magazine.
Subscribe here .
Since the late 1970s, we've had a grand experiment to test the claim that free markets
really do work best. This resurrection occurred despite the practical failure of laissez-faire
in the 1930s, the resulting humiliation of free-market theory, and the contrasting success of
managed capitalism during the three-decade postwar boom.
Yet when growth faltered in the 1970s, libertarian economic theory got another turn at bat.
This revival proved extremely convenient for the conservatives who came to power in the 1980s.
The neoliberal counterrevolution, in theory and policy, has reversed or undermined nearly every
aspect of managed capitalism -- from progressive taxation, welfare transfers, and antitrust, to
the empowerment of workers and the regulation of banks and other major industries.
Neoliberalism's premise is that free markets can regulate themselves; that government is
inherently incompetent, captive to special interests, and an intrusion on the efficiency of the
market; that in distributive terms, market outcomes are basically deserved; and that
redistribution creates perverse incentives by punishing the economy's winners and rewarding its
losers. So government should get out of the market's way.
By the 1990s, even moderate liberals had been converted to the belief that social objectives
can be achieved by harnessing the power of markets. Intermittent periods of governance by
Democratic presidents slowed but did not reverse the slide to neoliberal policy and doctrine.
The corporate wing of the Democratic Party approved.
Now, after nearly half a century, the verdict is in. Virtually every one of these policies
has failed, even on their own terms. Enterprise has been richly rewarded, taxes have been cut,
and regulation reduced or privatized. The economy is vastly more unequal, yet economic growth
is slower and more chaotic than during the era of managed capitalism. Deregulation has produced
not salutary competition, but market concentration. Economic power has resulted in feedback
loops of political power, in which elites make rules that bolster further concentration.
The culprit isn't just "markets" -- some impersonal force that somehow got loose again. This
is a story of power using theory. The mixed economy was undone by economic elites, who revised
rules for their own benefit. They invested heavily in friendly theorists to bless this shift as
sound and necessary economics, and friendly politicians to put those theories into
practice.
Recent years have seen two spectacular cases of market mispricing with devastating
consequences: the near-depression of 2008 and irreversible climate change. The economic
collapse of 2008 was the result of the deregulation of finance. It cost the real U.S. economy
upwards of $15 trillion (and vastly more globally), depending on how you count, far more than
any conceivable efficiency gain that might be credited to financial innovation. Free-market
theory presumes that innovation is necessarily benign. But much of the financial engineering of
the deregulatory era was self-serving, opaque, and corrupt -- the opposite of an efficient and
transparent market.
The existential threat of global climate change reflects the incompetence of markets to
accurately price carbon and the escalating costs of pollution. The British economist Nicholas
Stern has aptly termed the worsening climate catastrophe history's greatest case of market
failure. Here again, this is not just the result of failed theory. The entrenched political
power of extractive industries and their political allies influences the rules and the market
price of carbon. This is less an invisible hand than a thumb on the scale. The premise of
efficient markets provides useful cover.
The grand neoliberal experiment of the past 40 years has demonstrated that markets in fact
do not regulate themselves. Managed markets turn out to be more equitable and more
efficient. Yet the theory and practical influence of neoliberalism marches splendidly on,
because it is so useful to society's most powerful people -- as a scholarly veneer to what
would otherwise be a raw power grab. The British political economist Colin Crouch captured this
anomaly in a book nicely titled The Strange Non-Death of Neoliberalism . Why did
neoliberalism not die? As Crouch observed, neoliberalism failed both as theory and as policy,
but succeeded superbly as power politics for economic elites.
The neoliberal ascendance has had another calamitous cost -- to democratic legitimacy. As
government ceased to buffer market forces, daily life has become more of a struggle for
ordinary people. The elements of a decent middle-class life are elusive -- reliable jobs and
careers, adequate pensions, secure medical care, affordable housing, and college that doesn't
require a lifetime of debt. Meanwhile, life has become ever sweeter for economic elites, whose
income and wealth have pulled away and whose loyalty to place, neighbor, and nation has become
more contingent and less reliable.
Large numbers of people, in turn, have given up on the promise of affirmative government,
and on democracy itself. After the Berlin Wall came down in 1989, ours was widely billed as an
era when triumphant liberal capitalism would march hand in hand with liberal democracy. But in
a few brief decades, the ostensibly secure regime of liberal democracy has collapsed in nation
after nation, with echoes of the 1930s.
As the great political historian Karl Polanyi warned, when markets overwhelm society,
ordinary people often turn to tyrants. In regimes that border on neofascist, klepto-capitalists get along just fine with
dictators, undermining the neoliberal premise of capitalism and democracy as complements. Several authoritarian thugs,
playing on tribal nationalism as the antidote to capitalist cosmopolitanism, are surprisingly popular.
It's also important to appreciate that neoliberalism is not laissez-faire. Classically, the
premise of a "free market" is that government simply gets out of the way. This is nonsensical,
since all markets are creatures of rules, most fundamentally rules defining property, but also
rules defining credit, debt, and bankruptcy; rules defining patents, trademarks, and
copyrights; rules defining terms of labor; and so on. Even deregulation requires rules. In
Polanyi's words, "laissez-faire was planned."
The political question is who gets to make the rules, and for whose benefit. The
neoliberalism of Friedrich Hayek and Milton Friedman invoked free markets, but in practice the
neoliberal regime has promoted rules created by and for private owners of capital, to keep
democratic government from asserting rules of fair competition or countervailing social
interests. The regime has rules protecting pharmaceutical giants from the right of consumers to
import prescription drugs or to benefit from generics. The rules of competition and
intellectual property generally have been tilted to protect incumbents. Rules of bankruptcy
have been tilted in favor of creditors. Deceptive mortgages require elaborate rules, written by
the financial sector and then enforced by government. Patent rules have allowed agribusiness
and giant chemical companies like Monsanto to take over much of agriculture -- the opposite of
open markets. Industry has invented rules requiring employees and consumers to submit to
binding arbitration and to relinquish a range of statutory and common-law
rights.
Neoliberalism as Theory, Policy, and Power
It's worth taking a moment to unpack the term "neoliberalism." The coinage can be confusing
to American ears because the "liberal" part refers not to the word's ordinary American usage,
meaning moderately left-of-center, but to classical economic liberalism otherwise known as
free-market economics. The "neo" part refers to the reassertion of the claim that the
laissez-faire model of the economy was basically correct after all.
Few proponents of these views embraced the term neoliberal . Mostly, they called
themselves free-market conservatives. "Neoliberal" was a coinage used mainly by their critics,
sometimes as a neutral descriptive term, sometimes as an epithet. The use became widespread in
the era of Margaret Thatcher and Ronald Reagan.
To add to the confusion, a different and partly overlapping usage was advanced in the 1970s
by the group around the Washington Monthly magazine. They used "neoliberal" to mean a
new, less statist form of American liberalism. Around the same time, the term
neoconservative was used as a self-description by former liberals who embraced
conservatism, on cultural, racial, economic, and foreign-policy grounds. Neoconservatives were
neoliberals in economics.
Beginning in the 1970s, resurrected free-market theory was interwoven with both conservative
politics and significant investments in the production of theorists and policy intellectuals.
This occurred not just in well-known conservative think tanks such as the American Enterprise
Institute, Heritage, Cato, and the Manhattan Institute, but through more insidious investments
in academia. Lavishly funded centers and tenured chairs were underwritten by the Olin, Scaife,
Bradley, and other far-right foundations to promote such variants of free-market theory as law
and economics, public choice, rational choice, cost-benefit analysis,
maximize-shareholder-value, and kindred schools of thought. These theories colonized several
academic disciplines. All were variations on the claim that markets worked and that government
should get out of the way.
Each of these bodies of sub-theory relied upon its own variant of neoliberal ideology. An
intensified version of the theory of comparative advantage was used not just to cut tariffs but
to use globalization as all-purpose deregulation. The theory of maximizing shareholder value
was deployed to undermine the entire range of financial regulation and workers' rights.
Cost-benefit analysis, emphasizing costs and discounting benefits, was used to discredit a good
deal of health, safety, and environmental regulation. Public choice theory, associated with the
economist James Buchanan and an entire ensuing school of economics and political science, was
used to impeach democracy itself, on the premise that policies were hopelessly afflicted by
"rent-seekers" and "free-riders."
Market failure was dismissed as a rare special case; government failure was said to be
ubiquitous. Theorists worked hand in glove with lobbyists and with public officials. But in
every major case where neoliberal theory generated policy, the result was political success and
economic failure.
For example, supply-side economics became the justification for tax cuts, on the premise
that taxes punished enterprise. Supposedly, if taxes were cut, especially taxes on capital and
on income from capital, the resulting spur to economic activity would be so potent that
deficits would be far less than predicted by "static" economic projections, and perhaps even
pay for themselves. There have been six rounds of this experiment, from the tax cuts sponsored
by Jimmy Carter in 1978 to the immense 2017 Tax Cuts and Jobs Act signed by Donald Trump. In
every case some economic stimulus did result, mainly from the Keynesian jolt to demand, but in
every case deficits increased significantly. Conservatives simply stopped caring about
deficits. The tax cuts were often inefficient as well as inequitable, since the loopholes
steered investment to tax-favored uses rather than the most economically logical ones. Dozens
of America's most profitable corporations paid no taxes.
Robert Bork's "antitrust paradox," holding that antitrust enforcement actually weakened
competition, was used as the doctrine to sideline the Sherman and Clayton Acts. Supposedly, if
government just got out of the way, market forces would remain more competitive because
monopoly pricing would invite innovation and new entrants to the market. In practice, industry
after industry became more heavily concentrated. Incumbents got in the habit of buying out
innovators or using their market power to crush them. This pattern is especially insidious in
the tech economy of platform monopolies, where giants that provide platforms, such as Google
and Amazon, use their market power and superior access to customer data to out-compete rivals
who use their platforms. Markets, once again, require rules beyond the benign competence of the
market actors themselves. Only democratic government can set equitable rules. And when
democracy falters, undemocratic governments in cahoots with corrupt private plutocrats will
make the rules.
Human capital theory, another variant of neoliberal application of markets to partly social
questions, justified deregulating labor markets and crushing labor unions. Unions supposedly
used their power to get workers paid more than their market worth. Likewise minimum wage laws.
But the era of depressed wages has actually seen a decline in rates of productivity growth.
Conversely, does any serious person think that the inflated pay of the financial moguls who
crashed the economy accurately reflects their contribution to economic activity? In the case of
hedge funds and private equity, the high incomes of fund sponsors are the result of transfers
of wealth and income from employees, other stakeholders, and operating companies to the fund
managers, not the fruits of more efficient management.
There is a broad literature discrediting this body of pseudo-scholarly work in great detail.
Much of neoliberalism represents the ever-reliable victory of assumption over evidence. Yet
neoliberal theory lived on because it was so convenient for elites, and because of the inertial
power of the intellectual capital that had been created. The well-funded neoliberal habitat has
provided comfortable careers for two generations of scholars and pseudo-scholars who migrate
between academia, think tanks, K Street, op-ed pages, government, Wall Street, and back again.
So even if the theory has been demolished both by scholarly rebuttal and by events, it thrives
in powerful institutions and among their political allies.
The Practical Failure of
Neoliberal Policies
Financial deregulation is neoliberalism's most palpable deregulatory failure, but far from
the only one. Electricity deregulation on balance has increased monopoly power and raised costs
to consumers, but has failed to offer meaningful "shopping around" opportunities to bring down
prices. We have gone from regulated monopolies with predictable earnings, costs, wages, and
consumer protections to deregulated monopolies or oligopolies with substantial pricing power.
Since the Bell breakup, the telephone system tells a similar story of re-concentration,
dwindling competition, price-gouging, and union-bashing.
Air travel has been a poster child for advocates of deregulation, but the actual record is
mixed at best. Airline deregulation produced serial bankruptcies of every major U.S. airline,
often at the cost of worker pay and pension funds.
Ticket prices have declined on average over
the past two decades, but the traveling public suffers from a crazy quilt of fares, declining
service, shrinking seats and legroom, and exorbitant penalties for the perfectly normal sin of
having to change plans. Studies have shown that fares actually declined at a faster rate in the
20 years before deregulation in 1978 than in the 20 years afterward, because the prime source
of greater efficiency in airline travel is the introduction of more fuel-efficient planes.
The
roller-coaster experience of airline profits and losses has reduced the capacity of airlines to
purchase more fuel-efficient aircraft, and the average age of the fleet keeps increasing. The
use of "fortress hubs" to defend market pricing power has reduced the percentage of nonstop
flights, the most efficient way to fly from one point to another.
Robert Bork's spurious arguments that antitrust enforcement hurt competition became the
basis for dismantling antitrust. Massive concentration resulted. Charles Tasnadi/AP Photo
In addition to deregulation, three prime areas of practical neoliberal policies are the use
of vouchers as "market-like" means to social goals, the privatization of public services, and
the use of tax subsides rather than direct outlays. In every case, government revenues are
involved, so this is far from a free market to begin with. But the premise is that market
disciplines can achieve public purposes more efficiently than direct public provision.
The evidence provides small comfort for these claims. One core problem is that the programs
invariably give too much to the for-profit middlemen at the expense of the intended
beneficiaries. A related problem is that the process of using vouchers and contracts invites
corruption. It is a different form of "rent-seeking" -- pursuit of monopoly profits -- than
that attributed to government by public choice theorists, but corruption nonetheless. Often,
direct public provision is far more transparent and accountable than a web of contractors.
A further problem is that in practice there is often far less competition than imagined,
because of oligopoly power, vendor lock-in, and vendor political influence. These experiments
in marketization to serve social goals do not operate in some Platonic policy laboratory, where
the only objective is true market efficiency yoked to the public good. They operate in the
grubby world of practical politics, where the vendors are closely allied with conservative
politicians whose purposes may be to discredit social transfers entirely, or to reward
corporate allies, or to benefit from kickbacks either directly or as campaign
contributions.
Privatized prisons are a case in point. A few large, scandal-ridden companies have gotten
most of the contracts, often through political influence. Far from bringing better quality and
management efficiency, they have profited by diverting operating funds and worsening conditions
that were already deplorable, and finding new ways to charge inmates higher fees for necessary
services such as phone calls. To the extent that money was actually saved, most of the savings
came from reducing the pay and professionalism of guards, increasing overcrowding, and
decreasing already inadequate budgets for food and medical care.
A similar example is the privatization of transportation services such as highways and even
parking meters. In several Midwestern states, toll roads have been sold to private vendors. The
governor who makes the deal gains a temporary fiscal windfall, while drivers end up paying
higher tolls often for decades. Investment bankers who broker the deal also take their cut.
Some of the money does go into highway improvements, but that could have been done more
efficiently in the traditional way via direct public ownership and competitive bidding.
Housing vouchers substantially reward landlords who use the vouchers to fill empty houses
with poor people until the neighborhood gentrifies, at which point the owner is free to quit
the program and charge market rentals. Thus public funds are used to underwrite a privately
owned, quasi-social housing sector -- whose social character is only temporary. No permanent
social housing is produced despite the extensive public outlay. The companion use of tax
incentives to attract passive investment in affordable housing promotes economically
inefficient tax shelters, and shunts public funds into the pockets of the investors -- money
that might otherwise have gone directly to the housing.
The Affordable Care Act is a form of voucher. But the regulated private insurance markets in
the ACA have not fully lived up to their promise, in part because of the extensive market power
retained by private insurers and in part because the right has relentlessly sought to sabotage
the program -- another political feedback loop. The sponsors assumed that competition would
lower costs and increase consumer choice. But in too many counties, there are three or fewer
competing plans, and in some cases just one.
As more insurance plans and hospital systems become for-profit, massive investment goes into
such wasteful activities as manipulation of billing, "risk selection," and other gaming of the
rules. Our mixed-market system of health care requires massive regulation to work with
tolerable efficiency. In practice, this degenerates into an infinite regress of regulator
versus commercial profit-maximizer, reminiscent of Mad magazine's "Spy versus Spy," with
the industry doing end runs to Congress to further rig the rules. Straight-ahead public
insurance such as Medicare is generally far more efficient.
An extensive literature has demonstrated that for-profit voucher schools do no better and
often do worse than comparable public schools, and are vulnerable to multiple forms of gaming
and corruption. Proprietors of voucher schools are superb at finding ways of excluding costly
special-needs students, so that those costs are imposed on what remains of public schools; they
excel at gaming test results. While some voucher and charter schools, especially nonprofit
ones, sometimes improve on average school performance, so do many public schools. The record is
also muddied by the fact that many ostensibly nonprofit schools contract out management to
for-profit companies.
Tax preferences have long been used ostensibly to serve social goals. The Earned Income Tax
Credit is considered one of the more successful cases of using market-like measures -- in this
case a refundable tax credit -- to achieve the social goal of increasing worker take-home pay.
It has also been touted as the rare case of bipartisan collaboration. Liberals get more money
for workers. Conservatives get to reward the deserving poor, since the EITC is conditioned on
employment. Conservatives get a further ideological win, since the EITC is effectively a wage
subsidy from the government, but is experienced as a tax refund rather than a benefit of
government.
Recent research, however, shows that the EITC is primarily a subsidy of low-wage employers,
who are able to pay their workers a lot less than a market-clearing wage. In industries such as
nursing homes or warehouses, where many workers qualified for the EITC work side by side with
ones not eligible, the non-EITC workers get substandard wages. The existence of the EITC
depresses the level of the wages that have to come out of the employer's
pocket.
Neoliberalism's Influence on Liberals
As free-market theory resurged, many moderate liberals embraced these policies. In the
inflationary 1970s, regulation became a scapegoat that supposedly deterred salutary price
competition. Some, such as economist Alfred Kahn, President Carter's adviser on deregulation,
supported deregulation on what he saw as the merits. Other moderates supported neoliberal
policies opportunistically, to curry favor with powerful industries and donors. Market-like
policies were also embraced by liberals as a tactical way to find common ground with
conservatives.
Several forms of deregulation -- of airlines, trucking, and electric power -- began not
under Reagan but under Carter. Financial deregulation took off under Bill Clinton. Democratic
presidents, as much as Republicans, promoted trade deals that undermined social standards.
Cost-benefit analysis by the Office of Information and Regulatory Affairs (OIRA) was more of a
choke point under Barack Obama than under George W. Bush.
"Command and control" became an all-purpose pejorative for disparaging perfectly sensible
and efficient regulation. "Market-like" became a fashionable concept, not just on the
free-market right but on the moderate left. Cass Sunstein, who served as Obama's
anti-regulation czar,uses the example of "nudges" as a more market-like and hence superior
alternative to direct regulation, though with rare exceptions their impact is trivial.
Moreover, nudges only work in tandem with regulation.
There are indeed some interventionist policies that use market incentives to serve social
goals. But contrary to free-market theory, the market-like incentives first require substantial
regulation and are not a substitute for it. A good example is the Clean Air Act Amendments of
1990, which used tradable emission rights to cut the output of sulfur dioxide, the cause of
acid rain. This was supported by both the George H.W. Bush administration and by leading
Democrats. But before the trading regime could work, Congress first had to establish
permissible ceilings on sulfur dioxide output -- pure command and control.
There are many other instances, such as nutrition labeling, truth-in-lending, and disclosure
of EPA gas mileage results, where the market-like premise of a better-informed consumer
complements command regulation but is no substitute for it. Nearly all of the increase in fuel
efficiency, for example, is the result of command regulations that require auto fleets to hit a
gas mileage target. The fact that EPA gas mileage figures are prominently disclosed on new car
stickers may have modest influence, but motor fuels are so underpriced that car companies have
success selling gas-guzzlers despite the consumer labeling.
Image removed
Bill Clinton and his Treasury Secretary, Robert Rubin, were big promoters of financial deregulation.
Politically, whatever rationale there was for liberals to make common ground with
libertarians is now largely gone. The authors of the 2017 Tax Cuts and Jobs Act made no attempt
to meet Democrats partway; they excluded the opposition from the legislative process entirely.
This was opportunistic tax cutting for elites, pure and simple. The right today also abandoned
the quest for a middle ground on environmental policy, on anti-poverty policy, on health policy
-- on virtually everything. Neoliberal ideology did its historic job of weakening intellectual
and popular support for the proposition that affirmative government can better the lives of
citizens and that the Democratic Party is a reliable steward of that social compact. Since
Reagan, the right's embrace of the free market has evolved from partly principled idealism into
pure opportunism and obstruction.
Neoliberalism and Hyper-Globalism
The post-1990 rules of globalization, supported by conservatives and moderate liberals
alike, are the quintessence of neoliberalism. At Bretton Woods in 1944, the use of fixed
exchange rates and controls on speculative private capital, plus the creation of the IMFand
World Bank, were intended to allow member countries to practice national forms of managed
capitalism, insulated from the destructive and deflationary influences of short-term
speculative private capital flows. As doctrine and power shifted in the 1970s, the IMF, the
World Bank, and later the WTO, which replaced the old GATT, mutated into their ideological
opposite. Rather than instruments of support for mixed national economies, they became
enforcers of neoliberal policies.
The standard package of the "Washington Consensus" of approved policies for developing
nations included demands that they open their capital markets to speculative private finance,
as well as cutting taxes on capital, weakening social transfers, and gutting labor regulation
and public ownership. But private capital investment in poor countries proved to be fickle. The
result was often excessive inflows during the boom part of the cycle and punitive withdrawals
during the bust -- the opposite of the patient, long-term development capital that these
countries needed and that was provided by the World Bank of an earlier era. During the bust
phase, the IMF typically imposes even more stringent neoliberal demands as the price of
financial bailouts, including perverse budgetary austerity, supposedly to restore the
confidence of the very speculative capital markets responsible for the boom-bust cycle.
Dozens of nations, from Latin America to East Asia, went through this cycle of boom, bust,
and then IMF pile-on. Greece is still suffering the impact. After 1990, hyper-globalism also
included trade treaties whose terms favored multinational corporations. Traditionally, trade
agreements had been mainly about reciprocal reductions of tariffs. Nations were free to have
whatever brand of regulation, public investment, or social policies they chose. With the advent
of the WTO, many policies other than tariffs were branded as trade distorting, even as takings
without compensation. Trade deals were used to give foreign capital free access and to
dismantle national regulation and public ownership. Special courts were created in which
foreign corporations and investors could do end runs around national authorities to challenge
regulation for impeding commerce.
At first, the sponsors of the new trade regime tried to claim the successful economies of
East Asia as evidence of the success of the neoliberal recipe. Supposedly, these nations had
succeeded by pursuing "export-led growth," exposing their domestic economies to salutary
competition. But these claims were soon exposed as the opposite of what had actually occurred.
In fact, Japan, South Korea, smaller Asian nations, and above all China had thrived by
rejecting every major tenet of neoliberalism. Their capital markets were tightly regulated and
insulated from foreign speculative capital. They developed world-class industries as state-led
cartels that favored domestic production and supply. East Asia got into trouble only when it
followed IMF dictates to throw open capital markets, and in the aftermath they recovered by
closing those markets and assembling war chests of hard currency so that they'd never again
have to go begging to the IMF. Enthusiasts of hyper-globalization also claimed that it
benefited poor countries by increasing export opportunities, but as the success of East Asia
shows, there is more than one way to boost exports -- and many poorer countries suffered under
the terms of the global neoliberal regime.
Nor was the damage confined to the developing world. As the work of Harvard economist Dani
Rodrik has demonstrated, democracy requires a polity. For better or for worse, the polity and
democratic citizenship are national. By enhancing the global market at the expense of the
democratic state, the current brand of hyper-globalization deliberately weakens the capacity of
states to regulate markets, and weakens democracy itself.
When Do Markets Work?
The failure of neoliberalism as economic and social policy does not mean that markets never
work. A command economy is even more utopian and perverse than a neoliberal one. The practical
quest is for an efficient and equitable middle ground.
The neoliberal story of how the economy operates assumes a largely frictionless marketplace,
where prices are set by supply and demand, and the price mechanism allocates resources to their
optimal use in the economy as a whole. For this discipline to work as advertised, however,
there can be no market power, competition must be plentiful, sellers and buyers must have
roughly equal information, and there can be no significant externalities. Much of the 20th
century was practical proof that these conditions did not describe a good part of the actual
economy. And if markets priced things wrong, the market system did not aggregate to an
efficient equilibrium, and depressions could become self-deepening. As Keynes demonstrated,
only a massive jolt of government spending could restart the engines, even if market pricing
was partly violated in the process.
Nonetheless, in many sectors of the economy, the process of buying and selling is close
enough to the textbook conditions of perfect competition that the price system works tolerably
well. Supermarkets, for instance, deliver roughly accurate prices because of the consumer's
freedom and knowledge to shop around. Likewise much of retailing. However, when we get into
major realms of the economy with positive or negative externalities, such as education and
health, markets are not sufficient. And in other major realms, such as pharmaceuticals, where
corporations use their political power to rig the terms of patents, the market doesn't produce
a cure.
The basic argument of neoliberalism can fit on a bumper sticker. Markets work;
governments don't . If you want to embellish that story, there are two corollaries: Markets
embody human freedom. And with markets, people basically get what they deserve; to alter market
outcomes is to spoil the poor and punish the productive. That conclusion logically flows from
the premise that markets are efficient. Milton Friedman became rich, famous, and influential by
teasing out the several implications of these simple premises.
It is much harder to articulate the case for a mixed economy than the case for free markets,
precisely because the mixed economy is mixed. The rebuttal takes several paragraphs. The more
complex story holds that markets are substantially efficient in some realms but far from
efficient in others, because of positive and negative externalities, the tendency of financial
markets to create cycles of boom and bust, the intersection of self-interest and corruption,
the asymmetry of information between company and consumer, the asymmetry of power between
corporation and employee, the power of the powerful to rig the rules, and the fact that there
are realms of human life (the right to vote, human liberty, security of one's person) that
should not be marketized.
And if markets are not perfectly efficient, then distributive questions are partly political
choices. Some societies pay pre-K teachers the minimum wage as glorified babysitters. Others
educate and compensate them as professionals. There is no "correct" market-derived wage,
because pre-kindergarten is a social good and the issue of how to train and compensate teachers
is a social choice, not a market choice. The same is true of the other human services,
including medicine. Nor is there a theoretically correct set of rules for patents, trademarks,
and copyrights. These are politically derived, either balancing the interests of innovation
with those of diffusion -- or being politically captured by incumbent industries.
Governments can in principle improve on market outcomes via regulation, but that fact is
complicated by the risk of regulatory capture. So another issue that arises is market failure
versus polity failure, which brings us back to the urgency of strong democracy and effective
government.
After Neoliberalism
The political reversal of neoliberalism can only come through practical politics and
policies that demonstrate how government often can serve citizens more equitably and
efficiently than markets. Revision of theory will take care of itself. There is no shortage of
dissenting theorists and empirical policy researchers whose scholarly work has been vindicated
by events. What they need is not more theory but more influence, both in the academy and in the
corridors of power. They are available to advise a new progressive administration, if
that administration can get elected and if it refrains from hiring neoliberal
advisers.
There are also some relatively new areas that invite policy innovation. These include
regulation of privacy rights versus entrepreneurial liberties in the digital realm; how to
think of the internet as a common carrier; how to update competition and antitrust policy as
platform monopolies exert new forms of market power; how to modernize labor-market policy in
the era of the gig economy; and the role of deeper income supplements as machines replace human
workers.
The failed neoliberal experiment also makes the case not just for better-regulated
capitalism but for direct public alternatives as well. Banking, done properly, especially the
provision of mortgage finance, is close to a public utility. Much of it could be public. A
great deal of research is done more honestly and more cost-effectively in public, peer-reviewed
institutions such as the NIH than by a substantially corrupt private pharmaceutical industry.
Social housing often is more cost-effective than so-called public-private partnerships. Public
power is more efficient to generate, less prone to monopolistic price-gouging, and friendlier
to the needed green transition than private power. The public option in health care is far more
efficient than the current crazy quilt in which each layer of complexity adds opacity and cost.
Public provision does require public oversight, but that is more straightforward and
transparent than the byzantine dance of regulation and counter-regulation.
The two other benefits of direct public provision are that the public gets direct evidence
of government delivering something of value, and that the countervailing power of democracy to
harness markets is enhanced. A mixed economy depends above all on a strong democracy -- one
even stronger than the democracy that succumbed to the corrupting influence of economic elites
and their neoliberal intellectual allies beginning half a century ago. The antidote to the
resurrected neoliberal fable is the resurrection of democracy -- strong enough to tame the
market in a way that tames it for keeps.
Robert Kuttner is co-founder and co-editor of The American Prospect, and professor at
Brandeis University's Heller School. His latest book is The Stakes: 2020 and the Survival of American
Democracy . In addition to writing for the Prospect, he writes for HuffPost, The Boston
Globe, and The New York Review of Books.
"... A series of recent polls in the US and Europe have shown a sharp growth of popular disgust with capitalism and support for socialism. In May of 2017, in a survey conducted by the Union of European Broadcasters of people aged 18 to 35, more than half said they would participate in a "large-scale uprising." Nine out of 10 agreed with the statement, "Banks and money rule the world." ..."
"... In August of this year, a Gallup poll found that for the first time since the organization began tracking the figure, fewer than half of Americans aged 18–29 had a positive view of capitalism, while more than half had a positive view of socialism. The percentage of young people viewing capitalism positively fell from 68 percent in 2010 to 45 percent this year, a 23-percentage point drop in just eight years. ..."
Last month, the Council of Economic Advisers, an agency of the Trump White House, released an extraordinary report titled "The
Opportunity Costs of Socialism." The report begins with the statement: "Coincident with the 200th anniversary of Karl Marx's birth,
socialism is making a comeback in American political discourse. Detailed policy proposals from self-declared socialists are gaining
support in Congress and among much of the younger electorate."
The very fact that the US government officially acknowledges a growth of popular support for socialism, particularly among the
nation's youth, testifies to vast changes taking place in the political consciousness of the working class and the terror this is
striking within the ruling elite. America is, after all, a country where anti-communism was for the greater part of a century a state-sponsored
secular religion. No ruling class has so ruthlessly sought to exclude socialist politics from political discourse as the American
ruling class.
The 70-page document is itself an inane right-wing screed. It seeks to discredit socialism by identifying it with capitalist countries
such as Venezuela that have expanded state ownership of parts of the economy while protecting private ownership of the banks, and,
with the post-2008 collapse of oil and other commodity prices, increasingly attacked the living standards of the working class.
It identifies socialism with proposals for mild social reform such as "Medicare for all," raised and increasingly abandoned by
a section of the Democratic Party. It cites Milton Friedman and Margaret Thatcher to promote the virtues of "economic freedom," i.e.,
the unrestrained operation of the capitalist market, and to denounce all social reforms, business regulations, tax increases or anything
else that impinges on the oligarchy's self-enrichment.
The report's arguments and themes find expression in the fascistic campaign speeches of Donald Trump, who routinely and absurdly
attacks the Democrats as socialists and accuses them of seeking to turn America into another "socialist" Venezuela.
What has prompted this effort to blackguard socialism?
A series of recent polls in the US and Europe have shown a sharp growth of popular disgust with capitalism and support for socialism.
In May of 2017, in a survey conducted by the Union of European Broadcasters of people aged 18 to 35, more than half said they would
participate in a "large-scale uprising." Nine out of 10 agreed with the statement, "Banks and money rule the world."
Last November, a poll conducted by YouGov showed that 51 percent of Americans between the ages of 21 and 29 would prefer to live
in a socialist or communist country than in a capitalist country.
In August of this year, a Gallup poll found that for the first time since the organization began tracking the figure, fewer than
half of Americans aged 18–29 had a positive view of capitalism, while more than half had a positive view of socialism. The percentage
of young people viewing capitalism positively fell from 68 percent in 2010 to 45 percent this year, a 23-percentage point drop in
just eight years.
This surge in interest in socialism is bound up with a resurgence of class struggle in the US and internationally. In the United
States, the number of major strikes so far this year, 21, is triple the number in 2017. The ruling class was particularly terrified
by the teachers' walkouts earlier this year because the biggest strikes were organized by rank-and-file educators in a rebellion
against the unions, reflecting the weakening grip of the pro-corporate organizations that have suppressed the class struggle for
decades.
The growth of the class struggle is an objective process that is driven by the global crisis of capitalism, which finds its most
acute social and political expression in the center of world capitalism -- the United States. It is the class struggle that provides
the key to the fight for genuine socialism.
Masses of workers and youth are being driven into struggle and politically radicalized by decades of uninterrupted war and the
staggering growth of social inequality. This process has accelerated during the 10 years since the Wall Street crash of 2008. The
Obama years saw the greatest transfer of wealth from the bottom to the top in history, the escalation of the wars begun under Bush
and their spread to Libya, Syria and Yemen, and the intensification of mass surveillance, attacks on immigrants and other police
state measures.
This paved the way for the elevation of Trump, the personification of the criminality and backwardness of the ruling oligarchy.
Under conditions where the typical CEO in the US now makes in a single day almost as much as the average worker makes in an entire
year, and the net worth of the 400 wealthiest Americans has doubled over the past decade, the working class is looking for a radical
alternative to the status quo. As the Socialist Equality Party wrote in its program eight years ago, "
The Breakdown of Capitalism and the Fight for Socialism
in the United States ":
The change in objective conditions, however, will lead American workers to change their minds. The reality of capitalism will
provide workers with many reasons to fight for a fundamental and revolutionary change in the economic organization of society.
The response of the ruling class is two-fold. First, the abandonment of bourgeois democratic forms of rule and the turn toward
dictatorship. The run-up to the midterm elections has revealed the advanced stage of these preparations, with Trump's fascistic attacks
on immigrants, deployment of troops to the border, threats to gun down unarmed men, women and children seeking asylum, and his pledge
to overturn the 14th Amendment establishing birthright citizenship.
That this has evoked no serious opposition from the Democrats and the media makes clear that the entire ruling class is united
around a turn to authoritarianism. Indeed, the Democrats are spearheading the drive to censor the internet in order to silence left-wing
and socialist opposition.
The second response is to promote phony socialists such as Bernie Sanders, the Democratic Socialists of America (DSA) and other
pseudo-left organizations in order to confuse the working class and channel its opposition back behind the Democratic Party.
In 2018, with Sanders totally integrated into the Democratic Party leadership, this role has been largely delegated to the DSA,
which functions as an arm of the Democrats. Two DSA members, Alexandria Ocasio-Cortez in New York and Rashida Tlaib in Detroit, are
likely to win seats in the House of Representatives as candidates of the Democratic Party.
The closer they come to taking office, the more they seek to distance themselves from their supposed socialist affiliation. Ocasio-Cortez,
for example, joined Sanders in eulogizing the recently deceased war-monger John McCain, refused to answer when asked if she opposed
the US wars in the Middle East, and dropped her campaign call for the abolition of Immigration and Customs Enforcement (ICE).
"... As for the USSR, the Soviet elite changed sides. I think Putin once said that Soviet system was "unviable" to begin with. And that's pretty precise diagnosis: as soon as the theocratic elite degenerates, it defects; and the state and the majority of the population eventually fall on their own sword. ..."
"... And the USSR clearly was a variation of a theocratic state. That explain also a very high, damaging the economy, level of centralization (the country as a single corporation) and the high level of ideology/religion-based repression (compare with Iran and Islamic state jihadists.) ..."
"... So after the WWII the ideology of Bolshevism was dead as it became clear that Soviet style theocratic state is unable to produce standard of living which Western social democracies were able to produce for their citizens. Rapid degeneration of the theocratic Bolshevik elite (aka Nomenklatura) also played an important role. ..."
"... It is important to understand that the Soviet elite changed sides completely voluntarily. Paradoxically it was high level of KGB functionaries who were instrumental in conversion to neoliberalism, starting with Andropov. It was Andropov, who created the plan of transition of the USSR to neoliberalism, the plan that Gorbachov tried to implement and miserably failed. ..."
"... So the system exploded from within because the Party elite became infected with neoliberalism (which was stupid, but reflects the level of degeneration of the Soviet elite). ..."
"... The major USA contribution other then supplying the new ideology for the Soviet elite was via CIA injecting God know how much money to bribe top officials. ..."
"... As Gorbachov was a second rate (if not the third rate) politician, he allowed the situation to run out of control. And the efforts to "rock" the system were fueled internally by emerging (as the result of Perestroika; which was a reincarnation of Lenin's idea of NEP) class of neoliberal Nouveau riche (which run the USSR "shadow economy" which emerged under Brezhnev) and by nationalist sentiments (those element were clearly supported by the USA and other Western countries money as well as via subversive efforts of national diaspora residing in the USA and Canada) and certain national minorities within the USSR. ..."
"... The brutal economic rape of the xUSSR space and generally of the whole former Soviet block by the "collective neoliberal West" naturally followed. Which had shown everybody that the vanguard of Perestroika were simply filthy compradors, who can't care less about regular citizens and their sufferings. ..."
"... BTW this huge amount of loot postponed the internal crisis of neoliberalism which happened in the USA in 2008 probably by ten years. And it (along with a couple of other factors such as telecommunication revolution) explain relative prosperity of Clinton presidency. Criminal Clinton presidency I should say. ..."
"... BTW few republics in former USSR space managed to achieve the standard of living equal to the best years of the USSR (early 80th I think) See https://web.williams.edu/Economics/brainerd/papers/ussr_july08.pdf ..."
"... Generally when the particular ideology collapses, far right nationalism fills the void. We see this now with the slow collapse of neoliberalism in the USA and Western Europe. ..."
"... Chinese learned a lot from Gorbachov's fatal mistakes and have better economic results as the result of the conversion to the neoliberalism ("from the above"), although at the end Chinese elite is not that different from Soviet elite and also is corruptible and can eventually change sides. ..."
"... But they managed to survive the "triumphal march of neoliberalism" (1980-2000) and now the danger is less as neoliberalism is clearly the good with expired "use by" date: after 2008 the neoliberal ideology was completely discredited and entered "zombie" state. ..."
This is a very complex issue. And I do not pretend that I am right, but I think Brad is way too superficial to be taken seriously.
IMHO it was neoliberalism that won the cold war. That means that the key neoliberal "scholars" like Friedman and Hayek and
other intellectual prostitutes of financial oligarchy who helped to restore their power. Certain democratic politicians like Carter
also were the major figures. Carter actually started neoliberalization of the USA, continued by Reagan,
Former Trotskyites starting from Burnham which later became known as neoconservatives also deserve to be mentioned.
It is also questionable that the USA explicitly won the cold war. Paradoxically the other victim of the global neoliberal revolution
was the USA, the lower 90% of the USA population to be exact.
So there was no winners other the financial oligarchy (the transnational class.)
As for the USSR, the Soviet elite changed sides. I think Putin once said that Soviet system was "unviable" to begin with.
And that's pretty precise diagnosis: as soon as the theocratic elite degenerates, it defects; and the state and the majority of
the population eventually fall on their own sword.
And the USSR clearly was a variation of a theocratic state. That explain also a very high, damaging the economy, level
of centralization (the country as a single corporation) and the high level of ideology/religion-based repression (compare with
Iran and Islamic state jihadists.)
The degeneration started with the death of the last charismatic leader (Stalin) and the passing of the generation which remembers
that actual warts of capitalism and could relate them to the "Soviet socialism" solutions.
So after the WWII the ideology of Bolshevism was dead as it became clear that Soviet style theocratic state is unable to
produce standard of living which Western social democracies were able to produce for their citizens. Rapid degeneration of the
theocratic Bolshevik elite (aka Nomenklatura) also played an important role.
With bolshevism as the official religion, which can't be questioned, the society was way too rigid and suppressed "entrepreneurial
initiative" (which leads to enrichment of particular individuals, but also to the benefits to the society as whole), to the extent
that was counterproductive. The level of dogmatism in this area was probably as close to the medieval position of Roman Catholic
Church as we can get; in this sense it was only national that Cardinal Karol Wojtyla became a pope John Paul II -- he was very
well prepared indeed ;-).
It is important to understand that the Soviet elite changed sides completely voluntarily. Paradoxically it was high level
of KGB functionaries who were instrumental in conversion to neoliberalism, starting with Andropov. It was Andropov, who created
the plan of transition of the USSR to neoliberalism, the plan that Gorbachov tried to implement and miserably failed.
So the system exploded from within because the Party elite became infected with neoliberalism (which was stupid, but reflects
the level of degeneration of the Soviet elite).
The major USA contribution other then supplying the new ideology for the Soviet elite was via CIA injecting God know how
much money to bribe top officials.
As Gorbachov was a second rate (if not the third rate) politician, he allowed the situation to run out of control. And
the efforts to "rock" the system were fueled internally by emerging (as the result of Perestroika; which was a reincarnation of
Lenin's idea of NEP) class of neoliberal Nouveau riche (which run the USSR "shadow economy" which emerged under Brezhnev) and
by nationalist sentiments (those element were clearly supported by the USA and other Western countries money as well as via subversive
efforts of national diaspora residing in the USA and Canada) and certain national minorities within the USSR.
Explosion of far right nationalist sentiments without "Countervailing ideology" as Bolshevism was not taken seriously anymore
was the key factor that led to the dissolution of the USSR.
Essentially national movements allied with Germany that were defeated during WWII became the winners.
The brutal economic rape of the xUSSR space and generally of the whole former Soviet block by the "collective neoliberal
West" naturally followed. Which had shown everybody that the vanguard of Perestroika were simply filthy compradors, who can't
care less about regular citizens and their sufferings.
And the backlash created conditions for Putin coming to power.
BTW this huge amount of loot postponed the internal crisis of neoliberalism which happened in the USA in 2008 probably
by ten years. And it (along with a couple of other factors such as telecommunication revolution) explain relative prosperity of
Clinton presidency. Criminal Clinton presidency I should say.
The majority of the xUSSR space countries have now dismal standard of living and slided into Latin American level of inequality
and corruption (not without help of the USA).
Several have civil wars in the period since getting independence, which further depressed the standard living. Most deindustrialize.
Generally when the particular ideology collapses, far right nationalism fills the void. We see this now with the slow collapse
of neoliberalism in the USA and Western Europe.
Chinese learned a lot from Gorbachov's fatal mistakes and have better economic results as the result of the conversion
to the neoliberalism ("from the above"), although at the end Chinese elite is not that different from Soviet elite and also is
corruptible and can eventually change sides.
But they managed to survive the "triumphal march of neoliberalism" (1980-2000) and now the danger is less as neoliberalism
is clearly the good with expired "use by" date: after 2008 the neoliberal ideology was completely discredited and entered "zombie"
state.
So in the worst case it is the USA which might follow the path of the USSR and eventually disintegrate under the pressure of
internal nationalist sentiments. Such a victor...
Even now there are some visible difference between former Confederacy states and other states on the issues such as immigration
and federal redistributive programs.
"... I'm a little surprised by how many people tell me they have no hobbies. It may seem a small thing, but -- at the risk of sounding grandiose -- I see it as a sign of a civilization in decline. The idea of leisure, after all, is a hard-won achievement; it presupposes that we have overcome the exigencies of brute survival. Yet here in the United States, the wealthiest country in history, we seem to have forgotten the importance of doing things solely because we enjoy them. ..."
"... But there's a deeper reason, I've come to think, that so many people don't have hobbies: We're afraid of being bad at them. Or rather, we are intimidated by the expectation -- itself a hallmark of our intensely public, performative age -- that we must actually be skilled at what we do in our free time. Our "hobbies," if that's even the word for them anymore, have become too serious, too demanding, too much an occasion to become anxious about whether you are really the person you claim to be. ..."
"... If you're a jogger, it is no longer enough to cruise around the block; you're training for the next marathon. If you're a painter, you are no longer passing a pleasant afternoon, just you, your watercolors and your water lilies; you are trying to land a gallery show or at least garner a respectable social media following. When your identity is linked to your hobby -- you're a yogi, a surfer, a rock climber -- you'd better be good at it, or else who are you? ..."
"... Lost here is the gentle pursuit of a modest competence, the doing of something just because you enjoy it, not because you are good at it. Hobbies, let me remind you, are supposed to be something different from work. But alien values like "the pursuit of excellence" have crept into and corrupted what was once the realm of leisure, leaving little room for the true amateur. The population of our country now seems divided between the semipro hobbyists (some as devoted as Olympic athletes) and those who retreat into the passive, screeny leisure that is the signature of our technological moment. ..."
"... Liberty and equality are supposed to make possible the pursuit of happiness. It would be unfortunate if we were to protect the means only to neglect the end. ..."
"... Lest this sound suspiciously like an elaborate plea for people to take more time off from work -- well, yes. Though I'd like to put the suggestion more grandly: The promise of our civilization, the point of all our labor and technological progress, is to free us from the struggle for survival and to make room for higher pursuits. ..."
I'm a little surprised by how many people tell me they have no hobbies. It may seem a small thing, but -- at the risk of sounding
grandiose -- I see it as a sign of a civilization in decline. The idea of leisure, after all, is a hard-won achievement; it presupposes
that we have overcome the exigencies of brute survival. Yet here in the United States, the wealthiest country in history, we seem
to have forgotten the importance of doing things solely because we enjoy them.
Yes, I know: We are all so very busy. Between work and family and social obligations, where are we supposed to find the time?
But there's a deeper reason, I've come to think, that so many people don't have hobbies: We're afraid of being bad at them.
Or rather, we are intimidated by the expectation -- itself a hallmark of our intensely public, performative age -- that we must actually
be skilled at what we do in our free time. Our "hobbies," if that's even the word for them anymore, have become too serious, too
demanding, too much an occasion to become anxious about whether you are really the person you claim to be.
If you're a jogger, it is no longer enough to cruise around the block; you're training for the next marathon. If you're a
painter, you are no longer passing a pleasant afternoon, just you, your watercolors and your water lilies; you are trying to land
a gallery show or at least garner a respectable social media following. When your identity is linked to your hobby -- you're a yogi,
a surfer, a rock climber -- you'd better be good at it, or else who are you?
Lost here is the gentle pursuit of a modest competence, the doing of something just because you enjoy it, not because you
are good at it. Hobbies, let me remind you, are supposed to be something different from work. But alien values like "the pursuit
of excellence" have crept into and corrupted what was once the realm of leisure, leaving little room for the true amateur. The population
of our country now seems divided between the semipro hobbyists (some as devoted as Olympic athletes) and those who retreat into the
passive, screeny leisure that is the signature of our technological moment.
I don't deny that you can derive a lot of meaning from pursuing an activity at the highest level. I would never begrudge someone
a lifetime devotion to a passion or an inborn talent. There are depths of experience that come with mastery. But there is also a
real and pure joy, a sweet, childlike delight, that comes from just learning and trying to get better. Looking back, you will find
that the best years of, say, scuba-diving or doing carpentry were those you spent on the learning curve, when there was exaltation
in the mere act of doing.
In a way that we rarely appreciate, the demands of excellence are at war with what we call freedom. For to permit yourself to
do only that which you are good at is to be trapped in a cage whose bars are not steel but self-judgment. Especially when it comes
to physical pursuits, but also with many other endeavors, most of us will be truly excellent only at whatever we started doing in
our teens. What if you decide in your 40s, as I have, that you want to learn to surf? What if you decide in your 60s that you want
to learn to speak Italian? The expectation of excellence can be stultifying.
Liberty and equality are supposed to make possible the pursuit of happiness. It would be unfortunate if we were to protect the
means only to neglect the end. A democracy, when it is working correctly, allows men and women to develop into free people; but it
falls to us as individuals to use that opportunity to find purpose, joy and contentment.
Lest this sound suspiciously like an elaborate plea for people to take more time off from work -- well, yes. Though I'd like to
put the suggestion more grandly: The promise of our civilization, the point of all our labor and technological progress, is to free
us from the struggle for survival and to make room for higher pursuits. But demanding excellence in all that we do can undermine
that; it can threaten and even destroy freedom. It steals from us one of life's greatest rewards -- the simple pleasure of doing
something you merely, but truly, enjoy.
Tim Wu ( @superwuster ) is a law professor at Columbia, the author
of "The Attention Merchants: The Epic Struggle to Get Inside Our Heads" and a contributing opinion writer. A version of this article
appears in print on Sept. 30, 2018 , on Page SR 6 of the New York edition with the headline: In Praise of Mediocrity.
"... Never rely on corporate spending for a recovery. Negative interest rates are precisely an attempt to trigger corporate spending ..."
"... It is similar to the period of stagnation the USSR experienced in starting with 70th till its dissolution. The causes are systemic, stemming from a perverted way neoliberalism organizes the society ("Greed is good" "free market", "I am from the government... " "Individual responsibility", shareholder values and other pseudo-religious symbols of faith ) as well as hypertrophy, lack of control and the level of political power of the financial sector under neoliberalism. ..."
"... Neoliberalism, like Bolshevism before it is a Catch 22 and can't be reformed only abolished. In any case due to deregulation of the financial sector and decimation of New Deal safeguards (thanks to Clinton) the US society stepped on the same rake as before Great Depression. ..."
"confess that I am a profound skeptic about deep negative nominal interest rates. A
slightly higher inflation target and policies to fight the asset price configuration called
"secular stagnation" would largely obviate the need, and leave behind a problem easily and
straightforwardly dealt with via expansionary fiscal policy.
And we really do not know how such an institutional reconfiguration would actually
work.
Confronted with a choice between known and understood policies that would work, and new
ones with unknown side effects and effects that might, I do not understand the enthusiasm
for the second:"
Since kalecki progressives have been warned. Never rely on corporate spending for a recovery. Negative interest rates are precisely an attempt to trigger corporate spending
Forget about it. The government needs to borrow at zero real YES no need to go negative
real. And either spend on real outputs or transfer to high marginal spenders ie credit
constrained households. Btw trying to unconstrain household credit. Or reduce its cost ie
rate reduction. Only restores a new higher debt ration equally subject to sudden stop credit
flows in a system conducted by capitalists and for capitalists
Policies to fight
" asset price configuration "
Answer uncle's safe rate set to zero real. That neutralizes the real burden of federal debt. Now output price trends. May
require a coordinating mechanism imposed on corporate pricing decisions
Firms need autonomy
to regulate their relative prices,
not coincidentally determine absolute price levels.
As firms do now in our output pricing
free for all
Where system wide price changes on over all price level movements are not internalized
Brad is pushing a change in macro management policy. To fiscal mobilization of social production level. And the FED manage
the social burden
of federal debt. Since the triumph of monetary first policy
In 1979 on output level and employment
management fiscal activism has become a robin to the feds Batman
No more sez our dear .Brad
"secular stagnation" is the result of systemic crisis of neoliberalism which started in 2008.
Larry Summers:
"Secular Stagnation – a prolonged period in which satisfactory growth can only be
achieved by unsustainable financial conditions –- may be the defining macro-economic
challenge of our times. "
It is similar to the period of stagnation the USSR experienced in starting with 70th till
its dissolution. The causes are systemic, stemming from a perverted way neoliberalism organizes the society
("Greed is good" "free market", "I am from the government... " "Individual responsibility",
shareholder values and other pseudo-religious symbols of faith ) as well as hypertrophy, lack
of control and the level of political power of the financial sector under neoliberalism.
Neoliberalism, like Bolshevism before it is a Catch 22 and can't be reformed only
abolished. In any case due to deregulation of the financial sector and decimation of New Deal
safeguards (thanks to Clinton) the US society stepped on the same rake as before Great
Depression.
As Galbraith aptly said "The man who is admired for the ingenuity of his larceny is almost
always rediscovering some earlier form of fraud. The basic forms are all known, have all been
practiced."
Are the faults of capitalism curable, or are they instead symptoms of a chronic disease?
This is the question posed by Martin Wolf:
What we increasingly seem to have is an unstable rentier capitalism, weakened competition,
feeble productivity growth, high inequality and, not coincidentally, an increasingly degraded
democracy.
There is much to admire in this piece. But I fear it understates the problem with
capitalism.
The Bank of England has given us a big clue here. It points out that the rising profit
share (a strong sign of increased monopoly) is largely confined to the US. In the UK, the
share of profits in GDP has flatlined in recent years. Few, however, would argue that UK
capitalism is less dysfunctional than its US counterpart. Which suggests that the problem
with capitalism is not increased monopoly.
[Graph]
So what is it? Here, I commend some brilliant work by Michael Roberts. Many of the faults
Martin discusses have their origin in a declining rate of profit – a decline which
became acute in the 1970s but which was never wholly reversed.
The causes of this decline are many and debated: an over-accumulation of capital in the
1960s and again in the tech bubble; increased worker militancy in the 60s and 70s; greater
competition both from overseas and internally (see for example William Nordhaus's work); a
slower rate of innovation in many sectors; an inability of shareholder-owned firms to exploit
potential profit opportunities; weak aggregate demand; and so on.
Granted, actually measuring the rate of profit is fraught with difficulty, due to myriad
problems in measuring the capital stock. But the fact that capital spending has been weak for
many years (before Brexit) suggests that incentives to invest are weak – one plausible
reason for which is low profitability.
The financial crisis was a symptom of this. Imagine there had been an abundance of
profitable investment projects in the real economy in the early 00s. The savings glut and
fall in bond yields would then have financed these so we'd have seen a boom in investment,
jobs and incomes. But there was no such abundance, so the savings glut instead financed a
bubble in housing and credit derivatives which ended in crisis.
Many of the things social democrats like Martin deplore about capitalism are in fact
responses since the late 70s to this crisis of profitability. The assertion of management
power – a symptom of which is high CEO salaries – is a (successful) suppression
of worker militancy. Privatizations are an attempt to expand the realm in which capitalists
can make profits. Financialization is the result of a shift away from low-profit activities
in the real economy. And rent-seeking and cronyism reflect attempts to sustain profits in the
face of competition and crisis.
Stagnant productivity tells us that these measures have not wholly worked, in part perhaps
because the same inequality * they have generated tends to depress productivity growth.
If all this is true, or roughly so, then the problems Martin describes are not so easily
cured. When Martin says that "fixing this is a challenge for us all" he is understating the
case.
But is it true? The way to find out is to see if attempts to reform capitalism actually
succeed. Mirabile dictu, there are even some proposals here that do not come from the left.
Sadly, though, one effect of capitalism's crisis has been, as Martin says, to so degrade
democracy as to take intelligent economic policy off the agenda.
* Yes, UK inequality stopped rising a few years ago. But the damage it does is still with
us. If a man has been hit by a bus, you do not restore him to health merely by stopping the
bus.
People look for reasons to get offended when they don't get the things they want. It's a
defensive reaction against the feeling of powerlessness, of events not going according to plan
because of outside forces you can't control. Instead of accepting your lack of control in a
given situation, you attribute malice to some actor or other, so now it's no longer a case of
you at the mercy of the world, it's a case of some other agent causing you grief -- it becomes
personal. By attributing malice to, say, someone else's incompetence, you turn your
powerlessness into battle. This appeases the ego because there is now the idea of somebody
caring about what you want, of somebody reacting to your wishes, albeit negatively, rather than
ignoring you altogether.
>>
Instead of trying to find an outlet for your anger, prevent it in the first place by
destroying its fuel. Instead of assuming that things have got to go your way, assume that they
will only probably go your way if you've made the right preparations, and if they don't, see if
it was a lack of action on your part or simply a case of outside forces that you couldn't
control, whether accounted for or not. If it's the former, learn from it, if the latter, be
content knowing that you've done all that was in your power. The feeling of powerlessness comes
from feeling the constraints of the world around you, but instead of seeing them as enemy
forces that try to fight you to prevent your movement, see them as terrain you have to move
around to get to where you want to be.
>>
To live under constraint is a misfortune, but there is no constraint to live under
constraint.
A monopoly is a bad thing. It invites
abuse of the power it controls. Sometimes it is not the worst thing that could happen. Anarchy
or the 'state of nature', can be worse. I don't know whether Thomas Hobbes was right for all
time and places in asserting that man is not by nature a social animal and that society could
not exist except by the power of the state - the wielder of the monopoly of legitimate coercive
power.
There may have been some bucolic, idyllic communities that dispensed with the institution of
the state, where the fundamental rights of people ( life, health, liberty) and property
rights could be enforced effectively by individual action or through acts of spontaneous
cooperation without external, third-party enforcement. But once we get to communities exceeding
a dozen or at most a gross of people, an institution endowed with the monopoly on the
legitimate use of force against its own citizens appears to have evolved, to have been created
or to have been imposed everywhere.
>>
From Chapter 13 of The Leviathan, Thomas Hobbes's rhetoric in making the case for the state
in human affairs, is magnificent :
"Whatsoever therefore is consequent to a time of war, where every man is enemy to every
man, the same consequent to the time wherein men live without other security than what their
own strength and their own invention shall furnish them withal.
In such condition there is no place for industry, because the fruit thereof is
uncertain: and consequently no culture of the earth; no navigation, nor use of the
commodities that may be imported by sea; no commodious building; no instruments of moving and
removing such things as require much force; no knowledge of the face of the earth; no account
of time; no arts; no letters; no society; and which is worst of all, continual fear, and
danger of violent death; and the life of man, solitary, poor, nasty, brutish, and short.
"
>>
As positive descriptions, that is, characterizations of what is likely to happen without a
minimally effective state, rather than of what ought to happen, I much prefer Hobbes to
Locke. However, as a normative characterization of what ought to be in the state of nature,
and of how the institution of government and the state can be made to serve the interests and
rights of man, I'm with Locke.
According to Locke, "The state of Nature has a law of Nature to govern it" , and
that law is Reason. Reason teaches that "no one ought to harm another in his life, health,
liberty or possessions". When attempts by individuals to prevent or punish transgressions
of natural law are ineffective, a limited and restricted role for government emerges
"naturally".
>
Locke's view of the state of nature is in part motivated from his Christian belief: the
reason we may not harm another human being is that we are all God's children, and therefore
the possessions of God. We do not own ourselves.
>>
The fact that we grant the state (and the government in charge of the instruments of the
state) a normative raison d'être and acknowledge the universality of its presence in
every historical organized human society, does not mean we should respect, let alone trust
the state.
The state is a necessary evil. It is necessary for the reasons outlined by Hobbes,
Locke and many other worldly philosophers. It is evil because I know of no example of
a state that has not abused its power over its citizens. Nor do I know of a society where the
state does not try to extend its control over the lives of the citizens to domains that are
none of its business and that are not material to the performance of the key tasks of the
state. Every action, legislative initiative, executive order, legal ruling or administrative
decision must therefore be scrutinized with the eyes of a hawk and with a deep and abiding
mistrust of both the motivations and the likely consequences of any state action or
initiative.
The simple rule of thumb as regards both new and existing laws, rules and
regulations should be: when in doubt, throw it out.
>>
Every restriction on our liberties - our right to speak, write, criticize and offend as we
please, to act and organize in opposition to the government of the day, to embarrass it and
to show it up by forcing it to look into the mirror of its own leaked secrets - must be
resisted. We cannot afford to believe any government's protestations that it is acting in
good faith and will safeguard the confidentiality of any information it extracts from us.
Public safety and national security are never sufficient reasons for restricting
the freedom of the citizens. The primary duty of the state is to safeguard our freedom
against internal and external threats. The primary duty of an informed citizenry is to limit
the domain of the state - to keep the government under control and to prevent it from
becoming a threat to our liberties.
>
The threat posed by our own government to our liberty and fundamental rights is a constant
one. Most of the time it is a much greater, direct and immediate threat than that posed by
foreign states (through conquest or extortion) or by external non-government agents, the
violent NGOs like Al Qaeda.
>
In a limited number of countries a fair degree of personal and political freedom has been
achieved during the past three or four centuries. I have been fortunate to always have been a
resident in this blessed corner of the universe - in the Netherlands, Luxembourg, Belgium,
the United Kingdom and the United States. I have, however, visited many countries where these
freedoms never took hold or took hold but briefly and have been whittled away
again.
>>
I have become convinced that the price of freedom is eternal vigilance against the
encroachment by the powers of the state on the private domain. The better-intentioned a
government professes to be, and the better-intentioned it truly is when it first gains
office, the more it is to be distrusted.
After even the most liberal-minded, open-government-committed party takes hold of the
reins of government, it takes never more than a single term of office, four years -
five at the most - before paranoia takes over. Disagreement becomes dissent, dissent becomes
disloyalty, disloyalty becomes betrayal and betrayal becomes treason.
The public interest merges seamlessly with the private interest of the incumbents. The
state bureaucracy, where it has not been taken over by government loyalists on day one of the
new administration, is gradually transformed into an arm of the government. Some formal
checks and balances often remain, parliament and the courts among them, but they too are
often feeble to begin with and weaken further as the term office of the incumbent government
lengthens.
>
I have watched this process at work in the UK since I returned here in 1994. It was
breath-taking and depressing to observe the transformation of New Labour after 1997, from the
party of open government, human rights and civil liberties into an increasingly paranoid
group of power-hogging and repressive political control freaks, who have done more damage to
fundamental human rights in the past 11 years than any other (sequence of) government(s) in
any comparable-length stretch of time since the Glorious Revolution.
>>
Fortunately, despite their worst intentions, they have not been very competent - a more
competent government could have done much more damage to our freedom and civil liberties.
The price of freedom may be a weaker and less efficient state than a conventional
utilitarian cost-benefit analysis would dictate. That is not surprising, as utilitarianism
leads to paternalism (possibly with a detour via libertarian paternalism - the latest
political oxymoron), and paternalism leads to authoritarianism and ultimately to
totalitarianism as surely as the statement: " I'm from the government and I am here to
help you" , will before long be followed by "and I know what is good for you, and for
society at large - so up against the wall, you ." .
>
It is not possible, I believe, to have 'strong but limited' government or 'efficient and
effective but restricted, bounded and confined' government. The reason is that the same
capabilities that make a government (as the manager of the state) strong, efficient and
effective in the the pursuit of set tasks and objectives, will also drive that government to
increase the scale and scope of its ambitions and the degree of control it exercises over
every aspect of our lives.
>
The historical-institutional processes that drive the evolution of the state are quite
likely to result in an all-absorbing Leviathan. This is because the main actors competing for
the control of the government and thus of the apparatus of the state are recruited by
political processes that select for people with a hunger for power, ruthlessness, a belief
that the ends justify the means and an unquestioned faith that the common good (as seen by
the aspiring politico) always takes precedence over individual rights and liberties. We have
to hobble this would-be Leviathan if we value what is left of our rights and
liberties.
>
In the UK, restoring the power of parliament, badly eroded by the demise of the House of
Lords as a serious upper chamber, would be a step towards restoring checks and balances,
especially if the new upper chamber could be elected by proportional representation.
>
Cleaning up the incomprehensible structure of the UK judiciary, with some members of the
judiciary cropping up in parliament and others in the executive, is also long overdue. A
written, modern Bill of Rights would also help to redress the balance of power between the
overweening executive and the rest - the timid, gutless and toothless parliament, the
emasculated judiciary and the disenfranchised electorate.
>
But I doubt whether any of this will be enough to safeguard our freedom. Fortunately we
have one firm ally: government incompetence and ignorance.
>>
So whenever I come across yet another egregious example of government inefficiency (be it
waiting since 1989 for work on Cross Rail to start, another laptop with confidential
information left on the train, interminable blockages of major access roads by
non-synchronized excavations arranged by the electric power company, the gas company, the
phone company, the cable TV company and the maintainer of the Greater London drains, or
unsuccessful attempts to have a broken water mains repaired during a period when an Official
Drought Order was in effect) I feel strangely uplifted. A government and a state apparatus
that cannot punch their way out of a wet paper bag when it comes to so many important and
useful things may not be able to mount much of a threat to our freedom and civil liberties
after all.
The price of freedom is government inefficiency. An ignorant and uninformed state is
the corner stone of liberty. Constitutional reform designed to limit the competence
of the government and the quantity and quality of the information it has at its disposal
should figure prominently in the next Queen's Speech.
[ ] Buiter absolutely nails what New Labour have become. It's the perfect summation of
everything that's happened since 1997 in two paragraphs. After even the most
liberal-minded, open-government-committed party takes hold of the reins of [ ]
>Faith in government is more important then being
vigilant.
If you list countries where the people most trust/distrust their government you will
find that the countries where people believe their government will do the right thing are
the more pleasant places on earth.
>>
If you don't trust government will do the right thing then you do not only have to
live with inefficiencies but also with bridges crashing in rivers.
>>As an American, I cannot believe you are capable
of writing all that you have, with such conviction, clarity and truth, and yet not be
able to see why our founding fathers saw the need to ensure that in order to safeguard
these freedoms as coded in our constitution, they also saw the need to ensure the right
of our electorate to wield marshal implements of force via the second amendment.
Alas in hind-site, it has not done, nor will it ever do the Americans much good, as
they are only a but a decade or so behind the UK in the state of their civil
liberties.
Perhaps the ignorance and incompetence of the electorate is more than evenly
matched with the same on the part of the government, such would be paint a bleak picture
for the civil liberties of any country.
I agree with your observations, but I don't think it is good idea to rely on
incompetence to safeguard us from encroaching government. A few years ago there was
an article (I think) in The Economist, arguing (with the example of Italy) that corruption
there was positive as people could buy their way out of the more overbearing regulations.
Relying on either corruption or incompetence to be there when you want it strikes me
as foolish.
Incidentally, while some forms of proportional representation might be a good idea, the
one that politicians seem to lust after these days is the Party List system, which is
clearly worse than the disease.
But, I wonder whether the problem of government can really be solved by limiting the
competence of goverment and restricting the information at its disposal.
>
People who need power may be more easily able to gain control of incompetent
governments than competent ones. Transparency is necessary (but not sufficient) to hold
public officials accountable.
>>
Because human nature is the root cause of governments abusing their power, this has to
be taken account of in prevention.
My solution would be for the right to vote, or stand for public office, or be
employed as a journalist to be given to people who have passed an examination on
Thomas Paine's ideas, in particular that goverment officials are public servants, and
their postition is a temporary privilege, not a permamanent entitlement.
"The polis was made for the amatuer. Its ideal was that every citizen should play his
part in all of its many activities - an ideal that is recognizably descended from the
generous homeric conception of arete as an all round excellence and an all round activity.
It implies a respect for the wholeness or the oneness of life, and consequent dislike of
specialization. It implies a contempt for efficiency - or rather a much higher idea
of efficiency which exists not in one department of life, but in life itself.
The state to be effective needs a loyal, blind and specialized
machinery.
>>
If you want to undermine the power of the state then you need to revive the ancient
Greek concept of polis. The Decision making process at all levels should me entrusted to
the people who as citizens should have as their right and obligation the exercising for a
short period of time of certain civil service duties in conformity with their knowledge
and professional skills.
"It was breath-taking and depressing to observe the transformation of New Labour after
1997, from the party of open government, human rights and civil liberties into an
increasingly paranoid group of power-hogging and repressive political control freaks, who
have done more damage to fundamental human rights in the past 11 years than any other
(sequence of) government(s) in any comparable-length stretch of time since the Glorious
Revolution." (tags: politics labour newlabour buiter willembuiter ft comment commentary)
Filed under Play | [ ]
Unfortunately for us libertarians, this incompetence is going to be costly when
1) trillions are spent as anti-depressants.
2) regulations/taxes are built to counter balance the squeeling pigs at the troth.
3) efficiencies are lost due to the large amount of effort navigating the loop
holes.
I'm with Will on this one. In my experience the only good governments are unpopular
ones. All in all this piece seems to be a good argument for proportional representation.
Let's have permanently hamstrung governments, then we can all be industrious, cultivate the
earth, import commodities by sea, build commodiously, move and remove things using
instruments which require much force, know the face of the earth, account for time,
cultivate the arts, write letters, socialise and most of all, be free of fear. Which of
course is what our political representatives want for us all, now don't they?
hear hear. I have witnessed first hand paternalistic and repressive regimes in the
Middle East who use national security to legitimise their control and intrusion into
the lives of their people.
It is unbelievable that the Labour Govt is salami slicing away our liberty in much
the same way and even more unbelievable that the people of this country, a country that
first espoused and defended modern notions of liberty, should remain so passive and
docile in the face of creeping tyranny.
>>
We are betraying every man and woman who sacrificed their own liberty in the face of
oppression in order to defend ours.
Like Alex, it seems to me that relying on government incompetence is not
enough.
>>
During the twentieth century, totalitarian regimes managed to assume political control
after public confidence had eroded because of the perceived incompetence of their
predecessors. Perhaps a minimum level of competence is a necessary evil, but how is it
ensured?
The quote below from your blog may point to an answer, "After even the most
liberal-minded, open-government-committed party takes hold of the reins of government, it
takes never more than a single term of office, four years - five at the most - before
paranoia takes over. Disagreement becomes dissent, dissent becomes disloyalty,
disloyalty becomes betrayal and betrayal becomes treason. The public interest
merges seamlessly with the private interest of the incumbents. The state bureaucracy,
where it has not been taken over by government loyalists on day one of the new
administration, is gradually transformed into an arm of the government."
>
Limiting individual politicians to one term in the government has merit or perhaps
even to one term as an MP. It could be included in your ."written, modern Bill of Rights
(which) would also help to redress the balance of power between the overweening executive
and the rest - the timid, gutless and toothless parliament, the emasculated judiciary and
the disenfranchised electorate".
>>
The elimination of a life-time career in parliamentary politics may make parliament
less timid, gutless and toothless and even enhance government competence.
Government may be inherently incompetent at certain functions, such as road repair, but they have proven themselves to be inherent experts at another function,
repression.
Thus I am not comforted one bit to know that an army of bureaucrats cannot build a
better levee or process a basic permit within a month. These are not core competencies
for a monopoly on coercive force. Applying coercive force - wars, death camps,
extortion - is government's special talent and they are good at it I assure
you.
>
The weakness in government's monopoly on legitimized coercive force is that this
monopoly is granted, to varying degrees, by the people. When enough people feel
repressed, a revolution can occur, the military can mutiny, or votes can be cast. Thus,
to a certain degree, the people grant themselves their own level of freedom by being
sufficiently fed up with their government.
>>
They also deny themselves freedom through theocracy, apathy, hatred for others,
propensity toward war, tribalism, and nationalism (a synonym for patriotism or
state-worship).
Sustained freedom can only occur in societies that distrust their government and
see it as "a necessary evil" to be controlled and scrutinized. If you want to
know where the best place to live will be in 20 years, take a survey. I fear that most of
the English speaking world now prefers totalitarianism.
Oops, wrong paste. Here is what I wanted to actually comment:
" It is unbelievable that the Labour Govt is salami slicing away our liberty in
much the same way and even more unbelievable that the people of this country, a country
that first espoused and defended modern notions of liberty, should remain so passive and
docile in the face of creeping tyranny. "
>
Buiter's argument, especially as it relates to New Labour, is ridiculous, and as the
quote above has it backwards.
>
New Labour's major fault is that they are too poll driven (following rather than
leading public opinion), and therefore they have been unwilling to resist the strong
demand by a majority of the voters for more repression, less civil liberties, more state
interference in private lives.
>
If you notice, the Tories have been campaigning for the same, but even further to the
right, as it were.
>
The big driver is the growing number of elderly rentiers among voters, people who much
prefer (the illusion of) safety to liberty, people who are just a little less
authoritarian than the usual flog-n-hang them class.
>
ASBOs, CCTV, detention without trial, are all wildly popular with voters, and every
time the government or the opposition want to pander to buy themselves some votes without
spending they propose new nasty attacks on liberty, especially the liberty of nasty young
people to misbehave and irritate their elders.
>
The greatest threat to liberty is not the parties, which only do what the polls tell
them, but voters, whose demand for practical fascism has driven a lot of politics in the
USA and the UK (and several other countries, as in many the baby boom generation has
reached middle and old age) over the past 2-3 decades.
>>
These voters are sitting pretty, vested in careers, pensions, properties, and their
main feeling is fear; they see all change as a threat, not an opportunity, a threat to
their enjoyment of all they are vested in.
"1125 A.D. In this year before Christmas King Henry sent from Normandy to England and
gave instructions that all moneyers be deprived of their members Bishop Roger of Salisbury
commanded them all to assemble at Winchester by Christmas. When they came hither they were
then taken one by one, and each deprived of the right hand and the testicles below. All
this was done in twelve days between Christmas and Epiphany, and was entirely justified
because they had ruined the whole country by the magnitude of their fraud which they paid
for in full." - The Laud Chronicle (E)
Couldn't agree more (unfortunately). I never could trust a government that just
promised the "third way". >> Now I am starting to recognise how countries slip down a
slippery slope towards being police states.
He looks at Government and its spending through the eyes of a monetarist. He makes
some good points, but never really goes far enough.
>
I advocate the complete abolition of all taxation. It seems an absurd proposition.
However, all one need do is add up the costs and benefits of Taxation to convince
themselves.
>
The costs of Taxation are incalculably immense. The financial benefit of Taxation,
interest savings, is nil when you examine the nation's finances from the nation's
vantage.
>
Not one person has ever found the flaw in my argument, and they probably never
will.
>
Mr. Buiter thinks incompetent Government is to be treasured, is a protection for its
citizens and corporations. Only an economist would ever make such an absurd
statement.
>
Well, how about a competent government firmly under control of its citizens? That to
me is preferable.
>
And one may have it by forcing Government to approach its citizens every time it needs
funds. Spend badly, and the reluctance of citizens to lend will neuter the
Government.
I think it is fair to say that, if the U.S. Financial Regulators had been more
effective, we wouldn't be facing a crisis anywhere near as serious as what we face
now.
>
So, are we to praise that incompetence?
>
It is true that it is almost impossible to identify when self-interest and ego take
over from principle and altruism, even for the most self-critical of people. In
formulating how the better models of Government are to work, this is usually addressed by
incorporating various checks and balances, by ensuring transparency, and providing "the
people" with the ability to redress the situation or system when necessary.
>
This was the thinking behind guaranteeing all U.S. Citizens the right to bear arms.
However, the era when an armed citizenry had a reasonable opportunity to redress
mis-Government is long past. Most mis-Government now is far more subtle; a phenomenon
creeping over our rights by years of one tiny step at a time. Witness the juggling of
Electoral boundaries in the U.S..
>
Growing up in the '60's, we all had a sense that humanity was invincible. There was
nothing that we could not do, no challenge that we could not meet, if we all put our
minds to it.
>
That spirit ended with the assassination of President Kennedy. But I wonder if that is
really where we should let it lie?
>
One little book from the '60's which has stuck in the back of my mind ever since, is
Paul & Percival Goodman's "Communitas". This was not about hippie communes, but a
fascinating look at 3 different methods of socio-economic organization, drawing out the
implications of each. What is fascinating, in the context of this article, is not just
the scope of the authors' vision, but their ability to analyse the practical implications
of those visions. Perhaps I need to add that all scenario's considered were fundamentally
capitalist.
>
Perhaps the biggest curse we face, in such considerations, is that major changes to
the entrenched structure are far easier to implement under the provocation of extreme
trauma. And no one in their right mind is going to force that on any society.
>
But I think that giving up on the idea that Government can be more effective, or more
appropriate is wrong.
>
It has been fascinating, for an "outsider", to watch the reactions of Economists to
the Global Financial Crisis. One thing is clear – there is no one Economic Theory
which is accepted as providing accurate guidance on how to resolve the crisis, or which
can accurately predict the results of the measures implemented to date, and proposed for
the future.
>
Granted, Economists are dealing with human behaviour, which resists simplistic
formulations. But human behaviour can be shaped by good policy. And, in the long run,
Economists can fall back on the same method Engineers & Scientists use when a problem
becomes too intractable for analytic methods – simulation.
>
So at this time I would have expected FT to be commenting on the status of Economic
theory. Instead, we find an article questioning the usefulness of Government?
>>
Thanks, Willem, for a stimulating article, however I am not happy with giving up the
idea that we can effectively govern ourselves, any more than giving up on the goal of a
sound theory of Economics.
Through the works of various professionals and their organisations, they promote
restrictions on personal liberties - eg via excessive political correctness, via too
wide-ranging "anti-discriminatory" politics (that are, in reality, divisive), etc. They
now hold excessive power over governments, such that their claimed 'egalitarian' aims are
passed into law by those governments.
>>
Government does not need to be competent: the professionals will ensure effective
application of those restrictions on personal liberty.
Early man had no formal government, yet there was art, organisation, development, even
trade. Society is not a creation of government; governments grew out of society, as a
better form of group organisation. Sadly, government has also meant power and has given
opportunities to those who seek power. Once, professionals acted as a restraining
force
on governments. Now they, and governments, have too much power.
Why do you keep on calling the current Crisis as credit crisis and not "Fraud by the
accountants or goverment" crisis ?
Why don't you call for a jail punishment for the ones who failed and damaged our society
severely ?
Democracy is not just a system inwhich a majority determines, but much more a system
which is run by the peopleand that on a daily base ?
Why don't you speak of a democratic state as just a form of self-governance ?
Why blame our leaders, while we, the people, have all the freedom to gain knowledge
and wisdom to select the leaders.
Why don't you blame us ?
>>
Greetings and a happy newyear from Holland to you all.
The short article is highly critical of US authorities "there is no effective control
by American financial "gendarmes" (police)".
>
And it goes on "There is also no moral control, the professional code of ethics having
been smashed by greed" and further "What is left is a long-lasting distrust in regard to
financial jugglers*, the object of all suspicions".
I have been thinking about this post, and I cannot accept it for one simple reason: THE
BUSH ADMINISTRATION. If we haven't just seen eight years of the wreckage that ghastly
incompetence can leave, I must assume that you feel that it is something else that accounts
for their grotesque actions.
(1) Government's role does not include participating in business.
(2) Elected governments should be permitted to govern and not constantly have to worry
about being defeated (like our minority parliament in Canada).
(3) Checks and balances are good. Elected dictatorships are not.
(4) Markets work (the current froth calling for more regulation in response to the US and
world economic malaise is bizarre given that misguided and ever expanding US regulation
dating back to 1938 and FDR's New Deal (read my blog entry at http://preview.tinyurl.com/8zcd2r for more
detail) is what cause the current mess.)
>
Now as we find ourselves at the beginning of 2009 I find that I am both fearful and
hopeful at the same time.
>
I am fearful that governments around the world are using the current economic crisis
as an excuse to expand their role in society. Voters are scared and I fear government is
using that fear to its own advantage - using it to justify its growth.
>>
I am hopeful that current political leadership will pull back its now formidable reach
into business (with the US stimulus Obama is really becoming "CEO in Chief" as FORTUNE
magazine pointed out) after our economies recover. Naive, I know.
Posted by: Mark
Mawhinney |
January 4th, 2009 at 8:49 pm |
Report this comment
>>Happy New Year!, Willem (and all). Thanks for great blogging memories for 2008.
Hopefully, more of the same for 2009 and on.
Willem, you are an inspiration to all that believe in freedom and liberty from
tyranny.(I particularly liked Jackson Hole!) Let us hope that the State's incompetence
continues well into the future. If not, let REVOLUTION reign.
Posted by: groucho |
January 4th, 2009 at 11:09 pm |
Report this comment
>>If Mr Buiter and his cheering squad are so in love with incompetent government
one would expect them to be moving to Zimbabwe which has the most incompetent government
on Earth. They don't really want incompetent government, they want mistakes made in their
favor. They want police to make mistakes on their intoxication tests, not others. They
want government to miss their falsehoods on tax returns but collect enough from others so
taxes don't have to be raised on others.
I've worked in business, cooperatives, charities and government; it's not that
government becomes incompetent, people__through putting their selfish interests ahead of
the group or organization__make the organization less capable of accomplishing its tasks.
A big part of the problem is that we all refuse to see our pursuit of our selfish
interests as the root of the problem.
[ ] 2009. Unless you are a member of the NuLabour government, of course, in which case
I hope that you read this, come to your senses, realise what you and your cronies have
done, and hang [ ]
Perhaps, I, having twice experienced first hand how easy it is for a populist
government to subvert democracy; am overly-pessimistic but I think "incompetence" is too
benign a descriptor. They may be incompetent in their application but not, I believe, in
their intent. >> To quote a comment made at a time of concentrated assaults by the
French military, catholic church and a sizeable spread of popularly-elected right-wing
politicians on French human rights (1890s): "Je participe, pour l'order; contre la justice
et la verite." (I am, for the sake of order, against justice and truth.)
Now that many people in democratic countries are about the feel the chill winds of
severe economic hardship including unemployment and a poverty not seen since the early
20th century, so called "public security" laws will be an excellent mechanism for order
to triumph over truth and justice. In this regard, I recommend Naomi Wolf's article in
The Guardian of the 24th of April, 2007 entitled "Fascist America, in 10 easy steps". The
word "America" can be substituted with the notionally democratic country of your
choice.
I agree with the gist your analysis. However, the prescription of incompetent
government, while interesting (and, I'm sure, issued with a degree of nonchalance), does
seem to go too far.
>
Consider, for instance, whether a state that wields its antitrust powers incompetently
can prevent the formation of cartels that expropriate the public and eventually capture
the state? In modern society, there are too many areas that require the competent
application of state power for state incompetence to be permissible.
>>
The only way around the problem of state encroachment is probably to enshrine the
limited role of the state firmly in the constitutional acts of the polity and take
measures to prevent the concentration of power, as the American colonists attempted to
do. If consciousness among the public of the importance of such liberties is sufficiently
strong, I believe they can be defended in the long run.
Professor of European Political Economy, London School of Economics and Political
Science; former chief economist of the EBRD, former external member of the MPC;
adviser to international organisations, governments, central banks and private
financial institutions.
This is a classic catch 22 situation with this "oath" described below...
Also I think a lot of professors of neo-classical economics look like the member of Komsomol
described below ;-) For them it is about opening new opportunities for advancement not about the
truth and the level of corresponding to the reality of this pseudo-scientific neo-classical garbage, with the smoke screen of
mathematics as a lipstick on the pig (mathiness)
Most such people will teach students complete garbage understanding that this is a complete garbage with a smile.
Still, in in Soviet way it is possible for some to accept the position and work to undermine neo-classical economics acting within
the institution using Aesopian language in lectures and papers.
"... Consider an example from the contemporary United States. Today a number of private universities, colleges, and schools in several states require teachers and professors to take a "loyalty oath" to ensure that they do not "hold or foster undesirable political beliefs.... ..."
"... From a political standpoint she disagreed with the practice of taking loyalty oaths, and later, in her role as professor of the sociology of law, she voiced political positions counter to those mentioned in the oath and challenged the oath-taking practice itself. ..."
"... However, before she could do this, she first had to take the oath, understanding that without this act she would not be employed or recognized by the institution as a legitimate member with a voice authorized to participate in teaching, research, and the institution's politics (committees, meetings, elections, and so forth), including even the possibility to question publicly the practice of taking oaths. ..."
"... "The oath did not mean much if you took it, but it meant a lot if you didn't." ..."
"... However, "when a vote had to be taken, everyone roused -- a certain sensor clicked in the head: 'Who is in favor?' -- and you raised your hand automatically" (see a discussion of such ritualized practices within the Komsomol in chapter a). ..."
"... Participating in these acts reproduced oneself as a "normal" Soviet person within the system of relations, collectivities, and subject positions, with all the constraints and possibilities that position entailed, even including the possibility, after the meetings, to engage in interests, pursuits, and meanings that ran against those that were stated in the resolutions one had voted for. ..."
"... These acts are not about stating facts and describing opinions but about doing things and opening new possibilities. ..."
A general shift at the level of concrete ritualized forms of discourse, in which the
formal dimension's importance grows, while the
informal, substantiative dimension opens up to new meanings, can and does occur in different historical and
cultural contexts.
Consider an example from the contemporary United States. Today a number of private
universities, colleges, and schools in several states require teachers and professors to take a
"loyalty oath" to ensure that they do not "hold or foster undesirable political
beliefs....
While the statutes vary, [these institutions] generally deny the right to teach to those who
cannot or will not take the loyalty oath" (Chin and Rao 2003, 431 -32). Recently, a sociologist
of law took such a loyalty oath at a Midwestern university when her appointment as a professor
began.
From a political standpoint she disagreed with the practice of taking loyalty oaths, and
later, in her role as professor of the sociology of law, she voiced political positions counter
to those mentioned in the oath and challenged the oath-taking practice itself.
However, before
she could do this, she first had to take the oath, understanding that without this act she
would not be employed or recognized by the institution as a legitimate member with a voice
authorized to participate in teaching, research, and the institution's politics (committees,
meetings, elections, and so forth), including even the possibility to question publicly the
practice of taking oaths.
Here, the informal, substantiative dimension of the ritualized act experiences a shift, while the
formal dimension remains fixed and important: taking the oath opens a world of
possibilities where new informal, substantiative meanings become possible, including a professorial position
with a recognized political voice within the institution. In the sociologist's words, "The
oath did not mean much if you took it, but it meant a lot if you didn't." 3
^
This example illustrates the general principle of how some discursive acts or whole types of
discourse can drift historically in the direction of an increasingly expanding formal
dimension and increasingly open or even irrelevant informal, substantiative dimension. During Soviet late
socialism, the formal dimension of speech acts at formal gathering and rituals became
particularly important in most contexts and during most events.
One person who participated in large Komsomol meetings in the 1970s and 1980s described how
he often spent the meetings reading a book. However, "when a vote had to be taken, everyone
roused -- a certain sensor clicked in the head: 'Who is in favor?' -- and you raised your hand
automatically" (see a discussion of such ritualized practices within the Komsomol in chapter
a).
Here the emphasis on the formal dimension of organizational discourse was unique both
in scale and substance. Most ritualized acts of "organizational discourse" during this time
underwent such a transformation.
Participating in these acts reproduced oneself as a
"normal" Soviet person within the system of relations, collectivities, and subject positions,
with all the constraints and possibilities that position entailed, even including the
possibility, after the meetings, to engage in interests, pursuits, and meanings that ran
against those that were stated in the resolutions one had voted for.
It would obviously be wrong to see these acts of voting simply as informal, substantiative statements
about supporting the resolution that are either true (real support) or false (dissimulation of
support). These acts are not about stating facts and describing opinions but about doing
things and opening new possibilities.
After 2008 free market economists should be treated at their face value: as academic
charlatans. Now they are treated as goods which are past their shelf life in China and that's a
progress.
Notable quotes:
"... The Chinese don't need, and don't want, a bunch of arrogant pro-US intellectuals giving them lectures. I can't say I blame them. ..."
"... No, that is because after WW2 the US was the only major economy left standing that hadn't been wrecked, and they were in the box seat to set the agenda post Bretton-Woods (and cement for themselves the leading dominant role). The USD is being used increasingly as a cudgel to enforce US hegemony, and that will lead much of the world to seek alternatives. It's happening now, slowly at first, and will only gain speed from here. ..."
During my last visit I stopped by the offices of what remained of the Unirule Institute of
Economics. The well-respected organization was formed in 1993 by six economists, most
importantly Mao Yushi (no relation to Mao Zedong) and Sheng Hong. My organization, the Cato
Institute, gave the former the 2012 Milton Friedman Prize for Advancing Liberty to honor his
work on behalf of human freedom. Now retired at the age of ninety, Mao Yushi paid a price for
activism. Noted his award citation, Mao "has faced severe punishment, exile, and near
starvation for remarks critical of a command-based economy and society." The late Liu Xiaobo, a
Nobel laureate, said of Mao: his "bravery is worthy of our respect."
However, despite the hardship of its founder, Unirule was no revolutionary political
organization. Its name stood for "universal rules," essentially the rule of law. Its focus was
moving toward a more market-oriented economy. The group's work was scholarly, performed by
economists and academics. Its publications were high-brow, its books often published in China.
Unirule's international contacts were mainstream and focused on economic reform.
That Unirule prospered demonstrated how far the PRC had come from the bad old days under Mao
Zedong. Economic integration with the West by no means delivered a libertarian China. Still,
the increasingly vibrant private economy expanded personal autonomy, opening up space absent
since the PRC's founding seventy years ago.
As for politics, other than the question of the Chinese Communist Party's monopoly of power,
most issues could be at least discussed and sometimes debated in academic and other settings. A
vaguely independent media developed, which reported on misdeeds of local governments and
officials. Although this slightly diluted authoritarianism might have appeared to be weakness
to a few who pined for the days of the Cultural Revolution, the system offered a release valve
for people who had no control over their rulers.
That gave CCP officials additional ideas to consider and solutions to employ. Unirule
sponsored lectures, ran conferences, and published books. The group consulted with both local
governments and state companies. Even the national authorities appeared to respect if not
necessarily love Unirule. (In 1980 the government even invited Nobel Laureate Milton Friedman
to Beijing to get his advice.) Asked Jude Blanchette, at the Center for Strategic and
International Studies: "Without independent voices offering alternative viewpoints, how can
China's leaders make effective decisions."
Allowing discussion -- if not exactly dissent -- also might have drained away some of the
dissatisfaction that otherwise would have accumulated against the regime. The pervasiveness of
corruption and intensity of resulting public disgust highlighted the threat both from and to
Communist rule, which came much more from the natural consequences of the monopoly of power
rather than from the expression of discontent with that monopoly.
However, Xi Jinping's ascension to head of both party and government became a dramatic
political inflexion point...
... ... ...
The state agency which sponsored it dropped the affiliation. Newspapers stopped running
articles by its staffers. Discussions of its activities on social media, including the Chinese
phenomenon WeChat, were blocked. Venues cancelled Unirule events. The website was closed down.
Then the organization was twice pushed out of professional spaces. Last year the landlord,
under pressure from regulators, welded the office door shut with staffers still inside; they
had to call the police for rescue. About ten employees and a mass of books, papers and files
ultimately crammed into a small apartment ten floors up in an aged apartment building in a
distant suburb.
The group's latest book, a collection of academic papers, is ready for publication but was
rejected by the PRC's information overseers. The process has been transferred from state to
party, ensuring that everything will be assessed for its propaganda value. More seriously,
Unirule's business license was cancelled, a move the group was fighting. Sheng said he planned
to focus on economic research if the CCP interdict took hold.
... ... ...
A few weeks after my visit Unirule's life appears to have run out. The group announced that
the local government had declared it to be "unregistered and unauthorized." Although Unirule
plans to fight the diktat in court, Sheng admitted that it had essentially no chance of
prevailing and has begun the liquidation process. "We no longer have any space for survival,"
Sheng told the Wall Street Journal . He previously noted that Unirule had been careful
to follow the rules, so the Xi regime wished for the reformers to "disappear by ourselves."
Apparently Xi or someone else high up grew tired of waiting.
... ... ...
Doug Bandow is a senior fellow at the Cato Institute. A former special assistant to
President Ronald Reagan, he is the author of several books, including Foreign Follies: America's New Global Empire .
Nixon's initiative to integrate China with the USA was the biggest strategic mistake the
US ever did. It did not lead to democratization, but rather helped build a powerful
totalitarian Orwellian state.
China clearly has a long term strategic plan how to become the
world leader, and to this end, it steals western technology, locks other nations into dept
traps, builds fifth columns in other countries, uses propaganda and cultural subversion. It
is not yet too late to withdraw all western investment from China and to isolate the country.
Due to the behavior of the CCP, it has very few actual friends.
The strategic plan and task to defeat capitalism had been handed over to China after the
Soviet Union has failed in this endeavor because economically it was no match for capitalist
USA, plus it did not integrate science and technological innovation which without it
capitalism can not be defeated.
China has achieved economic quantity and quality, and is
heading towards full scientific and technological superiority over capitalist USA in the long
run.
In this way socialism through science defeats and overtakes capitalism. Science and more
science, the only way to defeat capitalism.
out of the 3 countries - USA, Russia, China - most of the world is clearly happy with USA
having the leading role, because it is the least evil. Yes, USA is not perfect, Trump is not
a great leader (to say it diplomatically), they have made mistakes (the invasion of Iraq
etc), but they are still much better than USSRv2.0 or totalitarian China.
Even in Asia, China
is widely disliked due to its arrogant and bullying behavior. The Japanese, the Koreans, the
Vietnamese, the Indonesians, none of them really like China.
The fact, that US dollar is the
leading currency has much to do with the world public perception of the stability of the
country. Ie all countries believe the US is the most stable country. So China will have real
trouble convincing the world that yuan is better. I do not believe that China will become a
leading power anytim soon.
You can keep telling yourself that, but its a crock and we non-Americans know it only too
well. Dishonesty and an inability to face truth seems to be an American trait, and the
corruption is only growing worse as the US declines.
"The Japanese, the Koreans, the Vietnamese, the Indonesians, none of them really like
China"
News for you buddy. None of these nations like each other... LOL!! You ever hear Koreans
talking about the Japanese? Now that's hatred...
" The fact, that US dollar is the leading currency has much to do with the world public
perception of the stability of the country."
No, that is because after WW2 the US was the only major economy left standing that hadn't
been wrecked, and they were in the box seat to set the agenda post Bretton-Woods (and cement
for themselves the leading dominant role). The USD is being used increasingly as a cudgel to
enforce US hegemony, and that will lead much of the world to seek alternatives. It's
happening now, slowly at first, and will only gain speed from here.
Pound Sterling used to dominate the world, now where is it? In the future, people will say
the same of the greenback.
I traveled for 1 year across Asia - SE Asia, Thailand, Vietnam, Cambodia, Laos, Indonesia
and 5 months across china. China is almost universally disliked all over Asia due to its
arrogant behavior. And even the famous Chinese investments are increasingly being perceived
as a form of Chinese neocolonialism and rejected
https://www.washingtonpost....
You know how African-Americans commit all sorts of violent crimes, hate speech, and racist
slurs just because they were victims of racial discrimination in America decades ago? It's
the same justification for violence Chinese mainlanders commit against everyone else just
because they suffered from century of humiliation. I'm suspecting that the CCP/PLA is being
coached by the black lefists in the US who have deep hatred against their perceived WASP
establishment. The pattern of angst and diatribes are almost the same.
In the survey you posted above, China is more popular than the USA in Indonesia. Other
countries like Malaysia, Laos, Bangladesh, North Korea are missing. Also, people generally tell to English speaking foreigners what they expect they want to
hear. If the survey was made by Chinese, the results would be different.
The answer is simple and obvious. Democracy and rule of law means that they all go to
jail. In all post-authoritarian shifts, the judicial branch of the government goes into
overdrive, prosecuting past leaders for their crimes. They're really stuck to
authoritarianism no-matter how hard they want democracy.
The CCP is just like a mafia. You won't get in unless you have blood in your hands, and
death is the only way out (unless you can defect to another country and if you can stomach
your immediate family members going to jail for you).
China is doing just great. Its citizens are enjoying a quality of life unprecedented in
China's history (even the author do not dispute this). So why should a democratic majority
89% (PEW) happy individuals must suffer for the selfish few?
History has shown that intellectuals make lousy leaders but great at fomenting chaos +
rebellions. And everyone knows that "soft-spoken criticisms", when weaponized, can kill
millions just as effectively as a nuclear bomb!
Our results have profound implications for the idea that the financial markets are Pareto
efficient which I explore
here in my paper on asset pricing in perpetual youth models. In that paper I assume that
monetary and fiscal policy are passive to
generate realistic asset market volatility. My paper with Pawel shows that the same results can
be generated in a realistic OLG model even when monetary and fiscal policy are active.
The way out of this apparent degeneracy of theory is to adopt an idea I first advocated in
my book on self-fulfilling
prophecies . The way that people form beliefs must be modeled as a new fundamental with the
same methodological status as preferences, technologies and endowments.
Our paper makes a mockery of the attempt to ground neoclassical theory in
'fundamentals'.
Now and again, both in professional political writings and here as I read, the term
Trotskyism is used but though I have looked up the term a few times I have no real idea what
it is supposed to mean. Possibly a reader could explain. After all, the term tankie was
explained by a prominent economist at the University of California only a few days ago and I
realized the term was absurd, simply an empty personal insult. Possibly Trotskyism is as
empty.
You are in a bad position. Generally this needs some acquaintance with Marxism as
Trotskyism is one of the most influential "deviation" from Classic Marxism (Bolshevism was
yet another).
Both used to believe in the special role of "proletariat" as the new class that will
depose older ruling classes all over the globe. Both believed in "class struggle" as the main
force of historical development of humanity. One of the key ideas of Trotskyism was the idea
of Permanent revolution -- forceful introduction of socialist regimes using subversion,
external financial injections, and armed struggle (kind of "regime change" strategy that the
USA practices now for introduction of neoliberal regimes.)
The idea of class struggle transposed as the struggle within the elite and between states
for supremacy was borrowed by the US turncoats from Trotskyism (see for example -- renegade
Trotskyite James Burnham book THE MACHIAVELLIANS: THE DEFENDERS OF FREEDOM ) who later formed
the core of the neocon movement.
Still you might try to read some sources on the WEB like:
Interestingly, one of the people the Ukrainians gave up in this exchange was Vladimir
Tsemakh, a native of the Donbass who was kidnapped by the Ukie SBU in Novorussia (our noble
"Europeans" did not object to such methods!) and declared the "star witness" against Russia in
the MH-17 (pseudo-)investigation. Even more pathetic is that
the Dutch apparently fully endorsed this load of crapola . Finally, and just for a good
laugh, check out how the infamous'
Bellingcat presented Tsemakh . And then, suddenly, everybody seem to "forget" that "star
witness" and now the Ukies have sent him to Russia. Amazing how fast stuff gets lost in the
collective western memory hole
Thus we see these apparently contradictory developments taking place: on on hand, the
Ukraine finally agreed to a prisoner swap with Russia (a painful one for Russia as Russia
mostly traded real criminals, including a least twobona fide Ukie
terrorist, against what are mostly civilian hostages, but Putin decided – correctly I
think – that freeing Russian nationalists from Ukie jails was more important in this
case) while on the other hand, the Ukronazi armed forces increased their shelling, even with
152mm howitzers which fire 50kg high explosive fragmentation shells, against the Donbass.
Whatever may be the case, this prisoner swap, no matter how one-sided and unfair, is a positive
development which might mark the beginning of a pragmatic and less ideological attitude in
Kiev.
Some very cautious beginnings of a little hint of optimism might be in order following that
exchange, but the big stuff seems to be scheduled for the meeting of the Normandy Group (NG),
probably in France. So far, the Russians have made it very clear that they will not meet just
for the hell of meeting, and that the only circumstance in which the Russians will agree to a
NG meeting would be if it has good chances of yielding meaningful results which, translated
from Russian diplomatic language simply means "if/when Kiev stops stonewalling and sabotaging
everything". Specifically, the Russians are demanding that Zelenskii commit in writing to the
so-called "
Steinmeier formula " and that the Ukrainian forces withdraw from the line of contact. Will
that happen? Maybe. We shall soon find out.
Here is my informal translation of these words:
The international order is being shaken in an unprecedented manner, above all with, if I
may say so, by the great upheaval that is undoubtedly taking place for
the first time in our history , in almost every field and with a
profoundly historic magnitude . The first thing we observe is a major
transformation, a geopolitical and strategic re-composition. We are undoubtedly
experiencing the end of Western hegemony over the world . We were accustomed to an
international order which, since the 18th century, rested on a Western hegemony, mostly
French in the 18th century, by the inspiration of the Enlightenment; then mostly British in
the 19th century thanks to the Industrial Revolution and, finally, mostly American in the
20th century thanks to the 2 great conflicts and the economic and political domination of
this power. Things change. And they are now deeply shaken by the mistakes of Westerners
in certain crises, by the choices that have been made by Americans for several years
which did not start with this administration, but which lead to revisiting certain
implications in conflicts in the Middle East and elsewhere, and to rethinking a deep,
diplomatic and military strategy, and sometimes elements of solidarity that we thought were
intangible for eternity, even if we had constituted together in geopolitical moments that
have changed. And then there is the emergence of new powers whose impact we have
probably underestimated for a long time. China is at the forefront, but also the Russian
strategy, which has, it must be said, been pursued more successfully in recent years
. I will come back to that. India that is emerging, these new economies that are also
becoming powers not only economic but political and that think themselves, as some have
written, as real "civilizational states" which now come not only to shake up our
international order but who also come to weigh in on the economic order and to
rethink the political order and the political imagination that goes with it, with much
dynamism and much more inspiration than we have. Look at India, Russia and China. They
have a much stronger political inspiration than Europeans today. They think about our planet
with a true logic, a true philosophy, an imagination that we've lost a little
bit.
... ... ...
6) " Look at India, Russia and China. They have a much stronger political inspiration
than Europeans today. They think about our planet with a true logic, a true philosophy, an
imagination that we've lost a little bit."
This is the "core BRICS" challenge to the Empire: China and Russia have already established
what the Chinese call a "Comprehensive Strategic Partnership of Coordination for the New Era".
If they can now extend this kind of informal but extremely profound partnership (I think of it
as "symbiotic") to India next, then the BRICS will have a formidable future (especially after
the Brazilian people give the boot to Bolsonaro and his US patrons). Should that fail and
should India chose to remain outside this unique relationship, then the SCO will become the
main game in town. And yes, Macron is spot on: China and, especially, Russia have a
fundamentally different worldview and, unlike the western one, theirs does have "much stronger
political" goals (Macron used the word "aspirations"), "a real philosophy and imagination"
which the West has lost, and not just a "little bit" but, I would argue, completely. But one
way or the other, and for the first time in 1000 years, the future of our planet will not be
decided anywhere in the West, not in Europe (old or "new"), but in Asia, primarily by the
Russian-Chinese alliance. As I explained here , the AngloZionist Empire is
probably the last one in history, definitely the last western one.
Perfect time for Texas to secede from the Union and return to being a Lone Star Nation
State. Price for barrels start at $95 and that's only a former friends and family rate.
This is the conflict between financial elite and Silicon Valley modules against traditional manufactures and extractive
industries like oil, gas, coil, iron ore, etc.
Notable quotes:
"... The First Estate, once the province of the Catholic Church, has morphed into what Samuel Coleridge in the 1830s called "the Clerisy," a group that extends beyond organized religion to the universities, media, cultural tastemakers and upper echelons of the bureaucracy. The role of the Second Estate is now being played by a rising Oligarchy, notably in tech but also Wall Street, that is consolidating control of most of the economy. ..."
A recent
OECD report , is under assault, and shrinking in most places while prospects for upward
mobility for the working class also declines.T
he anger of the Third Estate, both the growing property-less Serf class as well as the
beleaguered Yeomanry, has produced the growth of populist, parties both right and left in
Europe, and the election of Donald Trump in 2016. In the U.S., this includes not simply the
gradual, and sometimes jarring, transformation of the GOP into a vehicle for populist rage, but
also the rise on the Democratic side of politicians such as Sens. Bernie Sanders and Elizabeth
Warren, each of whom have made class politics their signature issue.
Today's neo-feudalism recalls the social order that existed before the democratic
revolutions of the 17th and 18th Century, with our two ascendant estates filling the roles of
the former dominant classes.
The First Estate, once the province of the Catholic Church, has
morphed into what Samuel Coleridge in the 1830s called "the Clerisy," a group that extends
beyond organized religion to the universities, media, cultural tastemakers and upper echelons
of the bureaucracy. The role of the Second Estate is now being played by a rising Oligarchy,
notably in tech but also Wall Street, that is consolidating control of most of the economy.
Together these two classes have waxed while the Third Estate has declined. This essentially
reversed the
enormous gains made by the middle and even the working class over the past 50 years. The
top 1% in America captured just 4.9 percent of total U.S. income growth in 1945-1973, but since
then the country's richest classes has gobbled up an astonishing 58.7% of all new wealth in the
U.S., and 41.8 percent of total income growth during 2009-2015 alone.
In this period, the Oligarchy has benefited from the financialization of the economy and the
refusal of the political class in both parties to maintain competitive markets. As a result,
American industry has become increasingly concentrated. For example, the five largest banks now account
for close to 50 percent of all banking assets, up from barely 30 percent just 20 years ago.
(RELATED: The
Biggest Bank You've Never Heard Of)
Warren Buffett, Jeffrey Immelt, Charles Schwab and Jamie Dimon, at Georgetown University.
Chip Somodevilla/Getty Images.
The concentration numbers in tech are even more frightening. Once a highly competitive
industry, it is now among the most concentrated
. Like the barbarian chieftains who seized land after the fall of Rome, a handful of companies
-- Facebook , Google
, Apple, Microsoft
and
Amazon -- have gained total control over a host of markets, from social media to search,
the software operating systems, cloud computing and e-commerce. In many key markets such as
search, these companies enjoy market shares reaching to eighty or ninety percent.
As they push into fields such as entertainment, space travel, finance and autonomous
vehicles, they have become, as technology analyst
Izabella Kaminska notes, the modern-day "free market" equivalents of the Soviet planners
who operated Gosplan, allocating billions for their own subjective priorities. Libertarians
might point out that these tech giants are still privately held firms but they actually
represent
, as one analyst put it, "a new form of monopoly power made possible by the 'network effect' of
those platforms through which everyone must pass to conduct the business of life."
The role of the Clerisy
The new feudalism, like the original, is not based simply around the force of arms, or in
this case what Marx called "the cash nexus." Like the church in Medieval times, the Clerisy
sees itself as anointed to direct human society, a modern version of what historian Marc Bloch
called the "oligarchy of priests and monks whose task it was to propitiate heaven." This
modern-day version of the old First Estate sets down the ideological tone in the schools, the
mass media, culture and the arts. There's also a Clerisy of sorts on the right, and what's left
of the center, but this remains largely, except for Fox, an insignificant remnant.
Like their predecessors, today's Clerisy embraces an orthodoxy, albeit secular, on a host of
issues from race and gender to the environment. Universities have become increasingly dogmatic
in their worldview.
One study of 51 top colleges found the proportion of liberals to conservatives as much as
70:1, and usually at least 8:1. At elite liberal arts schools like Wellesley, Swarthmore and
Williams, the proportion reaches 120:1.
The increasing concentration of media in ever
fewer centers -- London, New York, Washington, San Francisco -- and the decline of the
local press has accentuated the elite Clerisy's domination. With most reporters well on the
left, journalism, as a 2019 Rand report reveals, is
steadily moving from a fact-based model to one that is dominated by predictable opinion. This,
Rand suggests has led to what they called "truth decay."
The new geography of feudalism
The new feudalism increasingly defines geography not only in America but across much of the
world. The great bastion of both the Oligarchy and high reaches of the Clerisy lies in the
great cities, notably New York, London, Paris, Beijing, Shanghai, Tokyo, San Francisco, Los
Angeles and Seattle. These are all among the most expensive places to live in the world and
play a dominant role in the global media.
Yet these cities are not the progressive, egalitarian places evoked by great urbanists like
the late Jane Jacobs, but more closely resemble the "gated" cities of the Middle Ages, and
their equivalents in places as diverse as China and Japan. American cities now have higher
levels of inequality, notes one recent study , than Mexico.
In fact, the
largest gaps( between the bottom and top quintiles of median incomes are in the
heartland of progressive opinion, such as in the metropolitan areas of San Francisco, New York,
San Jose, and Los Angeles. (RELATED: Got Income
Inequality? Least Affordable Cities Are Also the Bluest)
In some of the most favored blue cities, such as Seattle ,
Portland and San Francisco , not
only is the middle class disappearing, but there has been something equivalent of "ethnic
cleansing" amidst rising high levels of inequality, homelessness and social disorder.
Long-standing minority communities like the Albina neighborhood in
Portland are disappearing as 10,000 of the 38,000 residents have been pushed out of the
historic African-American section. In San Francisco, the black population has dropped from 18%
in the 1970s to single digits and what remains, notes Harry Alford ,
National Black Chamber of Commerce president, "are predominantly living under the poverty level
and is being pushed out to extinction."
This exclusive and exclusionary urbanity contrasts with the historic role of cities. The
initial rise of the Third Estate was tied intimately to the " freedom of the city . " But with
the diminishing prospects for blue-collar industries, as well as high housing costs, many
minorities and immigrants are increasingly migrating away from
multi-culturally correct regions like
Chicago , New York, Los Angeles and San Francisco for less regulated, generally less "woke"
places like Phoenix, Dallas-Ft. Worth, Houston, Atlanta and Las
Vegas.
Yet even as the middle-class populations flee, poverty remains deeply entrenched in our big
cities, with a rate roughly twice that of the suburbs. The much-celebrated urban renaissance
has been largely enjoyed by the upper echelons but not the working classes.
In the city of Philadelphia , for example, the "center city" income rose, but citywide
between 2000 and 2014, for every district that, like downtown, gained in income, two suffered
income declines. Similarly, research shows
that the number of high poverty (greater than 30 percent below the poverty line) neighborhoods
in the U.S. has tripled since 1970 from 1,100 to 3,100.
Undermining the Third Estate
The impact of the rising Clerisy and Oligarchs poses a direct threat to the future of the
Third Estate. On the economic side, relentless consolidation and financialization has
devastated Main Street. In the great boom of the 1980s, small firms and start-ups powered the
economy, but more recently the
rates of entrepreneurship have dropped as mega-mergers, chains and on-line giants slowly
reduced the scope of opportunities. Perhaps most disturbing of all has been the decline in new
formations among younger people.
This phenomenon is most evident in the tech world. Today is not a great time to start a tech
company unless you are in the charmed circle of elite firms with access to venture and private
equity funds. The old garage start-up culture of Silicon Valley is slowly dying, as large firms
gobble up or crush competitors. Indeed, since the rise of the tech economy in the 1990s, the
overall degree of industry
concentration has grown by 75 percent.
Like the peasant farmer or artisan in the feudal era, the entrepreneur not embraced by the
big venture firms lives largely at the sufferance of the tech overlords. As one online
publisher notes on his firm's status with Google:
If you're a Star Trek fan, you'll understand the analogy. It's a bit like being
assimilated by the Borg. You get cool new powers. But having been assimilated, if your
implants were ever removed, you'd certainly die. That basically captures our relationship to
Google.
The Clerisy's War on the Middle Class
For generations, the Clerisy has steadfastly opposed the growth of suburbia, driven in large
part by the aesthetic concerns –the conviction that single-family homes are fundamentally
anti-social– and, increasingly, by often dubious assertions on their environmental
toxicity. In places like California, the United Kingdom, Australia and Canada, government
policies discourage peripheral construction where home ownership rates tend to be higher, in
favor of dense, largely rental housing.
This marks a dramatic turnaround. During the middle of the 20th Century, ownership rates in
the United States leaped from 44 percent in 1940 to 63 percent in the late 1970s. Yet in the
new generation this prospect is fading. In the United States, home ownership among post-college
millennials (aged 25-34) has dropped from 45.4 percent in 2000 to 37.0 percent in 2016, a drop
of 18 percent from the 1970s, according to
Census Bureau data . In contrast, their parents and grandparents witnessed a dramatic rise
of homeownership from 44 percent in 1940 to 63 percent 30 years later.
But the Clerisy's war on middle- and working-class aspiration goes well beyond housing.
Climate change policies already enacted in California
and Germany
have driven millions into "energy poverty." If adopted, many of the latest proposals for such
things as the Green New Deal all but guarantee the
rapid reduction of millions of highly productive and often well-paying energy, aerospace,
automobile and logistics jobs.
Political implications
The war of the Estates is likely to shape our political landscape for decades to come. Parts
of the Third Estate –those working with their hands or operating small businesses–
increasingly flock to the GOP, according to a recent CityLab report. Trump also has a case to make with these workers, as real wages
for
blue-collar workers are now rising for the first time in decades. Unemployment is near
record lows not only for whites but also Latinos and African-Americans. Of course, if the
economy weakens, he may lose some of this support. (RELATED: Trump Blasts Media For
'Barely' Covering 'Great' Economy, Low Unemployment)
But the emergence of neo-feudalism also lays the foundation for a larger, more potent and
radicalized left. As opportunities for upward mobility shrink, a new generation, indoctrinated
in leftist ideology sometimes from grade school and ever more predictably in undergraduate and
graduate school, tilts heavily to the left, embracing what is essentially an updated socialist
program of massive redistribution, central direction of the economy and racial
redress.
Antifa members in Berkeley, California. AFP/Getty/Amy Osborne.
In France's most recent presidential election, the
former Trotskyite Jean-Luc Melenchon won the under-24 vote, beating the "youthful" Emmanuel
Macron by almost two to one. Similarly in the United Kingdom, the birthplace of modern
capitalism, the
Labour Party , under the neo-
Marxist Jeremy Corbyn , won over 60 percent of the vote among voters under 40, compared to
just 23 percent for the Conservatives. Similar trends can be seen across Europe, where the Red
and
Green Party enjoys wide youth support.
The shift to hard-left politics also extends to the United States– historically not a
fertile area for Marxist thinking. In
the 2016 primaries , the openly socialist
Bernie Sanders easily outpolled Hillary Clinton and Donald Trump combined. A 2016 poll by
the Communism Memorial
Foundation found that 44 percent of American millennials favored socialism while another 14
percent chose fascism or communism. By 2024,
these millennials will be by far
the country's biggest voting bloc .
In the current run-up to the Democratic nomination these young voters
overwhelming tilt toward Sanders and his slightly less radical colleague Warren, while former
Vice President Joe Biden retains the support of older Democrats. The common themes of the "new"
Left, with such things as guaranteed annual incomes, rent control, housing subsidies, and free
college might prove irresistible to a generation that has little hope of owning a home, could
remain childless, and might never earn enough money to invest in much of anything. (RELATED: Bernie Sanders Says 'Health Care For All' Will Require Tax Increases)
At the end, the war of the estates raises the prospect of rising autocracy, even under
formally democratic forms. In his assessment in "Democracy in America ," Alexis de
Tocqueville suggests a new form of tyranny -- in many ways more insidious than that of the
monarchical state -- that grants favors and entertainments to its citizens but expects little
in obligation. Rather than expect people to become adults, he warns, a democratic state can be
used to keep its members in "perpetual childhood" and "would degrade men rather than tormenting
them."
With the erosion of the middle class, and with it dreams of upward mobility, we already see
more extreme, less liberally minded class politics. A nation of clerics, billionaires and serfs
is not conducive to the democratic experiment; only by mobilizing the Third Estate can we hope
that our republican institutions will survive intact even in the near future.
Mr. Kotkin is the Presidential Fellow in Urban Futures at Chapman University and the
executive director of the Center for Opportunity Urbanism. His next book, "The Coming Of
Neo-Feudalism," will be out this spring.
The views and opinions expressed in this commentary are those of the author and do not
reflect the official position of the Daily Caller.
The collapse of neoliberalism naturally lead to the collapse of the US influence over the globe. and to the treats to the dollar
as the world reserve currency. That's why the US foreign policy became so aggressive and violent. Neocons want to fight for the
world hegemony to the last American.
Notable quotes:
"... US foreign policy is ever more unstable and confrontational ..."
"... Bolton's brutal defenestration has raised hopes that Trump, who worries that voters may view him as a warmonger, may begin to moderate some of his more confrontational international policies. As the 2020 election looms, he is desperate for a big foreign policy peace-making success. And, in Trump world, winning matters more than ideology, principles or personnel. ..."
"... Since taking office in January 2017, Trump has not merely broken with diplomatic and geopolitical convention. He has taken a wrecking ball to venerated alliances, multilateral cooperation and the postwar international rules-based order. ..."
"... The resulting new world disorder – to adapt George HW Bush's famous 1991 phrase – will be hard to put right. Like its creator, Trump world is unstable, unpredictable and threatening. Trump has been called America's first rogue president. Whether or not he wins a second term, this Trumpian era of epic disruption, the very worst form of American exceptionalism, is already deeply entrenched. ..."
"... driven by a chronic desire for re-election, Trump's behaviour could become more, not less, confrontational during his remaining time in office, suggested Eliot Cohen, professor of strategic studies at Johns Hopkins university. ..."
"... "The president has proved himself to be what many critics have long accused him of being: belligerent, bullying, impatient, irresponsible, intellectually lazy, short-tempered and self-obsessed," Cohen wrote in Foreign Affairs journal . "Remarkably, however, those shortcomings have not yet translated into obvious disaster. But [that] should not distract from a building crisis of US foreign policy." ..."
"... This pending crisis stems from Trump's crudely Manichaean division of the world into two camps: adversaries/competitors and supporters/customers. A man with few close confidants, Trump has real trouble distinguishing between allies and enemies, friends and foes, and often confuses the two. In Trump world, old rules don't apply. Alliances are optional. Loyalty is weakness. And trust is fungible. ..."
"... The crunch came last weekend when a bizarre, secret summit with Taliban chiefs at Camp David was cancelled . It was classic Trump. He wanted quick 'n' easy, primetime credit for a dramatic peace deal, pushed ahead blindly, then changed his mind at the last minute. Furious over a debacle of his own making, he turned his wrath on others, notably Bolton – who, ironically, had opposed the summit all along. ..."
"... With Trump's blessing, Israel is enmeshed in escalating, multi-fronted armed confrontation with Iran and its allies in Iraq, Lebanon and Syria. Add to this recent violence in the Gulf, the disastrous Trump-backed, Saudi-led war in Yemen, mayhem in Syria's Idlib province, border friction with Turkey, and Islamic State resurgence in northern Iraq, and a region-wide explosion looks ever more likely. ..."
"... "the bipartisan consensus forged in the 1990s – in which the US towered over the world and, at low cost, sought to remake it in America's image – has failed and cannot be revived", ..."
With John Bolton dismissed, Taliban peace talks a fiasco and
a trade war with China, US foreign policy is ever more unstable and confrontational
It was by all accounts, a furious row.
Donald Trump was talking about relaxing sanctions on
Iran and holding a summit with its president, Hassan Rouhani, at this month's UN general assembly in New York. John Bolton, his hawkish
national security adviser, was dead against it and forcefully rejected Trump's ideas during a tense meeting in the Oval Office on
Monday.
...Bolton's brutal defenestration has raised hopes that Trump, who worries that voters may view him as a warmonger, may begin
to moderate some of his more confrontational international policies. As the 2020 election looms, he is desperate for a big foreign
policy peace-making success. And, in Trump world, winning matters more than ideology, principles or personnel.
The US president is now saying he is also open to a repeat meeting with North Korea's leader, Kim Jong-un, to reboot stalled nuclear
disarmament talks. On another front, he has offered an olive branch to China, delaying a planned tariff increase on $250bn of Chinese
goods pending renewed trade negotiations next month. Meanwhile, he says, new tariffs on European car imports could be dropped, too.
Is a genuine dove-ish shift under way? It seems improbable. Since taking office in January 2017, Trump has not merely broken with
diplomatic and geopolitical convention. He has taken a wrecking ball to venerated alliances, multilateral cooperation and the postwar
international rules-based order. He has cosied up to autocrats, attacked old friends and blundered into sensitive conflicts he does
not fully comprehend.
The resulting new world disorder – to adapt George HW Bush's famous 1991 phrase – will be hard to put right. Like its creator,
Trump world is unstable, unpredictable and threatening. Trump has been called America's first rogue president. Whether or not he
wins a second term, this Trumpian era of epic disruption, the very worst form of American exceptionalism, is already deeply entrenched.
The suggestion that Trump will make nice and back off as election time nears thus elicits considerable scepticism. US analysts
and commentators say the president's erratic, impulsive and egotistic personality means any shift towards conciliation may be short-lived
and could quickly be reversed, Bolton or no Bolton.
Trump wanted quick 'n' easy, primetime credit for a dramatic peace deal in Afghanistan with the Taliban, pushed ahead blindly,
then changed his mind at the last minute
Trump is notorious for blowing hot and cold, performing policy zigzags and suddenly changing his mind. "Regardless of who has
advised Mr Trump on foreign affairs all have proved powerless before [his] zest for chaos," the
New York Times noted last week
.
Lacking experienced diplomatic and military advisers (he has sacked most of the good ones), surrounded by an inner circle of cynical
sycophants such as secretary of state Mike Pompeo, and driven by a chronic desire for re-election, Trump's behaviour could become
more, not less, confrontational during his remaining time in office, suggested Eliot Cohen, professor of strategic studies at Johns
Hopkins university.
"The president has proved himself to be what many critics have long accused him of being: belligerent, bullying, impatient, irresponsible,
intellectually lazy, short-tempered and self-obsessed," Cohen wrote
in Foreign
Affairs journal . "Remarkably, however, those shortcomings have not yet translated into obvious disaster. But [that] should
not distract from a building crisis of US foreign policy."
This pending crisis stems from Trump's crudely Manichaean division of the world into two camps: adversaries/competitors and supporters/customers.
A man with few close confidants, Trump has real trouble distinguishing between allies and enemies, friends and foes, and often confuses
the two. In Trump world, old rules don't apply. Alliances are optional. Loyalty is weakness. And trust is fungible.
As a result, the US today finds itself at odds with much of the world to an unprecedented and dangerous degree. America, the postwar
global saviour, has been widely recast as villain. Nor is this a passing phase. Trump seems to have permanently changed the way the
US views the world and vice versa. Whatever follows, it will never be quite the same again.
Clues as to what he does next may be found in what he has done so far. His is a truly calamitous record, as exemplified by Afghanistan.
Having vowed in 2016 to end America's longest war, he began with a troop surge, lost interest and sued for peace. A withdrawal deal
proved elusive. Meanwhile, US-led forces
inflicted record civilian casualties .
Facebook
Twitter
Pinterest The US and Israeli flags are projected on the walls of Jerusalem's Old City in May, marking the anniversary of
the US embassy transfer from Tel Aviv to Jerusalem. Photograph: Ahmad Gharabli/Getty
The crunch came last weekend when a bizarre, secret
summit with Taliban chiefs at Camp David was cancelled . It was classic Trump. He wanted quick 'n' easy, primetime credit for
a dramatic peace deal, pushed ahead blindly, then changed his mind at the last minute. Furious over a debacle of his own making,
he turned his wrath on others, notably Bolton – who, ironically, had opposed the summit all along.
All sides are now vowing to step up the violence, with the insurgents aiming to disrupt this month's presidential election in
Afghanistan. In short, Trump's self-glorifying Afghan reality show, of which he was the Nobel-winning star, has made matters worse.
Much the same is true of his North Korea summitry, where expectations were raised, then dashed when he got
cold feet
in Hanoi , provoking a backlash from Pyongyang.
The current crisis over Iran's nuclear programme is almost entirely of Trump's making, sparked by his decision last year to renege
on the 2015 UN-endorsed deal with Tehran. His subsequent "maximum pressure" campaign of punitive sanctions has
failed to cow
Iranians while alienating European allies. And it has led Iran to resume banned nuclear activities – a seriously counterproductive,
entirely predictable outcome.
Trump's unconditional, unthinking support for Benjamin Netanyahu, Israel's aggressively rightwing prime minister – including tacit
US backing for his proposed annexation of swathes of the occupied territories – is pushing the Palestinians back to the brink, energising
Hamas and Hezbollah, and
raising tensions across the region .
With Trump's blessing, Israel is enmeshed in escalating, multi-fronted armed confrontation with Iran and its allies in Iraq,
Lebanon and Syria. Add to this recent violence in the Gulf, the disastrous Trump-backed, Saudi-led war in Yemen, mayhem in Syria's
Idlib province, border friction with Turkey, and Islamic State resurgence in northern Iraq, and a region-wide explosion looks ever
more likely.
The bipartisan consensus forged in the 1990s – in which the US towered over the world and, at low cost, sought to remake it
in America's image – has failed and cannot be revived
Stephen Wertheim, historian
Yet Trump, oblivious to the point of recklessness, remains determined to unveil his absurdly unbalanced Israel-Palestine "deal
of the century" after Tuesday's Israeli elections. He and his gormless son-in-law, Jared Kushner, may be the only people who don't
realise their plan has a shorter life expectancy than a snowball on a hot day in Gaza.
... ... ...
...he is consistently out of line, out on his own – and out of control. This, broadly, is Trump world as it has come to exist
since January 2017. And this, in a nutshell, is the intensifying foreign policy crisis of which Professor Cohen warned. The days
when responsible, trustworthy, principled US international leadership could be taken for granted are gone. No vague change of tone
on North Korea or Iran will by itself halt the Trump-led slide into expanding global conflict and division.
Historians such as Stephen Wertheim say change had to come. US politicians of left and right mostly agreed that "the bipartisan
consensus forged in the 1990s – in which the US towered over the world and, at low cost, sought to remake it in America's image –
has failed and cannot be revived",Wertheim wrote earlier this year
. "But agreement ends there " he continued: "One camp holds that the US erred by coddling China and Russia, and urges a new competition
against these great power rivals. The other camp, which says the US has been too belligerent and ambitious around the world, counsels
restraint, not another crusade against grand enemies."
This debate among grownups over America's future place in the world will form part of next year's election contest. But before
any fundamental change of direction can occur, the international community – and the US itself – must first survive another 16 months
of Trump world and the wayward child-president's poll-fixated, ego-driven destructive tendencies.
Survival is not guaranteed. The immediate choice facing US friends and foes alike is stark and urgent: ignore, bypass and marginalise
Trump – or actively, openly, resist him.
Here are some of the key flashpoints around the globe
United Nations
Trump is deeply hostile to the UN. It embodies the multilateralist, globalist policy approaches he most abhors – because they
supposedly infringe America's sovereignty and inhibit its freedom of action. Under him, self-interested US behaviour has undermined
the authority of the UN security council's authority. The US has rejected a series of international treaties and agreements, including
the Paris climate change accord and the Iran nuclear deal. The UN-backed international criminal court is beyond the pale. Trump's
attitude fits with his "America First" isolationism, which questions traditional ideas about America's essential global leadership
role.
Germany
Trump rarely misses a chance to bash Germany, perhaps because it is Europe's most successful economy and represents the EU, which
he detests. He is obsessed by German car imports, on which protectionist US tariffs will be levied this autumn. He accuses Berlin
– and Europe– of piggy-backing on America by failing to pay its fair share of Nato defence costs. Special venom is reserved for Germany's
chancellor, Angela Merkel, most likely because she is
a woman who stands up to him . Trump recently insulted another female European leader, Denmark's
Mette Frederiksen, after she refused to sell him Greenland .
Israel
Trump has made a great show of unconditional friendship towards Israel and its rightwing prime minister, Benjamin Netanyahu, who
has skilfully maximised his White House influence. But by moving the US embassy to Jerusalem, officially condoning Israel's annexation
of the Golan Heights, and withdrawing funding and other support from the Palestinians, the president has abandoned the long-standing
US policy of playing honest broker in the peace process. Trump has also tried to exploit antisemitism for political advantage, accusing
US Democrat Jews who oppose Netanyahu's policies of "disloyalty" to Israel.
"... Instead of submitting a general application, as used to be the case in the past, and have the ability to work with the company to find the role that works best. HR has ruined a lot of good companies and their recruiting processes by going to rigid job descriptions instead of just hiring smart people and letting them work. ..."
The Economic Cycle Research Institute's
(ECRI) Lakshman Achuthan recently sat down with CNBC's
Michael Santoli to discuss the jobs growth downturn. Keep in mind, this conversation was held on
Wednesday, several days before Friday's
disappointing
jobs report.
Achuthan told Santoli there's a "
very clear cyclical downturn
in jobs growth, there's really no debating that, and it looks set to continue
."
Achuthan said January 2019 marked the cyclical peak in jobs growth, has been moving lower ever
since, and the trend is far from over.
Both nonfarm payrolls and the household survey
year-over-year growth are in cyclical downturns,
he said.
While the economic narratives via the mainstream financial press continue to cheerlead that the
consumer will lift all tides thanks to the supposedly strong jobs market, Achuthan believes the
downturn in jobs growth will start to "undermine consumer confidence." And it's the loss in consumer
confidence that could tilt the economy into recession.
He also said when examining cyclically
sensitive sectors of the economy, there are already "questionable jobs numbers," such as a significant
surge in the construction unemployment rate.
Achuthan said nonfarm payroll growth has plunged to a 17-month low, and the household survey is
even weaker. He said the top nonfarm payroll line would be revised down by half a million jobs in the
coming months, which would underline the weakness in employment.
Achuthan emphasized to Santoli that
ECRI's recession call won't be "taken off the table.
We've been talking
about a growth rate cycle slowdown.
We're slow-walking toward -- some recessionary window of vulnerability
-- we're
not there today -- but this piece of the puzzle [jobs growth downturn] is looking a bit wobbly. This is the main message that Wall
Street is missing."
As Wall Street bids stocks to near-record highs on "trade optimism" and the belief that the consumer
will save the day, in large part because of solid jobs growth.
ECRI's Leading Employment
Index, which correctly anticipated this downturn in jobs growth, is at its worst reading since the
Great Recession
.
And Wall Street's bet today is that the Fed can achieve a soft landing –
as in 1995-96 – when it started the rate cut cycle the same month the inflation downturn was signaled
by the U.S. Future Inflation Gauge (USFIG) turning lower.
And now it should become increasingly clear to readers why President Trump has sounded the alarm about the need for 100bps rate
cuts, quantitative easing, and emergency payroll tax cuts - it's because he's been briefed about the economic downturn that has
already started.
I don't agree with him that the Fed can do anything to correct this,
nor do they have an incentive to do so. The Fed is not on the
consumer's side. They will appropriate funds to whoever they want to,
just like 08, and give the middle finger to everyone else.
Job quality is horrible, particularly for US citizen STEM workers.
This has been the case since the downturn that began in the late
1990s. Trump needs to fully cancel the OPT program and almost
eliminate the H-1B program. Major employers don't even bother
considering US citizen STEM talent before they hire foreign
nationals.
Yes, but they don't bother to come out and tell you its a fake ad. One of the tragedies of the online job application process is that it forces a person, with little to no knowledge of a company and its internals, to pick, out of potentially hundreds of roles, which one would be best for them.
Instead of submitting a general application, as used to be the case in the past, and have the ability to work with the company to find the role that works best. HR has ruined a lot of good companies and their recruiting processes by going to rigid job descriptions instead of just hiring smart people and letting them work.
Thomas Piketty's New Book Brings Political Economy Back to Its Sources
In the same way that Capital in the Twenty-First Century transformed the way economists look
at inequality, Piketty's new book Capital and Ideology will transform the way political
scientists look at their own field.
By Branko Milanovic
Thomas Piketty's books are always monumental. Some are more monumental than others. His
Top Incomes in France in the Twentieth Century: Inequality and Redistribution,
1901–1998 (published in French as Les hauts revenus en France au XXe siècle)
covered more than two centuries of income and wealth inequality, in addition to social and
political changes in France. His international bestseller Capital in the Twenty-First Century
(Le capital au XXI siècle) broadened this approach to the most important Western
countries (France, the United States, United Kingdom, and Germany). His new book Capital and
Ideology (to be published in English in March 2020; already published in France as Capital et
idéologie) broadens the scope even further, covering the entire world and presenting a
historical panorama of how ownership of assets (including people) was treated, and justified,
in various historical societies, from China, Japan, and India, to the European-ruled American
colonies, and feudal and capitalist societies in Europe. Just the mention of the geographical
and temporal scope of the book suffices to give the reader an idea of its ambition.
Before I review Capital and Ideology, it is worth mentioning the importance of Piketty's
overall approach, present in all three of his books. His approach is characterized by the
methodological return of economics to its original and key functions: to be a science that
illuminates the interests and explains the behaviors of individuals and social classes in
their quotidian (material) life. This methodology rejects the dominant paradigm of the past
half-century, which increasingly ignored the role of classes and heterogeneous individuals in
the process of production and instead treated all people as abstract agents that maximize
their own income under certain constraints. The dominant paradigm has emptied almost all
social content from economics and presented a view of society that was as abstract as it was
false.
The reintroduction of actual life into economics by Piketty and several other economists
(not entirely coincidentally, most of them are economists interested in inequality) is much
more than just a return to the sources of political economy and economics. This is because
today, we have vastly more information (data) than was available to economists a century ago,
not only about our own contemporary societies but also about past societies. This combination
between political economy's original methodology and big data is what I call "turbo-Annales,"
after the French group of historians that pioneered the view of history as a social science
focusing on the broad social, economic, and political forces that shape the world. The topics
that interested classical political economy and the authors associated with the Annales
School can now be studied empirically, and even econometrically and experimentally -- things
which they could not do, both because of the scarcity of data and unavailability of modern
methodologies.
It is within this context that, I believe, we ought to consider Piketty's Capital and
Ideology. How successful was his approach, applied now to the world and over a very long
time-horizon?
"The dominant paradigm has emptied almost all social content from economics and presented
a view of society that was as abstract as it was false."
For the purposes of this review, I divide Piketty's book into two parts: the first, which
I already mentioned, looks at ideological justifications of inequality across different
societies (Parts 1 and 2 of the book, and to some extent Part 3); the second introduces an
entirely new way of studying recent political cleavages in modern societies (Part 4). I am
somewhat skeptical about Piketty's success in the first part, despite his enormous erudition
and his skills as a raconteur, because success in discussing something so geographically and
temporally immense is difficult to reach, even by the best-informed minds who have studied
different societies for the majority of their careers. Analyzing each of these societies
requires an extraordinarily high degree of sophisticated historical knowledge regarding
religious dogmas, political organization, social stratification, and the like. To take two
examples of authors who have tried to do it, one older and one more recent: Max Weber, during
his entire life (and more specifically in Economy and Society), and Francis Fukuyama in his
two-volume masterpiece on the origins of the political and economic order. In both cases, the
results were not always unanimously approved by specialists studying individual societies and
religions.
In his analysis of some of these societies, Piketty had to rely on somewhat
"straightforward" or simplified discussions of their structure and evolution, discussions
which at times seem plausible but superficial. In other words, each of these historical
societies, many of which lasted centuries, had gone through different phases in their
developments, phases which are subject to various interpretations. Treating such evolutions
as if they were a simple, uncontested story is reductionist. It is a choice of one plausible
historical narrative where many exist. This compares unfavorably with Piketty's own rich and
nuanced narrative in Top Incomes in France in the Twentieth Century.
While I am somewhat skeptical about that first part of the book, I am not skeptical about
the second. In this part, we find the Piketty who plays to his strength: bold and innovative
use of data which produces a new way of looking at phenomena that we all observe but were
unable to define so precisely. Here, Piketty is "playing" on the familiar Western economic
history "terrain" that he knows well, probably better than any other economist.
This part of the book looks empirically at the reasons that left-wing, or social
democratic parties have gradually transformed themselves from being the parties of the
less-educated and poorer classes to become the parties of the educated and affluent middle
and upper-middle classes. To a large extent, traditionally left parties have changed because
their original social-democratic agenda was so successful in opening up education and
high-income possibilities to the people who in the 1950s and 1960s came from modest
backgrounds. These people, the "winners" of social democracy, continued voting for left-wing
parties but their interests and worldview were no longer the same as that of their
(less-educated) parents. The parties' internal social structure thus changed -- the product
of their own political and social success. In Piketty's terms, they became the parties of the
"Brahmin left" (La gauche Brahmane), as opposed to the conservative right-wing parties, which
remained the parties of the "merchant right" (La droite marchande).
To simplify, the elite became divided between the educated "Brahmins" and the more
commercially-minded "investors," or capitalists. This development, however, left the people
who failed to experience upward educational and income mobility unrepresented, and those
people are the ones that feed the current "populist" wave. Quite extraordinarily, Piketty
shows the education and income shifts of left-wing parties' voters using very similar
long-term data from all major developed democracies (and India). The fact that the story is
so consistent across countries lends an almost uncanny plausibility to his hypothesis.
It is also striking, at least to me, that such multi-year, multi-country data were
apparently never used by political scientists to study this phenomenon. This part of
Piketty's book will likely transform, or at least affect, how political scientists look at
new political realignments and class politics in advanced democracies in the years to come.
In the same way that Capital in the Twenty-First Century has transformed how economists look
at inequality, Capital and Ideology will transform the way political scientists look at their
own field.
Branko Milanovic is a senior scholar at the Stone Center on Socio-Economic Inequality at the
Graduate Center, City University of New York.
Neoliberalism explicitly denies the value of compassion. It considers "wolf eats wolf" type
of competition as the key component of human society that the moral value in itself.
One of the crucial lessons we often fail to impart to our children is that life is not a
zero-sum game; that is, the success of another child is not a corresponding failure for me.
Children ought to learn how to help one another so they can take joy in crossing the finish
line together, building closeness instead of separation, segregation and adversarialism.
And the incessant use of digital media often exacerbates this development.
In a society where we are rewarded for thinking about ourselves first, we disconnect from
one another. Just go to the mall and look for shopping carts and trash strewn across the
parking lot, oversized trucks and SUVs parked across multiple parking spots, non-handicap
vehicles in handicap spots and cars parked in dedicated motorcycle spaces. No consideration for
others.
Gone are the days of compassionate conservatism. "America first" finds a ready breeding
ground in this "me first" mentality. It is finally time to catch up for those left behind by
social progress made in the name of equality. After all, they too are better than others,
better than those abroad and better than those from abroad. The new aMEricaFIRST echoes that
sentiment, segregates American society and separates us from friends and allies around the
world.
How can we get our compassion back? How can we reconnect with each other and engage with the
world? At the personal level, take small steps and start a conversation with someone different
from you, expose yourself to the diversity that makes this country so unique–and involve
your children in that exposure to pluralism, normalizing it, modeling it. Put yourself in the
shoes of someone less fortunate and find the "things that unite."
At the social level, we – including our children – must recognize that the
rights and freedoms we cherish and enjoy also come with responsibilities. Success in America
has focused on maximizing individual freedoms limited only when their exercise encroaches on
the freedoms of others. Today, we need to reconnect and rebuild our communities by focusing on
the needs of others. To achieve this, let's reconsider the idea of mandatory public service:
citizens serving others in need. A public service requirement between the end of high school
and the beginning of college – fulfilled in many ways, including such service
opportunities as AmeriCorps, the Peace Corps, Meals on Wheels or other freely helpful
initiatives – brings those in service in contact with those from whom they have been
disconnected, both at home and abroad. Only through connection will we regain compassion and
only then will we be able to make America great again. More articles by: Volker Franke
As for the gory details of CIA involvement in the Chilean coup d'état of 1973,
Costa-Gavras' film "Missing" (Universal Pictures, 1982) staring Jack Lemmon and Sissy Spacek
exposes the surreptitious U.S. involvement via CIA operatives, supportive of Pinochet's
cold-bloodied massacre of students and other innocent bystanders. Not surprisingly, the film
was removed from the U.S. market following a lawsuit against the director and Universal
Pictures by former ambassador Nathaniel Davis for defamation of character. When Davis lost his
lawsuit, the film was re-released by Universal in 2006.
The face of neoliberalism in Chile today is disheartened, reflecting deep losses for the
wealthy class as the people of the country reject Milton Friedman's neoliberal policies,
including clever tax evasion techniques by the business class. Could this be the start of a
worldwide movement against neoliberalism?
After all, Chile is the country that neoliberal advocates crowned their "newborn" in the
battle against big government, "get government off our backs," according to Milton Friedman
(and, Reagan picked up on the adage.) But, au contraire, according to the film "Missing,"
fascism took control over Chile. Is it possible that Friedman and Kissinger secretly cherished
a fascist empire, where control would be complete, disguised as "the land of individual
economic freedom?" Whatever their motives, that's what they got, and they never hesitated to
revere Chile's remarkable economic achievements, fascism and all, which is powerfully expressed
in the film "Missing," from end to end the heavy hand of fascism is ever-present.
Today is a new day as the people of Chile abandon decades of rotting neoliberal policies.
They've had enough of Milton Freidman. The people have decided that the "state" is a beneficial
partner for achievement of life's dreams. The "state" is not the menacing force of evil
preached by Margaret Thatcher and Ronald Reagan.
The people of Chile are embracing an anti-neoliberalistic nation/state for the first time in
over four decades. Will the world follow in their footsteps similar to the world adopting the
principles of the "Miracle of Chile" these past four decades?
As for the new way forward, it's all about student debt. Yes, student debt was the catalyst
behind Chile's repudiation of neoliberalism. In 2011 students in Chile made headlines by
launching nationwide strikes over high tuition costs that drove their families into debt (sound
familiar?) The strike lasted for eight months.
Over time, the student marches gained recognition by other like-minded organizations like
trade unions and protests of environmental degradation. According to Tasha Fairfield, an
assistant professor for the London School of Economics' Department of International
Development, the strikes were pivotal: "The student movement played a critical role in creating
political space," according to Fairfield, it "dramatically changed the political context in
Chile and helped to place the issues of Chile's extreme inequalities centrally on the national
agenda," Sebastian Rosemont, Chilean Activists Change the Rules of the Game, Foreign Policy In
Focus, Dec. 2, 2014.
Subsequently, the national election of 2013 swept the left wing into power with a huge wave
of public support, gaining strong majorities in both houses of the National Congress as well as
electing Michelle Bachelet president. The big leftward sweep came as over two thirds of the
population grew to support student demands for free university tuition.
Ever since the 2013 election, neoliberal policies have crumbled like a decrepit equestrian
statue of Pinochet, who carried the stigma of brutal criminality to, and beyond, the grave.
In stark contrast to 40 years ago, today, when students, armed with only stones clashed with
police equipped with full regalia of riot gear, tear gas, and armored vehicles, the harsh
police activity drew heavy international criticism. That, combined with more than two-thirds of
the population in support of the student movement, led to a new politics, Nueva Mayoria (New
Majority), a center-left coalition made up of Bachelet's Socialist Party, the Christian
Democratic Party, and the Party for Democracy.
Whereupon, Nueva Mayoria, turning up its nose to neoliberalism, raised corporate taxes from
20 percent to 25 percent and closed tax loopholes for companies and wealthy business owners.
Those changes added $8.3 billion annually to government coffers, thus, serving as a source of
funds to provide free education to all Chileans by 2020, as well as improved health care, and
including a roll back of the for-profit schools that emerged under Pinochet's dictatorship,
which is another neoliberal fascination, witness the U.S. for-profit schools listed on the New
York Stock Exchange honestly, what's with that? In order to achieve success, the new Chilean
politics astutely employed a key tactical move by applying the corporate tax hikes to only the
largest corporations. As a result, nearly 95% of businesses are not be affected by higher
taxation. This, in fact, served to secure a broad base of support for the new politics by
having those who can afford to pay Pay.
Along those same lines, the new government removed a tax dodge employed by large business
owners that allowed them to mostly escape taxes on $270 billion of profits (similar to the U.S.
15% "carried interest" for private equity entities, e.g., Mitt Romney's 15% tax rate).
Thus, it's little wonder that public backlash is challenging neoliberalism, especially
considering the conditions throughout the Pinochet regime, as described in the meticulously
structured documentary film, "The Pinochet Case," (Icarus Films, 2002), which opens with scenes
of ordinary Chileans scouring the desert for the remains of family members who were tortured
and killed decades previous.
Chile, "The Babe of Neoliberalism," came to life as an experiment for the "Chicago School"
of economic thought. It worked. Today neoliberal theory rules the world, laissez-faire
capitalism as practiced from China to the United States, privatization, open markets, slash
government, and deregulation, in short, "whatever works best for profits works best for
society." But, does it?
Forty years of neoliberal thought and practice has changed the world's socio-economic
landscape, but it only really, truly works for the same class of people today as it did 800
years ago for the nobility of the Middle Ages.
Robert Hunziker lives in Los Angeles and can be reached at [email protected] .
Not so fast. The West still has the technological edge. And huge ultural influence. Most
probably those will be two separate events, if they happen at all.
The Russia question is a very interesting and useful way to approach the much larger
question which is how to manage the "end of Western hegemony".
Mackinder, Brzezinski and other geo-strategic thinkers have long posited that in order to
control the world, one much control Eurasia.
The alliance between China and Russia, by definition, secures their dominance of Eurasia.
Even forty years of U.S. trouble-making in Afghanistan, the geographic heart of Eurasia, has
only proved to be an annoyance slowing the inevitable partnership of China and Russia, and
the growing courtship of India. Recent U.S. interference in the Ukraine was a desperate,
rather ham-handed attempt to deny Russia access to its historic, and only warm water, port in
Crimea (and interfere with Russian gas pipelines to Europe). The Ukrainians seem to be now
coming back to their senses a bit.
[ I may add a comment elucidating some of the long history of Western elite (primarily
British, then U.S.) interference in the affairs of both Russia and China, but most CN readers
should already be aware of the highlights.]
The EU and the euro, both created to prolong the dominance of the U.S., are now clearly
faltering. The EU created a common market and allowed for the expansion of NATO eastward
after the breakup of the Soviet Union and Russia's loss of the Warsaw Pact countries. The
euro, directly tied to the U.S. PetroDollar at its creation, facilitated the greater transfer
of U.S. debt instruments into the European banks, giving the debt addicted U.S. economy more
capacity to expand its financial bubble and extend the era of U.S. dominance. The European
central banks are now at their breaking point.
Thus, the era of U.S. PetroDollar supremacy, and with it U.S. dominance, is now coming to
an end and the scramble for places in the new global system is heating up. The Greeks,
Italians, Germans and Dutch have already signed deals with the Chinese, will the French be
far behind?
Russia, the ambitious junior partner to China, can be seen to be both a cultural and
geographic buffer between the Chinese juggernaut and Western Europe. The Russians have energy
and consumer markets that the Western Europeans need access to if they are going to maintain
any semblance of their present standard of living as U.S. economic dominance recedes. The
nuclear armed U.S. presence on the continent keeps the Europeans cautious; as does their very
precarious debt co-dependency with Wall Street, the Federal Reserve Bank and the U.S.
Treasury.
The northern Europeans don't want to freeze or go broke, so Nord Stream 2 will go ahead.
Trump is truly delusional if he thinks he can keep that from happening. Trump's trade war has
only accelerated the Chinese shift away from the U.S. and toward its well-planned future in
Asia, Europe, Africa and South America. China and Russia are both stockpiling gold in
anticipation of rolling out a new global monetary system to replace the failing U.S.
PetroDollar and SWIFT.
Clowns should be increasingly used in redundancy (layoff, firing) meetings until it
becomes the norm and employers start to compete with each other to offer the best clown
redundancy experience and promote it as a benefit.
It would also create clown jobs, which would probably require more clown schools, meaning
that the tuition prices would go through the roof and young people dreaming of becoming
redundancy clowns would either have to come from wealth or take out massive clown loans to
fund their education for clown universities and grad schools. Shareholders can only take so
much top line costs and Wall Street pressure would force corporations to improve return on
investment and reduce redundancy clown labor expenses. Sadly, redundancy clowns would find
themselves training their own replacements – HB1 clowns from "low cost" countries.
Employers would respond to quality criticisms of the HB1 clown experience by publishing
survey results showing very similar almost ex-employee satisfaction with the new clowns.
Eventually, of course, redundancy clowns will be replaced by AI and robots. It's just the
future and we will need to think about how to adapt to it today by putting in place a UBI for
the inevitable redundant redundancy clowns.
The Pope didn't seem too put out when faced with a long list of accusations against him from
American Catholics as he was flying from Rome to Mozambique. He said he was honored to be
attacked by them.
The book 'How America Wanted to Change the Pope' explores the supposed efforts of the
conservative Catholic opposition in the US to launch a "coup d'état" against Francis.
A copy was given to the pontiff by the author Nicolas Seneze, a journalist from France's
Catholic newspaper La Croix, who was on board the papal plane Wednesday.
"For me it is an honor that Americans attack me," the pope quipped as he received the
book, which he had apparently heard about and wanted to procure.He joked that the book about
his critics "will be a bombshell."
But Vatican spokesperson Matteo Bruni attempted to deflate tensions, clarifying that the
comments were made informally. He said Francis "always considers it an honor to be
criticized," especially when it comes from "authoritative voices" or, as in this case, "an
important nation."
The "japanification" of America begins. I've stated in this blog more than once that, if
the USA falls, it certainly won't fall like the USSR. The USSR had a very peculiar economic
system, where the PCSU was both the government and the economy: once Gorbachev destroyed his
party, he destroyed the Soviet Union.
The USA, on the other side, is a capitalist economy, which means its "center of command"
is a diffuse web of oligarchic capitalists who govern "in the shadows".
The government of a capitalist society is only one of the many institutions that, in a
diffused fashion, preserves the "market anarchy" (domesticated chaos) that is indispensable
for the existence of capitalism.
America, therefore, is more lika an onion than a jenga tower: if you destroy (peel) one
layer, you still have many more.
Therefore, if the USA collapses, it will probably do so through a gradual descent into
fragmentation and anarchy in a process that will take decades and maybe centuries, in an
analogous form as the Roman Empire in the West.
... ... ...
Today, Sept. 11, is a date that marks two ends:
1) the end of any pretenstions left of a socialist wave in Latin America after the first
one -- Cuba, 1959 -- was successful (so far, the first and only). The CIA masterfully learned
from its mistakes in the island nation and successfully (and brutally) crushed Latin American
socialism;
2) the beginning of the end of the "End of History" era. After the WTC fell, the USA would
begin the invasions of Afghanistan and Iraq, in what would be the last time the USA acted as
the "king of Nations".
What should've been -- after a wonderful victory in Iraq -- turned out to be a Pyrric
endeavor, as Iran successfully resisted, the rest of the ME didn't budge, and the whole thing
turned into a trillionaire black hole that drained the American coffers, spiked its debt
rates and culminated with the 2008 crisis.
This is a Marxist critique of neoliberalism. Not necessary right but they his some relevant
points.
Notable quotes:
"... The ideology of neoliberal capitalism was the promise of growth. But with neoliberal capitalism reaching a dead end, this promise disappears and so does this ideological prop. ..."
"... The ex ante tendency toward overproduction arises because the vector of real wages across countries does not increase noticeably over time in the world economy, while the vector of labor productivities does, typically resulting in a rise in the share of surplus in world output. ..."
"... While the rise in the vector of labor productivities across countries, a ubiquitous phenomenon under capitalism that also characterizes neoliberal capitalism, scarcely requires an explanation, why does the vector of real wages remain virtually stagnant in the world economy? The answer lies in the sui generis character of contemporary globalization that, for the first time in the history of capitalism, has led to a relocation of activity from the metropolis to third world countries in order to take advantage of the lower wages prevailing in the latter and meet global demand. ..."
"... The current globalization broke with this. The movement of capital from the metropolis to the third world, especially to East, South, and Southeast Asia to relocate plants there and take advantage of their lower wages for meeting global demand, has led to a desegmentation of the world economy, subjecting metropolitan wages to the restraining effect exercised by the third world's labor reserves. Not surprisingly, as Joseph Stiglitz has pointed out, the real-wage rate of an average male U.S. worker in 2011 was no higher -- indeed, it was marginally lower -- than it had been in 1968. 5 ..."
"... This ever-present opposition becomes decisive within a regime of globalization. As long as finance capital remains national -- that is, nation-based -- and the state is a nation-state, the latter can override this opposition under certain circumstances, such as in the post-Second World War period when capitalism was facing an existential crisis. But when finance capital is globalized, meaning, when it is free to move across country borders while the state remains a nation-state, its opposition to fiscal deficits becomes decisive. If the state does run large fiscal deficits against its wishes, then it would simply leave that country en masse , causing a financial crisis. ..."
"... The state therefore capitulates to the demands of globalized finance capital and eschews direct fiscal intervention for increasing demand. It resorts to monetary policy instead since that operates through wealth holders' decisions, and hence does not undermine their social position. But, precisely for this reason, monetary policy is an ineffective instrument, as was evident in the United States in the aftermath of the 2007–09 crisis when even the pushing of interest rates down to zero scarcely revived activity. 6 ..."
"... If Trump's protectionism, which recalls the Smoot-Hawley tariff of 1931 and amounts to a beggar-my-neighbor policy, does lead to a significant export of unemployment from the United States, then it will invite retaliation and trigger a trade war that will only worsen the crisis for the world economy as a whole by dampening global investment. Indeed, since the United States has been targeting China in particular, some retaliatory measures have already appeared. But if U.S. protectionism does not invite generalized retaliation, it would only be because the export of unemployment from the United States is insubstantial, keeping unemployment everywhere, including in the United States, as precarious as it is now. However we look at it, the world would henceforth face higher levels of unemployment. ..."
"... The second implication of this dead end is that the era of export-led growth is by and large over for third world economies. The slowing down of world economic growth, together with protectionism in the United States against successful third world exporters, which could even spread to other metropolitan economies, suggests that the strategy of relying on the world market to generate domestic growth has run out of steam. Third world economies, including the ones that have been very successful at exporting, would now have to rely much more on their home market ..."
"... In other words, we shall now have an intensification of the imperialist stranglehold over third world economies, especially those pushed into unsustainable balance-of-payments deficits in the new situation. By imperialism , here we do not mean the imperialism of this or that major power, but the imperialism of international finance capital, with which even domestic big bourgeoisies are integrated, directed against their own working people ..."
"... In short, the ideology of neoliberal capitalism was the promise of growth. But with neoliberal capitalism reaching a dead end, this promise disappears and so does this ideological prop. To sustain itself, neoliberal capitalism starts looking for some other ideological prop and finds fascism. ..."
"... The first is the so-called spontaneous method of capital flight. Any political formation that seeks to take the country out of the neoliberal regime will witness capital flight even before it has been elected to office, bringing the country to a financial crisis and thereby denting its electoral prospects. And if perchance it still gets elected, the outflow will only increase, even before it assumes office. The inevitable difficulties faced by the people may well make the government back down at that stage. The sheer difficulty of transition away from a neoliberal regime could be enough to bring even a government based on the support of workers and peasants to its knees, precisely to save them short-term distress or to avoid losing their support. ..."
"... The third weapon consists in carrying out so-called democratic or parliamentary coups of the sort that Latin America has been experiencing. Coups in the old days were effected through the local armed forces and necessarily meant the imposition of military dictatorships in lieu of civilian, democratically elected governments. Now, taking advantage of the disaffection generated within countries by the hardships caused by capital flight and imposed sanctions, imperialism promotes coups through fascist or fascist-sympathizing middle-class political elements in the name of restoring democracy, which is synonymous with the pursuit of neoliberalism. ..."
"... And if all these measures fail, there is always the possibility of resorting to economic warfare (such as destroying Venezuela's electricity supply), and eventually to military warfare. Venezuela today provides a classic example of what imperialist intervention in a third world country is going to look like in the era of decline of neoliberal capitalism, when revolts are going to characterize such countries more and more. ..."
"... Despite this opposition, neoliberal capitalism cannot ward off the challenge it is facing for long. It has no vision for reinventing itself. Interestingly, in the period after the First World War, when capitalism was on the verge of sinking into a crisis, the idea of state intervention as a way of its revival had already been mooted, though its coming into vogue only occurred at the end of the Second World War. 11 Today, neoliberal capitalism does not even have an idea of how it can recover and revitalize itself. And weapons like domestic fascism in the third world and direct imperialist intervention cannot for long save it from the anger of the masses that is building up against it. ..."
The ideology of neoliberal capitalism was the promise of growth.
But with neoliberal capitalism reaching a dead end, this promise disappears and so does this
ideological prop.
Harry Magdoff's The Age of
Imperialism is a classic work that shows how postwar political decolonization does not
negate the phenomenon of imperialism. The book has two distinct aspects. On the one hand, it
follows in V. I. Lenin's footsteps in providing a comprehensive account of how capitalism at
the time operated globally. On the other hand, it raises a question that is less frequently
discussed in Marxist literature -- namely, the need for imperialism. Here, Magdoff not only
highlighted the crucial importance, among other things, of the third world's raw materials for
metropolitan capital, but also refuted the argument that the declining share of raw-material
value in gross manufacturing output somehow reduced this importance, making the simple point
that there can be no manufacturing at all without raw materials. 1
Magdoff's focus was on a period when imperialism was severely resisting economic
decolonization in the third world, with newly independent third world countries taking control
over their own resources. He highlighted the entire armory of weapons used by imperialism. But
he was writing in a period that predated the onset of neoliberalism. Today, we not only have
decades of neoliberalism behind us, but the neoliberal regime itself has reached a dead end.
Contemporary imperialism has to be discussed within this setting.
Globalization and
Economic Crisis
There are two reasons why the regime of neoliberal globalization has run into a dead end.
The first is an ex ante tendency toward global overproduction; the second is that the
only possible counter to this tendency within the regime is the formation of asset-price
bubbles, which cannot be conjured up at will and whose collapse, if they do appear, plunges the
economy back into crisis. In short, to use the words of British economic historian Samuel
Berrick Saul, there are no "markets on tap" for contemporary metropolitan capitalism, such as
had been provided by colonialism prior to the First World War and by state expenditure in the
post-Second World War period of dirigisme . 2
The ex ante tendency toward overproduction arises because the vector of real wages
across countries does not increase noticeably over time in the world economy, while the vector
of labor productivities does, typically resulting in a rise in the share of surplus in world
output. As Paul Baran and Paul Sweezy argued in Monopoly Capital , following the lead of
Michał Kalecki and Josef Steindl, such a rise in the share of economic surplus, or a shift
from wages to surplus, has the effect of reducing aggregate demand since the ratio of
consumption to income is higher on average for wage earners than for those living off the
surplus. 3
Therefore, assuming a given level of investment associated with any period, such a shift would
tend to reduce consumption demand and hence aggregate demand, output, and capacity utilization.
In turn, reduced capacity utilization would lower investment over time, further aggravating the
demand-reducing effect arising from the consumption side.
While the rise in the vector of labor productivities across countries, a ubiquitous
phenomenon under capitalism that also characterizes neoliberal capitalism, scarcely requires an
explanation, why does the vector of real wages remain virtually stagnant in the world economy?
The answer lies in the sui generis character of contemporary globalization that, for the
first time in the history of capitalism, has led to a relocation of activity from the
metropolis to third world countries in order to take advantage of the lower wages prevailing in
the latter and meet global demand.
Historically, while labor has not been, and is still not, free to migrate from the third
world to the metropolis, capital, though juridically free to move from the latter to the
former, did not actually do so , except to sectors like mines and plantations, which
only strengthened, rather than broke, the colonial pattern of the international division of
labor. 4
This segmentation of the world economy meant that wages in the metropolis increased with labor
productivity, unrestrained by the vast labor reserves of the third world, which themselves had
been caused by the displacement of manufactures through the twin processes of
deindustrialization (competition from metropolitan goods) and the drain of surplus (the
siphoning off of a large part of the economic surplus, through taxes on peasants that are no
longer spent on local artisan products but finance gratis primary commodity exports to
the metropolis instead).
The current globalization broke with this. The movement of capital from the metropolis to
the third world, especially to East, South, and Southeast Asia to relocate plants there and
take advantage of their lower wages for meeting global demand, has led to a desegmentation of
the world economy, subjecting metropolitan wages to the restraining effect exercised by the
third world's labor reserves. Not surprisingly, as Joseph Stiglitz has pointed out, the
real-wage rate of an average male U.S. worker in 2011 was no higher -- indeed, it was
marginally lower -- than it had been in 1968. 5
At the same time, such relocation of activities, despite causing impressive growth rates of
gross domestic product (GDP) in many third world countries, does not lead to the exhaustion of
the third world's labor reserves. This is because of another feature of contemporary
globalization: the unleashing of a process of primitive accumulation of capital against petty
producers, including peasant agriculturists in the third world, who had earlier been protected,
to an extent, from the encroachment of big capital (both domestic and foreign) by the
postcolonial dirigiste regimes in these countries. Under neoliberalism, such protection
is withdrawn, causing an income squeeze on these producers and often their outright
dispossession from their land, which is then used by big capital for its various so-called
development projects. The increase in employment, even in countries with impressive GDP growth
rates in the third world, falls way short of the natural growth of the workforce, let alone
absorbing the additional job seekers coming from the ranks of displaced petty producers. The
labor reserves therefore never get used up. Indeed, on the contrary, they are augmented
further, because real wages continue to remain tied to a subsistence level, even as
metropolitan wages too are restrained. The vector of real wages in the world economy as a whole
therefore remains restrained.
Although contemporary globalization thus gives rise to an ex ante tendency toward
overproduction, state expenditure that could provide a counter to this (and had provided a
counter through military spending in the United States, according to Baran and Sweezy) can no
longer do so under the current regime. Finance is usually opposed to direct state intervention
through larger spending as a way of increasing employment. This opposition expresses itself
through an opposition not just to larger taxes on capitalists, but also to a larger fiscal
deficit for financing such spending. Obviously, if larger state spending is financed by taxes
on workers, then it hardly adds to aggregate demand, for workers spend the bulk of their
incomes anyway, so the state taking this income and spending it instead does not add any extra
demand. Hence, larger state spending can increase employment only if it is financed either
through a fiscal deficit or through taxes on capitalists who keep a part of their income
unspent or saved. But these are precisely the two modes of financing state expenditure that
finance capital opposes.
Its opposing larger taxes on capitalists is understandable, but why is it so opposed to a
larger fiscal deficit? Even within a capitalist economy, there are no sound economic
theoretical reasons that should preclude a fiscal deficit under all circumstances. The root of
the opposition therefore lies in deeper social considerations: if the capitalist economic
system becomes dependent on the state to promote employment directly , then this fact
undermines the social legitimacy of capitalism. The need for the state to boost the animal
spirits of the capitalists disappears and a perspective on the system that is epistemically
exterior to it is provided to the people, making it possible for them to ask: If the state can
do the job of providing employment, then why do we need the capitalists at all? It is an
instinctive appreciation of this potential danger that underlies the opposition of capital,
especially of finance, to any direct effort by the state to generate employment.
This ever-present opposition becomes decisive within a regime of globalization. As long as
finance capital remains national -- that is, nation-based -- and the state is a nation-state,
the latter can override this opposition under certain circumstances, such as in the post-Second
World War period when capitalism was facing an existential crisis. But when finance capital is
globalized, meaning, when it is free to move across country borders while the state remains a
nation-state, its opposition to fiscal deficits becomes decisive. If the state does run large
fiscal deficits against its wishes, then it would simply leave that country en masse ,
causing a financial crisis.
The state therefore capitulates to the demands of globalized finance capital and eschews
direct fiscal intervention for increasing demand. It resorts to monetary policy instead since
that operates through wealth holders' decisions, and hence does not undermine their
social position. But, precisely for this reason, monetary policy is an ineffective instrument,
as was evident in the United States in the aftermath of the 2007–09 crisis when even the
pushing of interest rates down to zero scarcely revived activity. 6
It may be thought that this compulsion on the part of the state to accede to the demand of
finance to eschew fiscal intervention for enlarging employment should not hold for the United
States. Its currency being considered by the world's wealth holders to be "as good as gold"
should make it immune to capital flight. But there is an additional factor operating in the
case of the United States: that the demand generated by a bigger U.S. fiscal deficit would
substantially leak abroad in a neoliberal setting, which would increase its external debt
(since, unlike Britain in its heyday, it does not have access to any unrequited colonial
transfers) for the sake of generating employment elsewhere. This fact deters any fiscal effort
even in the United States to boost demand within a neoliberal setting. 7
Therefore, it follows that state spending cannot provide a counter to the ex ante
tendency toward global overproduction within a regime of neoliberal globalization, which makes
the world economy precariously dependent on occasional asset-price bubbles, primarily in the
U.S. economy, for obtaining, at best, some temporary relief from the crisis. It is this fact
that underlies the dead end that neoliberal capitalism has reached. Indeed, Donald Trump's
resort to protectionism in the United States to alleviate unemployment is a clear recognition
of the system having reached this cul-de-sac. The fact that the mightiest capitalist
economy in the world has to move away from the rules of the neoliberal game in an attempt to
alleviate its crisis of unemployment/underemployment -- while compensating capitalists
adversely affected by this move through tax cuts, as well as carefully ensuring that no
restraints are imposed on free cross-border financial flows -- shows that these rules
are no longer viable in their pristine form.
Some Implications of This Dead End
There are at least four important implications of this dead end of neoliberalism. The first
is that the world economy will now be afflicted by much higher levels of unemployment than it
was in the last decade of the twentieth century and the early years of the twenty-first, when
the dot-com and the housing bubbles in the United States had, sequentially, a pronounced
impact. It is true that the U.S. unemployment rate today appears to be at a historic low, but
this is misleading: the labor-force participation rate in the United States today is lower than
it was in 2008, which reflects the discouraged-worker effect . Adjusting for this lower
participation, the U.S. unemployment rate is considerable -- around 8 percent. Indeed, Trump
would not be imposing protection in the United States if unemployment was actually as low as 4
percent, which is the official figure. Elsewhere in the world, of course, unemployment
post-2008 continues to be evidently higher than before. Indeed, the severity of the current
problem of below-full-employment production in the U.S. economy is best illustrated by capacity
utilization figures in manufacturing. The weakness of the U.S. recovery from the Great
Recession is indicated by the fact that the current extended recovery represents the first
decade in the entire post-Second World War period in which capacity utilization in
manufacturing has never risen as high as 80 percent in a single quarter, with the resulting
stagnation of investment. 8
If Trump's protectionism, which recalls the Smoot-Hawley tariff of 1931 and amounts to a
beggar-my-neighbor policy, does lead to a significant export of unemployment from the
United States, then it will invite retaliation and trigger a trade war that will only worsen
the crisis for the world economy as a whole by dampening global investment. Indeed, since the
United States has been targeting China in particular, some retaliatory measures have already
appeared. But if U.S. protectionism does not invite generalized retaliation, it would only be
because the export of unemployment from the United States is insubstantial, keeping
unemployment everywhere, including in the United States, as precarious as it is now. However we
look at it, the world would henceforth face higher levels of unemployment.
There has been some discussion on how global value chains would be affected by Trump's
protectionism. But the fact that global macroeconomics in the early twenty-first century will
look altogether different compared to earlier has not been much discussed.
In light of the preceding discussion, one could say that if, instead of individual
nation-states whose writ cannot possibly run against globalized finance capital, there was a
global state or a set of major nation-states acting in unison to override the objections of
globalized finance and provide a coordinated fiscal stimulus to the world economy, then perhaps
there could be recovery. Such a coordinated fiscal stimulus was suggested by a group of German
trade unionists, as well as by John Maynard Keynes during the Great Depression in the 1930s.
9
While it was turned down then, in the present context it has not even been discussed.
The second implication of this dead end is that the era of export-led growth is by and large
over for third world economies. The slowing down of world economic growth, together with
protectionism in the United States against successful third world exporters, which could even
spread to other metropolitan economies, suggests that the strategy of relying on the world
market to generate domestic growth has run out of steam. Third world economies, including the
ones that have been very successful at exporting, would now have to rely much more on their
home market.
Such a transition will not be easy; it will require promoting domestic peasant agriculture,
defending petty production, moving toward cooperative forms of production, and ensuring greater
equality in income distribution, all of which need major structural shifts. For smaller
economies, it would also require their coming together with other economies to provide a
minimum size to the domestic market. In short, the dead end of neoliberalism also means the
need for a shift away from the so-called neoliberal development strategy that has held sway
until now.
The third implication is the imminent engulfing of a whole range of third world economies in
serious balance-of-payments difficulties. This is because, while their exports will be sluggish
in the new situation, this very fact will also discourage financial inflows into their
economies, whose easy availability had enabled them to maintain current account deficits on
their balance of payments earlier. In such a situation, within the existing neoliberal
paradigm, they would be forced to adopt austerity measures that would impose income deflation
on their people, make the conditions of their people significantly worse, lead to a further
handing over of their national assets and resources to international capital, and prevent
precisely any possible transition to an alternative strategy of home market-based growth.
In other words, we shall now have an intensification of the imperialist stranglehold over
third world economies, especially those pushed into unsustainable balance-of-payments deficits
in the new situation. By imperialism , here we do not mean the imperialism of this or
that major power, but the imperialism of international finance capital, with which even
domestic big bourgeoisies are integrated, directed against their own working people.
The fourth implication is the worldwide upsurge of fascism. Neoliberal capitalism even
before it reached a dead end, even in the period when it achieved reasonable growth and
employment rates, had pushed the world into greater hunger and poverty. For instance, the world
per-capita cereal output was 355 kilograms for 1980 (triennium average for 1979–81
divided by mid–triennium population) and fell to 343 in 2000, leveling at 344.9 in 2016
-- and a substantial amount of this last figure went into ethanol production. Clearly, in a
period of growth of the world economy, per-capita cereal absorption should be expanding,
especially since we are talking here not just of direct absorption but of direct and indirect
absorption, the latter through processed foods and feed grains in animal products. The fact
that there was an absolute decline in per-capita output, which no doubt caused a decline in
per-capita absorption, suggests an absolute worsening in the nutritional level of a substantial
segment of the world's population.
But this growing hunger and nutritional poverty did not immediately arouse any significant
resistance, both because such resistance itself becomes more difficult under neoliberalism
(since the very globalization of capital makes it an elusive target) and also because higher
GDP growth rates provided a hope that distress might be overcome in the course of time.
Peasants in distress, for instance, entertained the hope that their children would live better
in the years to come if given a modicum of education and accepted their fate.
In short, the ideology of neoliberal capitalism was the promise of growth. But with
neoliberal capitalism reaching a dead end, this promise disappears and so does this ideological
prop. To sustain itself, neoliberal capitalism starts looking for some other ideological prop
and finds fascism. This changes the discourse away from the material conditions of people's
lives to the so-called threat to the nation, placing the blame for people's distress not on the
failure of the system, but on ethnic, linguistic, and religious minority groups, the
other that is portrayed as an enemy. It projects a so-called messiah whose sheer
muscularity can somehow magically overcome all problems; it promotes a culture of unreason so
that both the vilification of the other and the magical powers of the supposed leader
can be placed beyond any intellectual questioning; it uses a combination of state repression
and street-level vigilantism by fascist thugs to terrorize opponents; and it forges a close
relationship with big business, or, in Kalecki's words, "a partnership of big business and
fascist upstarts." 10
Fascist groups of one kind or another exist in all modern societies. They move center stage
and even into power only on certain occasions when they get the backing of big business. And
these occasions arise when three conditions are satisfied: when there is an economic crisis so
the system cannot simply go on as before; when the usual liberal establishment is manifestly
incapable of resolving the crisis; and when the left is not strong enough to provide an
alternative to the people in order to move out of the conjuncture.
This last point may appear odd at first, since many see the big bourgeoisie's recourse to
fascism as a counter to the growth of the left's strength in the context of a capitalist
crisis. But when the left poses a serious threat, the response of the big bourgeoisie typically
is to attempt to split it by offering concessions. It uses fascism to prop itself up only when
the left is weakened. Walter Benjamin's remark that "behind every fascism there is a failed
revolution" points in this direction.
Fascism Then and Now
Contemporary fascism, however, differs in crucial respects from its 1930s counterpart, which
is why many are reluctant to call the current phenomenon a fascist upsurge. But historical
parallels, if carefully drawn, can be useful. While in some aforementioned respects
contemporary fascism does resemble the phenomenon of the 1930s, there are serious differences
between the two that must also be noted.
First, we must note that while the current fascist upsurge has put fascist elements in power
in many countries, there are no fascist states of the 1930s kind as of yet. Even if the fascist
elements in power try to push the country toward a fascist state, it is not clear that they
will succeed. There are many reasons for this, but an important one is that fascists in power
today cannot overcome the crisis of neoliberalism, since they accept the regime of
globalization of finance. This includes Trump, despite his protectionism. In the 1930s,
however, this was not the case. The horrors associated with the institution of a fascist state
in the 1930s had been camouflaged to an extent by the ability of the fascists in power to
overcome mass unemployment and end the Depression through larger military spending, financed by
government borrowing. Contemporary fascism, by contrast, lacks the ability to overcome the
opposition of international finance capital to fiscal activism on the part of the government to
generate larger demand, output, and employment, even via military spending.
Such activism, as discussed earlier, required larger government spending financed either
through taxes on capitalists or through a fiscal deficit. Finance capital was opposed to both
of these measures and it being globalized made this opposition decisive . The
decisiveness of this opposition remains even if the government happens to be one composed of
fascist elements. Hence, contemporary fascism, straitjacketed by "fiscal rectitude," cannot
possibly alleviate even temporarily the economic crises facing people and cannot provide any
cover for a transition to a fascist state akin to the ones of the 1930s, which makes such a
transition that much more unlikely.
Another difference is also related to the phenomenon of the globalization of finance. The
1930s were marked by what Lenin had earlier called "interimperialist rivalry." The military
expenditures incurred by fascist governments, even though they pulled countries out of the
Depression and unemployment, inevitably led to wars for "repartitioning an already partitioned
world." Fascism was the progenitor of war and burned itself out through war at, needless to
say, great cost to humankind.
Contemporary fascism, however, operates in a world where interimperialist rivalry is far
more muted. Some have seen in this muting a vindication of Karl Kautsky's vision of an
"ultraimperialism" as against Lenin's emphasis on the permanence of interimperialist rivalry,
but this is wrong. Both Kautsky and Lenin were talking about a world where finance capital and
the financial oligarchy were essentially national -- that is, German, French, or British. And
while Kautsky talked about the possibility of truces among the rival oligarchies, Lenin saw
such truces only as transient phenomena punctuating the ubiquity of rivalry.
In contrast, what we have today is not nation-based finance capitals, but
international finance capital into whose corpus the finance capitals drawn from
particular countries are integrated. This globalized finance capital does not want the world
to be partitioned into economic territories of rival powers ; on the contrary, it wants the
entire globe to be open to its own unrestricted movement. The muting of rivalry between major
powers, therefore, is not because they prefer truce to war, or peaceful partitioning of the
world to forcible repartitioning, but because the material conditions themselves have changed
so that it is no longer a matter of such choices. The world has gone beyond both Lenin and
Kautsky, as well as their debates.
Not only are we not going to have wars between major powers in this era of fascist upsurge
(of course, as will be discussed, we shall have other wars), but, by the same token, this
fascist upsurge will not burn out through any cataclysmic war. What we are likely to see is a
lingering fascism of less murderous intensity , which, when in power, does not
necessarily do away with all the forms of bourgeois democracy, does not necessarily physically
annihilate the opposition, and may even allow itself to get voted out of power occasionally.
But since its successor government, as long as it remains within the confines of the neoliberal
strategy, will also be incapable of alleviating the crisis, the fascist elements are likely to
return to power as well. And whether the fascist elements are in or out of power, they will
remain a potent force working toward the fascification of the society and the polity, even
while promoting corporate interests within a regime of globalization of finance, and hence
permanently maintaining the "partnership between big business and fascist upstarts."
Put differently, since the contemporary fascist upsurge is not likely to burn itself out as
the earlier one did, it has to be overcome by transcending the very conjuncture that produced
it: neoliberal capitalism at a dead end. A class mobilization of working people around an
alternative set of transitional demands that do not necessarily directly target neoliberal
capitalism, but which are immanently unrealizable within the regime of neoliberal capitalism,
can provide an initial way out of this conjuncture and lead to its eventual transcendence.
Such a class mobilization in the third world context would not mean making no truces with
liberal bourgeois elements against the fascists. On the contrary, since the liberal bourgeois
elements too are getting marginalized through a discourse of jingoistic nationalism typically
manufactured by the fascists, they too would like to shift the discourse toward the material
conditions of people's lives, no doubt claiming that an improvement in these conditions is
possible within the neoliberal economic regime itself. Such a shift in discourse is in
itself a major antifascist act . Experience will teach that the agenda advanced as part of
this changed discourse is unrealizable under neoliberalism, providing the scope for dialectical
intervention by the left to transcend neoliberal capitalism.
Imperialist
Interventions
Even though fascism will have a lingering presence in this conjuncture of "neoliberalism at
a dead end," with the backing of domestic corporate-financial interests that are themselves
integrated into the corpus of international finance capital, the working people in the third
world will increasingly demand better material conditions of life and thereby rupture the
fascist discourse of jingoistic nationalism (that ironically in a third world context is not
anti-imperialist).
In fact, neoliberalism reaching a dead end and having to rely on fascist elements revives
meaningful political activity, which the heyday of neoliberalism had precluded, because most
political formations then had been trapped within an identical neoliberal agenda that appeared
promising. (Latin America had a somewhat different history because neoliberalism arrived in
that continent through military dictatorships, not through its more or less tacit acceptance by
most political formations.)
Such revived political activity will necessarily throw up challenges to neoliberal
capitalism in particular countries. Imperialism, by which we mean the entire economic and
political arrangement sustaining the hegemony of international finance capital, will deal with
these challenges in at least four different ways.
The first is the so-called spontaneous method of capital flight. Any political formation
that seeks to take the country out of the neoliberal regime will witness capital flight even
before it has been elected to office, bringing the country to a financial crisis and thereby
denting its electoral prospects. And if perchance it still gets elected, the outflow will only
increase, even before it assumes office. The inevitable difficulties faced by the people may
well make the government back down at that stage. The sheer difficulty of transition away from
a neoliberal regime could be enough to bring even a government based on the support of workers
and peasants to its knees, precisely to save them short-term distress or to avoid losing their
support.
Even if capital controls are put in place, where there are current account deficits,
financing such deficits would pose a problem, necessitating some trade controls. But this is
where the second instrument of imperialism comes into play: the imposition of trade sanctions
by the metropolitan states, which then cajole other countries to stop buying from the
sanctioned country that is trying to break away from thralldom to globalized finance capital.
Even if the latter would have otherwise succeeded in stabilizing its economy despite its
attempt to break away, the imposition of sanctions becomes an additional blow.
The third weapon consists in carrying out so-called democratic or parliamentary coups of the
sort that Latin America has been experiencing. Coups in the old days were effected through the
local armed forces and necessarily meant the imposition of military dictatorships in lieu of
civilian, democratically elected governments. Now, taking advantage of the disaffection
generated within countries by the hardships caused by capital flight and imposed sanctions,
imperialism promotes coups through fascist or fascist-sympathizing middle-class political
elements in the name of restoring democracy, which is synonymous with the pursuit of
neoliberalism.
And if all these measures fail, there is always the possibility of resorting to economic
warfare (such as destroying Venezuela's electricity supply), and eventually to military
warfare. Venezuela today provides a classic example of what imperialist intervention in a third
world country is going to look like in the era of decline of neoliberal capitalism, when
revolts are going to characterize such countries more and more.
Two aspects of such intervention are striking. One is the virtual unanimity among the
metropolitan states, which only underscores the muting of interimperialist rivalry in the era
of hegemony of global finance capital. The other is the extent of support that such
intervention commands within metropolitan countries, from the right to even the liberal
segments.
Despite this opposition, neoliberal capitalism cannot ward off the challenge it is facing
for long. It has no vision for reinventing itself. Interestingly, in the period after the First
World War, when capitalism was on the verge of sinking into a crisis, the idea of state
intervention as a way of its revival had already been mooted, though its coming into vogue only
occurred at the end of the Second World War. 11
Today, neoliberal capitalism does not even have an idea of how it can recover and revitalize
itself. And weapons like domestic fascism in the third world and direct imperialist
intervention cannot for long save it from the anger of the masses that is building up against
it.
Samuel Berrick Saul, Studies in British Overseas Trade, 1870–1914
(Liverpool: Liverpool University Press, 1960).
Paul A. Baran and Paul M. Sweezy, Monopoly Capital (New York:
Monthly Review Press, 1966).
One of the first authors to recognize this fact and its significance was Paul Baran in
The Political Economy of
Growth (New York: Monthly Review Press, 1957).
For the role of such colonial transfers in sustaining the British balance of payments and the
long Victorian and Edwardian boom, see Utsa Patnaik, "Revisiting the 'Drain,' or Transfers
from India to Britain in the Context of Global Diffusion of Capitalism," in Agrarian
and Other Histories: Essays for Binay Bhushan Chaudhuri , ed. Shubhra Chakrabarti and
Utsa Patnaik (Delhi: Tulika, 2017), 277-317.
Federal Reserve Board of Saint Louis Economic Research, FRED, "Capacity Utilization:
Manufacturing," February 2019 (updated March 27, 2019), http://fred.stlouisfed.org .
This issue is discussed by Charles P. Kindleberger in The World in Depression,
1929–1939 , 40th anniversary ed. (Oakland: University of California Press,
2013).
Joseph Schumpeter had seen Keynes's The Economic Consequences of the Peace as
essentially advocating such state intervention in the new situation. See his essay, "John
Maynard Keynes (1883–1946)," in Ten Great Economists (London: George Allen
& Unwin, 1952).
Utsa Patnaik is Professor Emerita at the Centre for Economic Studies and Planning,
Jawaharlal Nehru University, New Delhi. Her books include Peasant Class Differentiation (1987),
The Long Transition (1999), and The Republic of Hunger and Other Essays (2007). Prabhat Patnaik
is Professor Emeritus at the Centre for Economic Studies and Planning, Jawaharlal Nehru
University, New Delhi. His books include Accumulation and Stability Under Capitalism (1997),
The Value of Money(2009), and Re-envisioning Socialism(2011).
"... By now the Republican hypocrisy on "fiscal responsibility" has become blindingly obvious: nondefense spending is always bad because it increases the national debt, tax cuts are fine even though they do the same. The political scam here may be more plain than the economic. Democrats understand that if they undertake the onerous task of closing budget deficits with unpopular tax increases and spending cuts, it only sets up the other side to make hay in the next election, then in office to blow up the deficit all over again. We've seen this three times since 1980. ..."
"... When the issues of poverty and inequality came up, a common neoliberal dodge was to invoke the Horatio Alger myth -- that in America, with hard work one can, or should be able to, raise oneself up by one' bootstraps. This switches the question from security made possible by the public sector to an individual responsibility for economic mobility. ..."
"... As it happens, mobility has declined over the long term in the United States, but that aside, it's a two-way street. The escalator of life runs in both directions. Moreover, it's a separate issue from that of poverty or inequality. One can have more mobility and the same or worse poverty or inequality. The rising tide goes out as well as in. ..."
"... The neoliberal remedy for poverty and inequality is commonly held to be education, because workers lack the requisite skills to earn a living wage. It's kind of their fault. All that's needed is some reasonable public expenditure. No deeper structural factors are at issue. This mindset is contradicted now in two ways. ..."
"... It does not require much contemplation to realize that merely splitting up the largest, most offensive corporations brings little promise of curbing their abuses. The Standard Oil monopoly was cut into pieces a century ago, and nobody has accused their spawn (Exxon, Shell, etc.) of being creditable public citizens. Three search engines that send you to the same scurrilous, paid-for content are no better than one. There is no reason to think life in a Walmart warehouse is any better than one in Amazon's. ..."
"... Postal savings banks can shield savers, home buyers, and taxpayers from the adventures of big players in the stock market. Nationalization of pharmaceutical patents could save consumers billions of dollars a year. ..."
"... Neoliberalism in foreign policy means the use of lethal force for the ostensible objectives of humanitarian intervention. This has always been the mask for US efforts to maintain its hegemonic position among world powers. Pressure on Iran or Venezuela or Iraq, for instance, was never credible as any sort of defense against existential threats to the United States, since no such threats from those nations could be demonstrated. The same can be said for the endless US presence in Afghanistan. ..."
"... Credit for the ebb of faith in the use of US military power is due to multiple sources. Foremost among these is the abject debacle of US machinations in Iraq (and Libya, if you're paying attention). These arguably contributed to caution on the part of the Obama Administration with respect to Iran and Syria. Among political figures, perhaps the strongest pressures are generated by Bernie Sanders and yes, Donald Trump. ..."
Sheer up. The Left is winning the battle of ideas. Ideas are the basis for organization, and
organization is prior to change. The signs are in the evolution of statements and platforms
presented by Democratic presidential candidates. As the economist John Maynard Keynes wrote,
eighty and some years ago:
Practical men, who believe themselves to be quite exempt from any intellectual influence,
are usually the slaves of some defunct economist. Madmen in authority, who hear voices in the
air, are distilling their frenzy from some academic scribbler of a few years back.
It's our "madmen" (and women) who are more in evidence these days -- not as public
personalities, but in the guise of campaign commitments offered by leading Democratic
politicians. Their ascendance parallels the decline of neoliberal ideology.
In this essay, I'd like to give credit where it is due for the raising of consciousness. In
the process, I would like to foster a keener appreciation for the difference between
progressive and neoliberal doctrine. What does it mean to be left these days? Everybody knows
the extreme point -- wholesale socialization of the commanding heights of the economy. But
where is the separation between hackneyed liberalism, "woke" and otherwise, and emerging
progressive platforms?
It does not always pay to highlight differences. But our ambitions go well beyond a
restoration of the old order under Barack Obama or Bill Clinton. For one thing, the not
unlikely shortcomings of a President Joe Biden could lead us straight back to the current
dilemma, perhaps with a younger, smarter version of Trump. Senators Josh Hawley of Missouri and
Tom Cotton of Arkansas wait impatiently in the wings, tanned, rested, and ready to wreak havoc
anew. We bitterly recall the triumphant victories of 1992 and 2008. Democrats won the White
House and held both houses of Congress; then they stunk up the joint, leading to the midterm
electoral debacles of 1994 and 2010.
The urge to paper over differences, in the interests of antifascist unity, intermingles with
sympathy for the old liberal verities and a reluctance, if not an incapacity, to offer a
forthright critique of progressive alternatives. Among friends, the label "neoliberal" is often
taken as an insult. The desire by liberals to avoid being flanked on the Left is strong. Of
course, being "more left" is not necessarily better, much less a sign of virtue. There have
always been virtuous liberals and low-down radicals.
From my own policy standpoint, I would assert that the radical or progressive option is not
intrinsically preferable to the neoliberal: we need to get down to cases. Here are some leading
examples of the dwindling currency of neoliberal thinking.
Up From Deficit Reduction
By now the Republican hypocrisy on "fiscal responsibility" has become blindingly obvious:
nondefense spending is always bad because it increases the national debt, tax cuts are fine
even though they do the same. The political scam here may be more plain than the economic.
Democrats understand that if they undertake the onerous task of closing budget deficits with
unpopular tax increases and spending cuts, it only sets up the other side to make hay in the
next election, then in office to blow up the deficit all over again. We've seen this three
times since 1980.
The economic bankruptcy of deficit reduction remains elusive to many Democrats. In
increasingly globalized capital markets, the impact of higher deficits on interest rates and
the fabled "crowding out" of investment have failed to transpire. Neither low unemployment nor
monetary stimulus from the Federal Reserve set off ruinous hyperinflation, contrary to the
conventional wisdom.
The growth in popularity of Modern Monetary Theory has further winnowed the ranks of liberal
budget balancers. An exception is Mayor Pete, who had the fortitude to identify himself as an
outlier. In this case, the exception proves the rule, which is that deficit reduction and a
balanced budget have been removed from the panel of Democratic hot buttons.
The Siren
Song of Economic Opportunity
When the issues of poverty and inequality came up, a common neoliberal dodge was to invoke
the Horatio Alger myth -- that in America, with hard work one can, or should be able to, raise
oneself up by one' bootstraps. This switches the question from security made possible by
the public sector to an individual responsibility for economic mobility.
As it happens, mobility has declined over the long term in the United States, but that
aside, it's a two-way street. The escalator of life runs in both directions. Moreover, it's a
separate issue from that of poverty or inequality. One can have more mobility and the same or
worse poverty or inequality. The rising tide goes out as well as in.
The neoliberal remedy for poverty and inequality is commonly held to be education, because
workers lack the requisite skills to earn a living wage. It's kind of their fault. All that's
needed is some reasonable public expenditure. No deeper structural factors are at issue. This
mindset is contradicted now in two ways.
First, the idea of education as an essential,
missing ingredient is being supplanted by the idea that what's at issue is power , both
political and economic . The wealthy control streams of income and institutions of
credentialization that could be rerouted, via taxation, to finance education ("free college")
that has an equalizing effect on wealth and enhances economic security. Most candidates support
ways to reduce the costs of post-secondary education.
Second, power also stems from the operations of racial and gender oppression. Nonwhites and
women are held back due to institutions of racism and sexism. One such institution is the
pairing of local government finance of public education with racial segregation. Segregation
simultaneously stems from and reinforces housing discrimination and wealth inequality.
I would also suggest that wealth inequality and employment discrimination impair family
well-being and foster single-parent, female-headed families with children, which promotes
gender-based oppression in the forms of unequal pay and occupational segregation. Women with a
disproportionate responsibility for the care of children have less power to command livable
wages and to advance in the labor market.
Democratic candidates are aiming closer to the roots of these problems in proposals to
combat institutional racism and to expand subsidized childcare. Pete Buttigieg has proposed a
comprehensive program to deal with institutional racism. Cory Booker has talked of "Baby
Bonds," a prominent proposal aimed at racial wealth inequality. Most candidates pledge a
significant increase in resources for childcare. We are some ways beyond Bill Clinton's "Mend
it, don't end it" response to the limits of affirmative action, or Barack Obama's "Beer
Summit."
Medicare for Lots More People
The limits of Obamacare have become painfully obvious, even as the added benefits of the
program have stoked public appetite for more serious progress. One constraint on the Affordable
Care Act's design at the time was reservations about its impact on the budget deficit, a
concern that looks farcical in retrospect.
The debate among Democrats now is not whether to extend public support for health care, but
by how much, and how rapidly. The implication is that health insurance markets are fatally
flawed, despite neoliberal attempts to improve them.
More broadly, the burgeoning critiques of monopoly, not least in the form of rapacious,
privacy-destroying tech giants whose business models entail pollution of public debate, raise
fundamental questions about markets and the neoliberals who "believe" in them.
It does not require much contemplation to realize that merely splitting up the largest, most
offensive corporations brings little promise of curbing their abuses. The Standard Oil monopoly
was cut into pieces a century ago, and nobody has accused their spawn (Exxon, Shell, etc.) of
being creditable public citizens. Three search engines that send you to the same scurrilous,
paid-for content are no better than one. There is no reason to think life in a Walmart
warehouse is any better than one in Amazon's.
A critique of monopoly can be channeled into consideration of shifting industries into the
public sector. Public broadband can diminish the power of Big Media, which relies on vertical
integration of cable, broadband, and content production. The same could be said of the clawback
of "intellectual property" rights in film and music. Postal savings banks can shield savers,
home buyers, and taxpayers from the adventures of big players in the stock market.
Nationalization of pharmaceutical patents could save consumers billions of dollars a
year.
War Is a Racket
Neoliberalism in foreign policy means the use of lethal force for the ostensible objectives
of humanitarian intervention. This has always been the mask for US efforts to maintain its
hegemonic position among world powers. Pressure on Iran or Venezuela or Iraq, for instance, was
never credible as any sort of defense against existential threats to the United States, since
no such threats from those nations could be demonstrated. The same can be said for the endless
US presence in Afghanistan.
Credit for the ebb of faith in the use of US military power is due to multiple sources.
Foremost among these is the abject debacle of US machinations in Iraq (and Libya, if you're
paying attention). These arguably contributed to caution on the part of the Obama
Administration with respect to Iran and Syria. Among political figures, perhaps the strongest
pressures are generated by Bernie Sanders and yes, Donald Trump.
... ... ...
As this article was being written, the Sanders campaign released additional, detailed plans
pertaining to labor rights, the Green New Deal, and how law enforcement deals with race. In
this respect, his opponents are invariably more fated to play catch-up than to reject his
proposals. The few who tried to plant a flag on their opposition to socialism are passing from
the scene. It's as if Democratic voters have been thirsting for progressive proposals for
decades, and now they will drink as much as can be offered. No candidate so far has proven
willing to rain on this parade.
That's why I say we are witnessing the sunset of neoliberalism.
The question why the USA intelligence agencies were "unaware" about Epstein activities is an interesting one. Similar question can
be asked about Hillary "activities" related to "Clinton cash".
Actually the way the USA elite deal with scandals is to ostracize any whistleblower and silence any media that tryt to dig the story.
Open repression including physical elimination is seldom used those days as indirect methods are quite effective.
Notable quotes:
"... Either we root out every last source of rot by investigating, indicting and jailing every wrong-doer and everyone who conspired to protect the guilty in the Epstein case, or America will have sealed its final fall. ..."
"... If you doubt this, then please explain how 1) the NSA, CIA and FBI didn't know what Jeffrey Epstein was up to, and with whom; 2) Epstein was free to pursue his sexual exploitation of minors for years prior to his wrist-slap conviction and for years afterward; 3) Epstein, the highest profile and most at-risk prisoner in the nation, was left alone and the security cameras recording his cell and surroundings were "broken." ..."
"... America's ruling class has crucified whistleblowers , especially those uncovering fraud in the defense (military-industrial-security) and financial (tax evasion) sectors and blatant violations of public trust, civil liberties and privacy. ..."
"... Needless to say, a factual accounting of corruption, cronyism, incompetence, self-serving exploitation of the many by the few, etc. is not welcome in America. Look at the dearth of investigative resources America's corporate media is devoting to digging down to the deepest levels of rot in the Epstein case. ..."
Either we root out every last source of rot by investigating, indicting and jailing every wrong-doer and everyone who conspired
to protect the guilty in the Epstein case, or America will have sealed its final fall.
When you discover rot in an apparently sound structure, the first question is: how far has the rot penetrated? If the rot
has reached the foundation and turned it to mush, the structure is one wind-storm from collapse.
How deep has the rot of corruption, fraud, abuse of power, betrayal of the public trust, blatant criminality and insiders protecting
the guilty penetrated America's key public and private institutions? It's difficult to tell, as the law-enforcement and security
agencies are themselves hopelessly compromised.
If you doubt this, then please explain how 1) the NSA, CIA and FBI didn't know what Jeffrey Epstein was up to, and with whom;
2) Epstein was free to pursue his sexual exploitation of minors for years prior to his wrist-slap conviction and for years afterward;
3) Epstein, the highest profile and most at-risk prisoner in the nation, was left alone and the security cameras recording his cell
and surroundings were "broken."
If this all strikes you as evidence that America's security and law-enforcement institutions are functioning at a level that's
above reproach, then 1) you're a well-paid shill who's protecting the guilty lest your own misdeeds come to light or 2) your
consumption of mind-bending meds is off the charts.
How deep has the rot gone in America's ruling elite? One way to measure the depth of the rot is to ask how whistleblowers
who've exposed the ugly realities of insider dealing, malfeasance, tax evasion, cover-ups, etc. have fared.
America's ruling class has crucified whistleblowers , especially those uncovering fraud in the defense (military-industrial-security)
and financial (tax evasion) sectors and blatant violations of public trust, civil liberties and privacy.
Needless to say, a factual accounting of corruption, cronyism, incompetence, self-serving exploitation of the many by the
few, etc. is not welcome in America. Look at the dearth of investigative resources America's corporate media is devoting to digging
down to the deepest levels of rot in the Epstein case.
The closer wrong-doing and wrong-doers are to protected power-elites, the less attention the mass media devotes to them.
... ... ...
Here are America's media, law enforcement/security agencies and "leadership" class: they speak no evil, see no evil and
hear no evil, in the misguided belief that their misdirection, self-service and protection of the guilty will make us buy the narrative
that America's ruling elite and all the core institutions they manage aren't rotten to the foundations.
Either we root out every last source of rot by investigating, indicting and jailing every wrong-doer and everyone who conspired
to protect the guilty in the Epstein case, or America will have sealed its final fall.
What democracy they are talking about? Democracy for whom? This Harvard political prostitutes are talking about democracy for oligarchs
which was the nest result of EuroMaydan and the ability of Western companies to buy assets for pennies on the dollar without the control
of national government like happen in xUSSR space after dissolution of the USSR, which in retrospect can be classified as a color revolution
too, supported by financial injection, logistical support and propaganda campaign in major Western MSM.
What Harvard honchos probably does not understand or does not wish to understand is that neoliberalism as a social system lost its
attraction and is in irreversible decline. The ideology of neoliberalism collapsed much like Bolsheviks' ideology. As Politician like
Joe Boden which still preach neoliberalism are widely viewed as corrupt or senile (or both) hypocrites.
The "Collective West" still demonstrates formidable intelligence agencies skills (especially the USA and GB), but the key question
is: "What they are fighting for?"
They are fighting for neoliberalism which is a lost case. Which looks like KGB successes after WWIII. They won many battles and
lost the Cold war.
Not that Bolsheviks in the USSR was healthy or vibrant. Economics was a deep stagnation, alcoholism among working class was rampant,
the standard of living of the majority of population slides each year, much like is the case with neoliberalism after, say, 1991. Hidden
unemployment in the USSR was high -- at least in high teens if not higher. Like in the USA now good jobs were almost impossible to obtain
without "extra help". Medical services while free were dismal, especially dental -- which were horrible. Hospitals were poor as church
rats as most money went to MIC. Actually, like in the USA now, MIC helped to strangulate the economy and contributed to the collapse.
It was co a corrupt and decaying , led by completely degenerated leadership. To put the person of the level of Gorbachov level of political
talent lead such a huge and complex country was an obvious suicide.
But the facts speak for themselves: what people usually get as the result of any color revolution is the typical for any county
which lost the war: dramatic drop of the standard of living due to economic rape of the country.
While far form being perfect the Chinese regime at least managed to lift the standard of living of the majority of the population
and provide employment. After regime change China will experience the same economic rape as the USSR under Yeltsin regime. So in no
way Hong Cong revolution can be viewed a progressive phenomenon despite all the warts of neoliberalism with Chenese characteristics
in mainland China (actually this is a variant of NEP that Gorbachov tried to implement in the USSR, but was to politically incompetent
to succeed)
CHENOWETH: I think it really boils down to four different things. The first is a large and diverse participation that's
sustained.
The second thing is that [the movement] needs to elicit loyalty shifts among security forces in particular, but also other
elites. Security forces are important because they ultimately are the agents of repression, and their actions largely decide
how violent the confrontation with -- and reaction to -- the nonviolent campaign is going to be in the end. But there are other
security elites, economic and business elites, state media. There are lots of different pillars that support the status quo,
and if they can be disrupted or coerced into noncooperation, then that's a decisive factor.
The third thing is that the campaigns need to be able to have more than just protests; there needs to be a lot of variation
in the methods they use.
The fourth thing is that when campaigns are repressed -- which is basically inevitable for those calling for major changes
-- they don't either descend into chaos or opt for using violence themselves. If campaigns allow their repression to throw
the movement into total disarray or they use it as a pretext to militarize their campaign, then they're essentially co-signing
what the regime wants -- for the resisters to play on its own playing field. And they're probably going to get totally crushed.
Wai Sing-Rin @waisingrin • Aug 27
Replying to @ChrisFraser_HKU @edennnnnn_ and 2 others
Anyone who watched the lone frontliner (w translator) sees the frontliners are headed for disaster. They're fighting just
to fight with no plans nor objectives.
They see themselves as heroes protecting the HK they love. No doubt their sincerity, but there are 300 of them left.
"... Rickards had previously worked for the CIA (possibly still does – who knows?) but now seems to be a free-wheeling business executive, writer and strategic analyst. He tends to circulate outside of the usual middle-ranking semi-elite circles preferring to consort with the less observable, higher-ranking coteries of the inner-party. Moreover, he has nothing but disdain for the run-of-the-mill talking heads to be found (in abundance) in the media and academia – the outer-party. ..."
"... History is the first casualty of media micro-second attention span. An army of pseudo-savants saturate the airways to explain that tariffs are bad, trade wars hurt growth and mercantilism are a throwback to the 17th century. These sentiments come from mainstream liberals and conservatives and tag-along journalists trained in the orthodoxy of so-called free-trade and the false if comforting belief that trade deficits are the flipside of capital surpluses. So, what is the problem? The problem is that perpetual trade deficits have put the United States on a path to a crisis of the US$."[ 1 ] ..."
"... Obama, both Bushes, and Bill Clinton were globalists, defined as those willing to trade-off or compromise US interests for the sake of a stronger global community even conservative hawks like Reagan and JFK were firmly in the globalist camp, as they relied on NATO, the UN and the IMF to pursue their cold war goals. ..."
"... LBJ's administration contrived to conduct the Vietnam War as well as an expensive social programme, simultaneously. A guns plus butter economy. (The original version of the Guns versus butter argument was given in a speech on January 17, 1936, in Nazi Germany. The then Minister of Propaganda Joseph Goebbels stated: "We can do without butter, but, despite all our love of peace, not without arms." ) ..."
"... Globally, the leading manufacturer of auto-vehicles is Volkswagen followed by Toyota. GM are 4th and Ford are 8th of ten. Hardly market leaders anymore, but Rickards apportions the blame to 'unfair practices' by foreign manufacturers and argues instead for tariffs. The same goes for other trade partners. Fact that the United States has to a large extent been deindustrialised was a political choice of its own making. ..."
"... There were a number of advantages which accrued to the dollar contingent on the ending of gold convertibility which Eichengreen listed these in his book. But the principle one was making the surplus nations of the world pay for America's wars with an unconvertible currency. Instead of being paid for in gold, or at least a gold-backed currency the world produced goods and services for a piece of green paper backed by nothing. ..."
"... This was to be expected quite simply because at bottom Rickards is a sophist much in the tradition of Protagoras, Gorgias and Thrasymachus "I say that justice is nothing other than the advantage of the stronger" [ 12 ] ..."
"... A view which Rickards would certainly endorse. Beneath the Upper Manhattan, polished chic, there resides a ruthless Cold Warrior. The further one digs into the book, the more this becomes apparent. ..."
"... Many of us are aware of the problems of the USD but few are able to so succinctly explain why and connect the dots to expose the true picture. The bottom line is that the lifespan of the USD as king is almost over ..."
"... The US has been exposed, and so well said, as a predator nation .There must be a reason why China and Russia are buying up as much gold as their economy will permit .The exchange medium used for trade since time immemorial . ..."
"... The Wall Street ethos has always been 'kill or be killed' where bears eat, and bulls eat, but pigs get slaughtered! The problem with today's market & stock valuations is that they are as hyperinflated as Real Estate Commercial & Residential sectors are which leaves no wiggle room for price discovery until there is a system wide crash that mean reverts the valuations back to a realistic price. ..."
"... All that is happening now is that Trump is trying to solve his country's intractable economic and financial problems by looting the rest of the planet. This is not a new development, but Trump is at least refreshingly honest in his public pronouncements. ..."
"... The Nazi Empire imposed tribute on its conquests in identical fashion. Send us your industrial output, agricultural produce and raw materials. In return we'll give you a big credit balance at the Reichsbank. ..."
"... The current (real) military budget is $1,134 billion, around 60% higher than the fictitious figure that is normally touted. ..."
"... Gold could form some kind of basis for exchange in a collapse setting. Other desirable barter items would be alcohol, cigarettes, basic drugs like aspirin and paracetamol, electrical batteries, fuel and similar goods. Maybe ammunition as well. Goods were priced in cigarettes in postwar Germany. ..."
"... Bismarck is normally credited with the choice between Guns and Butter. Goebbels was suggesting that Guns will bring Butter. ..."
"... The crime in all this is in the pursuit of money -- ultimately a wholly artificial concept -- we're wasting immense amounts of resources and human potential, spreading misery and despoliation all over the planet and generally behaving like really awful global citizens. We can and must do better. ..."
"... American exceptionalism, for example, takes it for granted that we in the West are good, and therefore the East must become more like us. But we are logically, and morally, obliged to look at this from the opposite perspective too: What if the Chinese take it for granted that they are good, and therefore the West must become more like them? ..."
"... American parasitism writ large over the last half century has amply signified to the entire world that 'manifest destiny' was merely a ruse to foist American hegemony onto all sovereign nations at the behest of an out-of-control American Oligopoly that was power-tripping post WW2 & drunk on the souls of the poor sots all over the entire world with their power hungry warmongering Military Industrial Complex. ..."
"... Its not "American". We just happen to be the chosen host for this part of history. Before us it was the British Empire that was top dog. ..."
"... You have made the common mistake of asserting that it is America, instead of those who govern (the USA and its pundits) that have engineered the problems you point out. ..."
"... To condense this lengthy essay: This ship is sinking. ..."
"Aftermath" is the latest addition to three previous publications by Rickards, Currency Wars (2011), The Death of Money (2014),
The Road to Ruin (2016). Together, with the present offering (Aftermath, 2019), the author uses the analogy of the Four Horsemen
of the Apocalypse to illustrate the themes of his four books. The latest book is thematic in its approach to the events which have
taken place in the world in general and the United States in particular during this period.
HIGH SOCIETY
Rickards had previously worked for the CIA (possibly still does – who knows?) but now seems to be a free-wheeling business executive,
writer and strategic analyst. He tends to circulate outside of the usual middle-ranking semi-elite circles preferring to consort
with the less observable, higher-ranking coteries of the inner-party. Moreover, he has nothing but disdain for the run-of-the-mill
talking heads to be found (in abundance) in the media and academia – the outer-party.
His observations of this social stratum are unapologetic and caustic:
History is the first casualty of media micro-second attention span. An army of pseudo-savants saturate the airways to explain
that tariffs are bad, trade wars hurt growth and mercantilism are a throwback to the 17th century. These sentiments come from
mainstream liberals and conservatives and tag-along journalists trained in the orthodoxy of so-called free-trade and the false
if comforting belief that trade deficits are the flipside of capital surpluses. So, what is the problem? The problem is that perpetual
trade deficits have put the United States on a path to a crisis of the US$."[
1 ]
As is apparent, his contempt is palpable.
It should be said that much of his writing and theorising is at times occasioned by a high level of sophistication, alas sadly
lacking in most of his contemporaries. But for all his refinement and eloquence that doesn't stop him being, from Off Guardian's
perspective (and mine), on the other side – the side of the Anglo-Zionist empire.
THE GREAT BETRAYAL
Throughout this book and previous books there runs a familiar leitmotif; a sense of betrayal by the present dominant section of
the US elite. This is not by any means an unusual political phenomenon and bears comparison with the stab-in-the-back myth – a notion
doing the rounds in Germany circa 1918.
It held that the German Army did not lose World War I on the battlefield but it was 'traitors' on the home front, especially the
traitorous republicans who overthrew the Hohenzollern monarchy in the German Revolution of 1918–19.
This precedent loosely corresponds to Rickards' belief in the perfidy of the current leadership of the US and his vitriol is directed
against this globalist faction who are firmly ensconced in both Democrat and Republican parties and whom, he argues, have sold the
pass in terms of America's strategic interests. He writes:
Obama, both Bushes, and Bill Clinton were globalists, defined as those willing to trade-off or compromise US interests for
the sake of a stronger global community even conservative hawks like Reagan and JFK were firmly in the globalist camp, as they
relied on NATO, the UN and the IMF to pursue their cold war goals.
However, all was not lost. As a result of
the Presidential election of 2016 when Donald Trump was sworn in on 17 January 2017 as the strongest nationalist since Theodore
Roosevelt. For the first time in 100 years a committed nationalist was sitting in the Oval Office." [
2 ]
The event was obviously political grist to Rickards' mill.
However, precisely how this liberation of the US from the domestic globalists' stranglehold was to be brought about wasn't made
clear, and in fact is barely touched upon by Rickards.
Trump, for all his bombast and promises to Make America Great Again (MAGA), and pursue a radical foreign policy of withdrawal
from globalist wars of choice and military adventurism, has been conspicuous by its absence.
Moreover, from the outset he has been beset by the ancien regime of neo-conservatives and neo-liberals – Bolton, Pompeo and Pence
– entrenched in key US institutions, as well as various think-tanks and media who are still doggedly set upon the realization of
neo-con foreign policy goals.
It seems odd that Rickards doesn't see fit to comment on this important development given that Trumps' campaign promises have
disappeared almost without trace since he entered the Oval Office.
IT'S THE ECONOMY STUPID
Rickards is on firmer ground, however, when dissecting the 8th wonder of the world – US economic policy. The US sovereign debt
(i.e., the debt of the Federal Government) to GDP is now at a record, this is unprecedented for a peacetime administration.
In addition, it is also worth noting the magnitude of US private debt and unfunded future liabilities, pensions, Medicaid, social
security and so forth.
This would include household debt, student debt, financial debt, corporate debt, and municipal debt. Add this to sovereign debt
and you get a figure roughly 5 times US sovereign debt, and even this is regarded as being a conservative figure according to many
– see David Stockman, John Mauldin et al).
According to Rickards, the present situation has been largely the result of excess spending by both Democratic and Republican
administrations. The spending has either been on 'Defence' – a Republican favourite – or social like L.B. Johnson's 'Great Society'
programme – a Democratic favourite.
LBJ's administration contrived to conduct the Vietnam War as well as an expensive social programme, simultaneously. A guns plus
butter economy. (The original version of the Guns versus butter argument was given in a speech on January 17, 1936, in Nazi Germany.
The then Minister of Propaganda Joseph Goebbels stated: "We can do without butter, but, despite all our love of peace, not without
arms." )
LBJ's guns-and-butter policies were enacted in the late sixties at the height of the Vietnam war and the Tet Offensive. The utopian
attempt to have the best of both worlds brought LBJ's administration to an end; more importantly, perhaps it was also the beginning
of the process which brought down the curtain on the post WW2 economic world order established at the Bretton Woods conference in
1944.
Because the costs of the Vietnam war were superimposed on the economy not far effectively from full employment, the US domestic
sector was severely destabilised.
Instead of taxing the nation to pay for the war, the government engaged in the more acceptable practice of deficit financing
Vietnam showed that neither the United States nor any other democratic nation can ever again afford the foreign exchange costs
of conventional warfare, although the periphery was still kept in line by American military initiatives most recently in Yugoslavia
and Afghanistan.
The lesson in the long term is that peace will be maintained only by governments refusing to finance the military and other
excesses of the increasingly indebted imperial power." [
3 ]
The figure for the US sovereign debt – began to rise relentlessly from the 1980s onwards approaching wartime levels by the time
of the 2008 blowout.
It has been estimated by some economic theorists that any sovereign Debt-to-GDP figure greater than 60% represents a tripwire
whereby governments should act to rein in government expenditures.
The EU Maastricht criteria, for example, stipulated that EU Debt-to-GDP should not go over 60% except in certain circumstances
and an annual budgetary deficit should not be more than 3%.
That is a pretty tight monetary and fiscal policy EU style, but not to be outdone the spendthrift US was to go on a wild binge
in both fiscal and monetary terms the result of which is a now an unpayable mountain of debt. This gives an indication of how far
US economic policymaking has drifted away from any viable economic strategy.
Rickards fulminates:
To see how America came to this pretty pass we, one needs to review almost 40 years of fiscal policy under Presidents Reagan,
Bush 1, Clinton, Bush 2, Obama and Trump from the period 1981-2019." [
4 ]
Under Reagan in 1981 US Debt-to-GDP ratio was 32.5%. The President was gung-ho for tax cuts and big spending increases, particularly
'defence' spending. This trend was continued under the tutelage of the Bushes and Clinton, and Debt-to-GDP ratio rose to 56.4% when
Bush Jr, took office and had risen to 82% by the time he left.
The Obama years saw the Debt-to-GDP rise to 100%. The diagram below 2009 debt-to-GDP was 82.3% This figure has risen inexorably
to over 100% in 2018. Yep, here we have the dreaded law of Diminishing returns. Every new dollar of input gives you 90 cents of output.
The above diagram illustrates the growth of debt vis-à-vis National Income (GDP) since the 2008 blowout. Debt has been growing
progressively faster than National Income.
The US economy, like the US shale oil industry, has become a Ponzi scheme in all but name. The Fed's issuance of new debt to pay
off existing debt signals the key moment of the Minsky crisis.[
5 ]
There doesn't appear to be any viable way out this predicament short of a straight default. But Rickards argues that 'the United
States will never default on its debt because the Fed can simply print the money and to pay it off.' This will involve an engineered
inflation to wipe out the debt. But in fact, inflation is the default, a default by the back door. Getting paid in worthless currency
is in essence no different than not getting paid at all.
NO EXIT
As for solutions to a crisis which has seemingly reached the point of no return, all that Rickards can offer is a Japanese scenario
of low or zero growth punctuated by recession for the United States and by implication for the rest of the world. The United States
had its first long decade from 2007 to 2017 and is now into its second decade.
This growth pattern will persist absent of inflationary breakout which the Fed seems powerless to ignite in the short run;
a war; or severe depression perhaps caused by a new financial crisis.[
6 ]
Not much of a prospect for the average family then. But Rickards does give some useful advice to his more opulent readers on how
they should diversify their assets.
There are apparently "luxury bombproof bunkers built in former missile silos and expansive estates in New Zealand loaded with
rations and good wines."
Really? At this point one wonders if Mr Rickards is being serious or just smug.
SOCIAL IMMOBILITY AND THE RISE OF OLIGARCHY
The social and economic impact on levels of inequality in both the US and globally have been extremely deleterious and seem set
to continue. Inequality in income and wealth – a phenomenon identified and outlined by Thomas Piketty – is resulting in societies
which more and more resemble feudal economic and social structures rather than textbook capitalism. Social class is hardening into
social caste and rates of social mobility are decelerating at an alarming rate.
The liberal notion that the individual is the author of his/her own destiny has become a very dubious proposition when the drawbridges
of advantage, birth and preferment are drawn up. Moreover, high levels of income/wealth are not conducive to growth since the new
aristocracy owns most of the wealth/income which is hoarded rather than spent on investment and/or consumption. Stagnation, idled
capital and rent extraction becomes the economic norm.
Inequality is common in college admissions where the wealthy and connected continue to send their sons and daughters to elite schools
while the middle-class are restrained by sky-high tuitions and the burden of student loans.
It's true in the housing market where the rich picked up mansions on the cheap in foreclosure sales whilst the middle-class were
frozen in mortgage negative equity.
It's true in health care, where the rich could afford all the insurance they needed while the middle class were handicapped by
unemployment and the loss of job-related benefits. These disparities also affected the adult children of the middle-class. There
are no gold-plated benefits packages in the gig society
Research shows that fewer than 50% of all children aged 30 today earn more than their parents did at the same age. This 50% figure
compares with 60% who earned more in 1971, and 80% who earned more in 1950.
The American dream of each generation earning more than the prior generation is collapsing before our eyes The middle class is
getting poorer on a relative basis and lagging further behind the rich whose incomes absorb an increasing share of total GDP The
manner in which the rich become rich is variable.
It could be due to a number of unrelated factors Problems arise in the way that the rich stay rich become richer and pass on wealth
to their children and grandchildren." [
7 ]
It is a matter of common knowledge that the traditional techniques of preserving and creating wealth have been long established
in law, customs, education and socialization; these traditional methods being practised over decades, if not centuries, have produced
a system of elite self-recruitment, one moreover which endures through time.
Many of the richest US citizens – e.g., Buffet, Bezos, Zuckerberg – pay minimal tax demands. Much of the wealth of the richest
Americans is never taxed because they hold onto real estate and stocks and pass them onto their beneficiaries tax-free. This is one
of a perfectly legal method of avoiding tax; there are many more too numerous to cite which include various other examples of tax
avoidance/evasion.
Levels of income and wealth inequality within states are usually measured by what is called the Gini Co-efficient. This measure
is a commonly used measure of income inequality that condenses the entire income distribution for a country into a single number
between 0 and 1 or 0% to 100%: the higher the number, the greater the degree of inequality. A rough estimate of inequality is a figure
above 40%.
The United States and China are in the low forties, surrounded by underdeveloped and developing states such as The Democratic
Republic of the Congo, Uganda, Burundi and El Salvador. At the other end of the spectrum are Sweden, Norway and Iceland.
In this connection the by now well-known study carried out by two American academics at Princeton University Prof Martin Gilens
and North western University Prof Benjamin Page argue that the US is dominated by a rich and powerful elite.
Multivariate analysis indicates that economic elites and organised groups representing business interests have substantial
independent impacts on US government policy, while average citizens and mass-based interest groups have little or no independent
influence."
In plain English: the wealthy few move policy, while the average American has little power.
The two professors came to this conclusion after reviewing answers to 1,779 survey questions asked between 1981 and 2002 on public
policy issues. They broke the responses down by income level, and then determined how often certain income levels and organised interest
groups saw their policy preferences enacted.
Americans do enjoy many features central to democratic governance, such as regular elections, freedom of speech and association
and a widespread (if still contested) franchise. But we believe that if policymaking is dominated by powerful business organisations
and a small number of affluent Americans, then America's claims to be a democratic society are seriously threatened."
In summation, both gentlemen concluded that in essence the US was an oligarchy not a properly functioning democracy. All very
true but somewhat self-evident.
Rickards regards the present situation as being irreversible. He does not present any alternative to this trend other than some
vague hopes that the 'nationalist' President in the Oval Office will turn things around – MAGA in fact.
The golden age of post WW2 capitalism ended when Nixon took the dollar off the gold standard in August 1971, which was in effect
a default by the US. Holders of surplus dollars in Europe who were no longer able to swap these dollars for gold but were merely
presented with other US$s with which they had to purchase US Treasurys (Bonds) debts which were never going to be repaid. In the
age of fiat currencies Europe and various other holders of US Treasuries were in fact subsidizing the United States.
POOR LITTLE AMERICA
At this point the book becomes one long whinge about how hard done-by America has been and how the rest of the world has taken
advantage of this benign gentle giant. This rather bizarre belief calls for further analysis. The US pays some of the bill for NATO
whilst European nations pay insufficient amounts for the 'defence' of their countries.
It should be pointed out, however, that in terms of military hardware the NATO alliance is standardized to American specifications.
This means large-scale purchasing of US war materiel which is a gift bonus to the US armaments industry.
Then Germany has the nerve to buy Russian gas transported to Europe via Nordstream 2 which is cheaper and more reliable than US
Liquified Natural Gas (LNG), when in fact they should be buying more expensive and less reliable US LNG. Apparently, Germany ought
really to be subsidising the US shale oil Ponzi racket. Bad, ungrateful Germany.
Then comes the incessant carping regarding trade policy and trade deals. The US in its speed to become a cool, post-modern, financialised
economy apparently forgot about the importance of production. In the automobile industry the once dominant US triad of General Motors,
Ford and Chrysler are no longer in the vanguard and Japan, with South Korea catching up, is now the leading country in the export
of auto vehicles, a position which the US once held. It was the Japanese auto industry which pioneered production methods including
just-in-time deliveries and lean production (Toyota). Was anyone stopping the Americans from innovating?
In rank order. Figures quoted in Global Shift – Peter Dicken.
Globally, the leading manufacturer of auto-vehicles is Volkswagen followed by Toyota. GM are 4th and Ford are 8th of ten.
Hardly market leaders anymore, but Rickards apportions the blame to 'unfair practices' by foreign manufacturers and argues instead
for tariffs. The same goes for other trade partners. Fact that the United States has to a large extent been deindustrialised was
a political choice of its own making.
If the US has lost ground in the competition for trade on world markets that is because of its own insular provincialism and hubris,
not foreign competitive malpractice. Moreover, much of its productive industry which remains has been outsourced to low cost venues
such as China. The US more than anyone should know that its competitors are simply using the same policies that it itself used during
the 19th century to break British trade hegemony.
It has been the same story with agriculture. Trade liberalization (this must rank as the greatest misnomer of trade theory) and
trade treaties have been an example of the blatant unfairness of such agreements. During the Uruguay round of 'talks' (1982-2000):
the United States pushed other countries to open up their markets to areas of 'our' (i.e. the US's) strength, but resisted, successfully
so, to efforts to make us reciprocate.
Construction and maritime services, the areas of advantage of many developing countries were not included in the new agreement.
Worse still, financial services liberalization was arguably even harmful to some developing countries: as large international (read
American) banks squelched local competitors denying them the funds they garnered would be channelled to the international firms with
which they felt comfortable, not the small and medium-sized local firms
As foreign banks took over the banking systems of like Argentina and Mexico worries about small and medium sized firms within
these countries being starved of funds have been repeatedly voiced.
Whether these concerns are valid or not, whether they are exaggerated or not, is not the issue: the issue is that countries should
have the right to make these decisions themselves, as the United States did in its own country during its formative years; but under
the new international rules that America had pushed, countries were being deprived of that right.
Suffice it to say that agriculture has always been a flagrant example of the double standards inherent in the US trade liberalization
agenda. Although we insisted that other countries reduce their barriers to our products and eliminate the subsidies for which those
products competed against ours, the United States kept barriers for the goods produced by the developing countries, and the US continued
massive subsidies to its own produce. [
8 ] EXORBITANT PRIVILEGE
Oh, I almost forgot: the imperial tribute that the world pays to the hegemon; aka the reserve status of the dollar. The role of
the US dollar in the world's political economy gives it advantages which the rest of the dollar surplus-states are dragooned into
accepting. In the late sixties early seventies, the US was on the verge of technical bankruptcy due to its spending profligacy at
home and military adventurism in Indochina. It had three choices of how to deal with this acute problem.
[The] 3 courses open to the US government on the collapse of the Gold Pool in London in 1968 were: immediately pull out of
the war in South-East Asia and cut back overseas and domestic military expenditure to allow the dollar to firm again on world
markets; to continue the war paying for its foreign exchange costs with further outflows of Fort Knox gold; or to induce the Europeans
and other payments surplus areas to continue to accumulate surplus dollars and dollar equivalents (US Treasuries) not convertible
into gold." [ 9 ]
Of course, it was option three that appealed and Nixon in his television broadcast was to announce a 'temporary' suspension of
gold sales by the US to its overseas 'partners'.
The date in question, 15 August 1971, marked the end of one epoch and the beginning of another. The temporary suspension soon
morphed into a permanent one and a global fiat currency regime based on the dollar came into being. This represented a culmination
of a situation in which the US manipulation of the dollar was termed the 'Exorbitant Privilege' by the senior French politician Valery
Giscard d'Estaing. And privilege it was.
The central political fact is that the dollar standard places the direction of the world monetary policy in the hands of a
single country which thereby acquires great influence over the economic destiny of others. It is one thing to sacrifice sovereignty
in the interests of interdependence; it is quite another when the relationship is one-way.
The difference is that between the EEC(EU) and a colonial empire. The brute fact is that the acceptance of a dollar standard
necessarily implies a degree of asymmetry in power which, although it actually existed in the early post-war years, had vanished
by the time that the world sliding into a reluctant dollar standard." [
10 ]
There were a number of advantages which accrued to the dollar contingent on the ending of gold convertibility which Eichengreen
listed these in his book. But the principle one was making the surplus nations of the world pay for America's wars with an unconvertible
currency. Instead of being paid for in gold, or at least a gold-backed currency the world produced goods and services for a piece
of green paper backed by nothing.
Quite a clever little racket when you think about it.
Better still is the way that the two biggest surplus nations, Japan and China, have been the US's main creditors, bankrolling
the US by buying its Treasuries. This had another intended, or perhaps unintended effect: long term interest rates on US bonds came
down (since bond prices and bond interest rates move in opposite directions) and enabled the property bubble to expand until the
inevitable blow-out in 2008.
In mafia terms the US dollar has been a 'made' currency enjoying a set of privileges and protection which it did not earn but
foisted upon others. This is a unique dispensation which is enjoyed by the US to which the rest of the world is excluded.
However, it is in the nature of things that privileges will ultimately get abused. In pushing its luck to the point of abuse the
US should be aware that initial signs are that the world is sloughing off the US dollar. As it proceeds in that direction, the US
currency will lose its position as the global reserve asset. Holders of trillions of dollar-denominated assets will become sellers
eventuating in a collapse of the currency.
The US economy lives like a parasite off its partners in the global system, with virtually no savings of its own. The World
produces whilst North America consumes. The advantage of the US is that of a predator whose advantage is covered, by what others
agree, or are forced, to contribute.
Washington uses various means to make up for its deficiencies: for example, repeated violations of the principles of liberalism,
arms exports, and the hunting-down of oil super-profits (which involves the periodic felling of producers; one of the real motives
behind the wars in Iraq and Central Asia).
But the fact is that the bulk of the American deficit is covered by capital inputs from Europe and Japan, China and the South,
rich oil-producing countries and comprador classes from all regions, including the poorest, in the third world, to which should
be added the debt-service levy that is imposed on nearly every country in the periphery of the global system. The US superpower
depends from day to day on the flow of capital which sustains its economy and society. The vulnerability of the United States
represents a serious danger to Washington's project." [
11 ]
In light of the above we may conclude that – in spite of the irritating name-dropping – Rickards' books are interesting well written
and well-argued; per contra they are very light on facts which have been left deliberately unexamined as well as counter-narratives
which have also been ignored.
This was to be expected quite simply because at bottom Rickards is a sophist much in the tradition of Protagoras, Gorgias
and Thrasymachus "I say that justice is nothing other than the advantage of the stronger" [
12 ]
A view which Rickards would certainly endorse. Beneath the Upper Manhattan, polished chic, there resides a ruthless Cold Warrior.
The further one digs into the book, the more this becomes apparent.
NOTES:-
[1] Rickards – Aftermath – page.21
[2] Ibid., – page.65
[3] Michael Hudson – Super Imperialism – pp.298/99, 32.
[4] Rickards – Ibid. – page.66
[5] Hyman Minsky's theories about debt accumulation received revived attention in the media during the subprime mortgage crisis
of the late 2000s. The New Yorker has labelled it "the Minsky Moment". Minsky argued that a key mechanism that pushes an economy
towards a crisis is the accumulation of debt by the non-government sector. He identified three types of borrowers that contribute
to the accumulation of insolvent debt: hedge borrowers, speculative borrowers, and Ponzi borrowers.
The "hedge borrower" can make debt payments (covering interest and principal) from current cash flows from investments. For
the "speculative borrower", the cash flow from investments can service the debt, i.e., cover the interest due, but the borrower
must regularly roll over, or re-borrow, the principal. The "Ponzi borrower" (named for Charles Ponzi, see also Ponzi scheme) borrows
based on the belief that the appreciation of the value of the asset will be sufficient to refinance the debt but could not make
sufficient payments on interest or principal with the cash flow from investments; only the appreciating asset value can keep the
Ponzi borrower afloat.
[6] Rickards – Ibid., page.85
[7] Rickards – Ibid., page.239
[8] Joseph Stiglitz – The Roaring 90s – pp.206/207
[9] Gold Pool 1968. The price of one troy ounce of gold was pegged to US$35. The larger the gap, known as the gold window,
between free market gold price and the foreign exchange rate, the more tempting it was for nations to deal with internal economic
crises by buying gold at the Bretton Woods price and selling it in the gold markets. It couldn't last and it didn't.
[10] Michael Hudson – Ibid. – p.309
[11] Barry Eichengreen – Exorbitant Privilege – passim.
Frank Lee left school at age 15 without any qualifications,
but gained degrees from both New College Oxford and the London School of Economics (it's a long story). He spent many years as a
lecturer in politics and economics, and in the Civil Service, before retirement. He lives in Sutton with his wife and little dog.
Guy
Excellent article by Frank Lee. Many of us are aware of the problems of the USD but few are able to so succinctly explain
why and connect the dots to expose the true picture. The bottom line is that the lifespan of the USD as king is almost over
.There will not be any rabbit pulled out of the hat to make America great again.That is a feel good cliché used to further
induce the population to go back to sleep.
The US has been exposed, and so well said, as a predator nation .There must be a reason why China and Russia are buying
up as much gold as their economy will permit .The exchange medium used for trade since time immemorial .
FoodBowl
Measuring 'National Debt as a Portion of the US Economy' is for economics classes and for newspapers to publish. The Criminal
Elites look at things differently. They measure the National Debt as a Portion of the 'FEROCIOUS BOMBING POWER the US Possess'.
Also, 'Spreading Chaos Capabilities' is added to the Bombing Power.
From this point of view, they see enormous assets, and the debts becomes less worrying as they see less urgency to deal with
this ever growing liabilities.
Fair dinkum
No analysis required because it's always been the same. The few exploit the many. This has fed the cancers of psychopathy, messiah
complexes and endless wars.
We are rushing towards the midnight sun.
MASTER OF UNIVE
The Wall Street ethos has always been 'kill or be killed' where bears eat, and bulls eat, but pigs get slaughtered! The problem
with today's market & stock valuations is that they are as hyperinflated as Real Estate Commercial & Residential sectors are which
leaves no wiggle room for price discovery until there is a system wide crash that mean reverts the valuations back to a realistic
price.
Warren Buffett is currently sitting on $55 billion in cash so that he does not get destroyed on the upcoming systemic wide
crash. Buffett has never pulled this kind of bread from the table in his lifetime whilst waiting for a systemic crash & the inevitable
fat tail blowout that is poised to rip the face off of the USA & EU as their eyeballs get ripped out too.
Ripping a face off & ripping eyeballs out is day trader speak for kicking counterparties in the groin for the deal. The French
Revolution was all about teaching the financial elite predator class of monetary control freaks who the boss really is when the
gravy train slows during Financial Winter.
And if they can't take the heat they should get out of the kitchen!
RW
mark
All that is happening now is that Trump is trying to solve his country's intractable economic and financial problems by looting
the rest of the planet. This is not a new development, but Trump is at least refreshingly honest in his public pronouncements.
It has always been thus.
The Roman Empire imposed tribute on its subjects. You have to send us so much grain, cattle, so many slaves, so much timber
for shipbuilding, so much precious metal and base metal, so many wild beasts for our circuses. In return we won't kill you.
The Nazi Empire imposed tribute on its conquests in identical fashion. Send us your industrial output, agricultural
produce and raw materials. In return we'll give you a big credit balance at the Reichsbank.
Uncle Sugar says send me your BMWs, fine wines, electronic gadgets, oil and minerals. In return I'll give you some worthless
little pieces of green paper you can exchange for worthless IOUs called Treasury Bills.
The current (real) military budget is $1,134 billion, around 60% higher than the fictitious figure that is normally touted.
The trade deficit is $900 billion. The budget deficit $1,175 billion, over 20% of the overall budget.
America is borrowing around $4 billion a day from the rest of the world. Uncle Sam is the biggest scrounger, parasite, leech,
bludger, and panhandler in the history of the planet.
The official national debt of $22.5 trillion understates the true position by a factor of over ten. Every US man, woman, child,
and babe in arms is in hock to the tune of over $700,000.
The global economy is about to crash, yet again (because it's never really recovered from the 2008 crash)'. Answers on a postcard,
please (and one that doesn't involve giving the banksters eye-watering amounts of money).
Frank Lodge
Without reading the book in question, this seems like an thoroughly sound and incisive review. Just one thing, "cometh" takes
a singular subject.
BigB
Rickards attitude is famously: "Buy gold" to which he creates a fear porn scenario around the coming recession. His solution:
"Buy gold". Not, lets look at the conditions that are causing the underlying boom and bust business cycles and find a solution
that works for humanity. His solution: "Buy gold" which the likes of he and the others who are driving the business cyclical waves
of mutilation have already done to hedge their portfolios. Fuck Ricards. I have no time for those who wish to profit from the
overfinancial immiseration of humanity. And you know where you can stick your gold.
Good luck to anyone who produces gold in an actual collapse scenario. So you need to buy guns and bodyguards for self-protection
if you buy gold...
mark
Gold could form some kind of basis for exchange in a collapse setting. Other desirable barter items would be alcohol, cigarettes,
basic drugs like aspirin and paracetamol, electrical batteries, fuel and similar goods. Maybe ammunition as well. Goods were priced
in cigarettes in postwar Germany.
Gold would probably be of use. Gemstones, jewellery, would not. 99.9% of people are unable to distinguish a real diamond from
a piece of glass.
bevin
"he original version of the Guns versus butter argument was given in a speech on January 17, 1936, in Nazi Germany." Not for the
first time Wikipedia is wrong here. Bismarck is normally credited with the choice between Guns and Butter. Goebbels was suggesting
that Guns will bring Butter.
Martin Usher
Its nice to see this in a book but its really common knowledge. The only thing I'd dispute is this notion of an 'elite', there
is no such thing, its just greed holding the reins -- its like a mass FOMO, nobody's willing to take the long view because it
might mean they'll miss out on what they can grab right now.
The danger we face from this is that if a large enough economic bloc runs by more rational rules then its going to eventually
cream us economically. This forces us to destroy it. This is what's at the bottom of our problems with China. The USSR wasn't
strong or well organized enough to pose a real threat to us so it could be taken down primarily by economic means. The Chinese
learned their lesson from the Russian experience and 'played nice' which they built their country up -- we all heard the commentariat
from a few years ago about them 'not really being communists any more'. Now they're in a position to look us in the eye so we've
got to confront them, to take them down. (You'll notice that one of the conditions that will end the trade war is the 'liberalizing
of capital markets' -- that is, we need to take over their banking system and currency.) If -- when -- this fails then the only
recourse would be actual war.
The crime in all this is in the pursuit of money -- ultimately a wholly artificial concept -- we're wasting immense amounts
of resources and human potential, spreading misery and despoliation all over the planet and generally behaving like really awful
global citizens. We can and must do better.
wardropper
And we certainly must stop talking about "taking down" the Chinese, and instead actually try to understand where they come from,
with their roots in a far more ancient civilized society than ours.
American exceptionalism, for example, takes it for granted that we in the West are good, and therefore the East must become
more like us. But we are logically, and morally, obliged to look at this from the opposite perspective too: What if the Chinese
take it for granted that they are good, and therefore the West must become more like them?
I have been to China, and found the people there to consist of the same mixtures of honest, good, nondescript, sinister and
deplorable as we have here at home.
They also share exactly the same fundamental problem as we do: Their politicians and their people, like ours, are two entirely
separate things. Of course the origins of Chinese, or Russian, society are different from ours, but that is no reason to despise
them. Our origins are often pretty despicable too.
Antonym
The Chinese people are as materialistic or spiritual as any; it is the local deep state (CPC) totalitarian culture that needs
to change.
Robbobbobin
"The crime in all this is in the pursuit of money -- [w]e can and must do better."
Three thousand years?
He that loveth silver shall not be satisfied with silver; nor he that loveth abundance with increase: this is also vanity.
–Ecclesiastes 5:10
Two thousand years?
For the love of money is the root of all evil –1 Timothy 6:10
Surely the Anti Deceased Equine Distress Society has lobbied some sort of statute of limitations onto the books by now?
MASTER OF UNIVE
American parasitism writ large over the last half century has amply signified to the entire world that 'manifest destiny'
was merely a ruse to foist American hegemony onto all sovereign nations at the behest of an out-of-control American Oligopoly
that was power-tripping post WW2 & drunk on the souls of the poor sots all over the entire world with their power hungry warmongering
Military Industrial Complex.
Proof of their combined ignorance with respect to Cybernetics & Systems Theory was their willingness to follow the likes of
the Vietnam War architects that assumed incorrectly that they could impose a closed-looped cybernetic control system over world
finance & mercantilism throughout the entire world at the behest of academic failures like Macnamera who would not know a 'closed-looped
cybernetic' from an open-looped cybernetic if his life & legacy depended on it.
Simply put, American printing presses at the privately owned Federal Reserve cannot even remotely help or assist in anymore
financial profligacy for the Neoconservative or Neoliberal camps of the cerebrally sclerotic & Early Onset Dementia riddled, &
uneducated, financial buffoons that emanated out of the now defunct Chicago School headed up by Strauss et al. in the 60s & 70s.
All the macroeconomic indicators over the last two decades have clearly indicated that the Greenspan era of asset inflation
was nothing more than the undoing of Federal Reserve Chair Paul Volcker's hard won success during his tenure pre-Greenspan 'Maestro'
halcyon days of animal spirits run amok.
In brief, the United States of America can eat my shorts as it is solely responsible for manufacturing a finance control system
& requisite money pump fraud that is nothing more than a worldwide Ponzi scheme to defraud the entire world of disposable income
& discretionary income gain so that all gains accrue to the rentier class of speculative investors like Warren Buffett & Bob Paulson.
Bottom line is that Warren Buffett will have to purchase all the new automobiles, trucks, houses, mansions, cottages, farms,
cites, towns, railroads, roads, & precious metals as the emerging markets & first world markets all decouple just as Professor
Emeritus Benoit Mandelbrot hypothesized they would just before he died.
Go ahead, America, print the fake fiat greenbacks to infinity in vain hope of extricating yourselves from the intractable financial
muck & mire you are most assuredly going to find yourselves in this approaching October 2019.
Go ahead, Punk, make my day!
Are you feeling lucky, Punk?
RW
Martin Usher
Its not "American". We just happen to be the chosen host for this part of history. Before us it was the British Empire that
was top dog.
Money has no particular loyalty to a country. In pre-WW1 Europe the bourgeois were all intermarried, connected primarily by
wealth and power regardless of their nominal nationality, our present equivalent are similarly connected. Just like WW1 when the
chips are down we -- the ordinary people -- will be sacrificed on the alter of patriotism while they'll survive and prosper.
MASTER OF UNIVE
March 10th 2008 around 11:00am Bear Stearns time New York shitty was the virtual end of American hegemony worldwide forever more
into the obvious future of Macroeconomics & Macroprudential Policy as an ongoing concern. Debt-to-GDP of all sovereign Western
imperialist nations is intractably North of any semblance of sustainability vis-a-vis Finance worldwide or within Emerging Economies
or First World Developed Economies.
Intractable debt limits were broached when Nixon declared the bankruptcy of the Bretton Woods infrastructure of gold backed
USA Reserve Currency Status and then opted in ignorance for the petro-dollar bait & switch fiat USD Finance capture worldwide
which has now come home to roost across the rust belt of the heartland USA, and in places that were once bastions of manufacturing
for the middle class USA blue collar worker such as Detroit or Chicago. Today the business model of the USA is transnationalist
whereby places across the USA are not even remotely financed into that transnationalist Wall Street model of Finance that is wholly
parasitic to the point of crashing mainstreet USA across all sectors of the Service Sector Industries that were supposed to be
replacing the long lost USA Manufacturing Base that was offshored to the Third World sovereigns that would temporarly increase
profit margins for the transnationalist class of corporate parasites run amok to collectively destroy all life on Planet Earth
for centuries to come if we are lucky.
RW
martin
You have made the common mistake of asserting that it is America, instead of those who govern (the USA and its pundits)
that have engineered the problems you point out.
Why would the two parties in congress (Article II followers) and the two fellows with the Article II power, continue to [expand
the debt in fake, made up and useless expenses], unless they were controlled by external forces?
Maybe bankers and their high powered corporations are finding they can no longer easily dupe Americans into delivering their
resources into the pockets of the wealthy. Maybe the American people have drawn the line, no more, will they produce for the IMF,
world bank?
Maybe Americans have decided to refuse the tax burdens imposed to retire the fed debt? Maybe foreign nations have denied the
banks and their corporations access to their resources as a means to pay the USA debt? Maybe script has been recognized as a false
capital in-capable of ruling the world? Maybe organized criminals have taken up positions in the western governments and used
those positions to force on the governed many things? Maybe burdening the USA with debt is part of the plan to bankrupt America?
<==but why should the banks bankrupt America, why has access to education been limited, why has the USA spied on Americans? Why
have the governed Americans been denied access to the USA? Has the USA retired Americans from productive jobs, in order to accelerate
the demise of America? The USA has made Americans into debtors obligated to pay bankers in the form of taxes to be collected by
the USA and remitted to the bankers. <= just as is now occurring in Britain, Greece, France, and other places. Privatization,
monopolization and conversion from public to private franchising and ownership have served as the transforming agents that have
made the elite so wealthy.
Economic Zionism. as opposed to government regulated capitalism, condones no competition, allows no prisoners and either
takes or destroys all likely competitive elements (persons, corporations, or nations) Economic Zionism demands the government
that governs (as in USA governance over Americans) assist in rendering Americans broke. Is it because until Americans are broke,
the EZ bandits are hampered? Is scooping resources into private, monopoly powered, already wealthy hands, the goodies to be had
the goal? Maybe the USA is a privatizing agent instead of a benefactor serving Americans?
In USA governed America, there is much very-productive farm land, millions of tons of minerals, many productive seaports, and
tons and tons of money making monopolies (patents, copyrights, royalties, government franchised goodies, lucrative government
contracts, and plenty of government services and resources) to be privatized for profit. The goodies are located in thousands
of acres of rich farmland, the major ports and services attached thereto, and embedded within little domestic American companies
which the USA debt will eventually burden into bankruptcy. After all "scalping a bankruptcy" is historically a speciality of economic
zionism.
MASTER OF UNIVE
In 1994 JPMorgan management & traders went on a little holiday in Miami to concoct the Global Ponzi of debt & risk associated
with loans into what is known today as the Financialization Process whereby bank risk would be shuffled off of investment bank
balance sheets and onto those speculators that wanted to purchase all that risk involved in the bank portfolios en masse because
they knew how to offload that risk to unsuspecting greater fools that were always certain to come knocking in a climate of upward
growth and yield curve convexity. But the chink in their financial alchemy was obviously debt limits and the ability to track
the risk to the system as a whole given that all transactions in the derivatives world are dark & unregulated due to the helmsmen
like the Treasury Secretary Henry Paulson who previous to being nominated as Treasury Secretary was in fact the top man at Goldman
Sachs where he raked in approximately a smooth billion before traversing the revolving door between the Whore House & Goldman
Sachs New York shitty offices.
Casino Banking morphed into Late Stage Ponzi Capitalism when Bob Paulson wanted more Residential Mortgage Backed Security issuance
and pressured Goldman Sachs into providing more issuance via NINJA loans & Liar Loans after 05 when the Wall Street speculators
had to go bottom feeding for loan issuance in order to meet investor demand & apatite for their unhinged Gordon Gecko greed.
'Maestro' Greenspan emphasized his 'flaw' in his macroeconomic model of the world when the investor greed broached fat tails
on the order of a 10% crash of the power laws of distributions of loan issuance. Greenspan never assumed that the Financialization
Process would exceed a default scenario greater than 5-7% of no-performing loans in the subprime issuance tranche.
American exceptionalism via Henry Paulson USA Treasury Secretary 08 is what rendered American Late Stage Ponzi Capitalism wholly
defunct going forward into 2020 & beyond with a permanent lower bound CB Interest Rate Regime & specter of WW3 hot conflagration.
My money is on the pinko Commie bastards this time round the sovereign insolvency loop of domestic misery USA.
WELCOME to the New World Disorder!
RW
nottheonly1
To condense this lengthy essay: This ship is sinking.
This would include household debt, student debt, financial debt, corporate debt, and municipal debt. Add this to sovereign
debt and you get a figure roughly 5 times US sovereign debt, and even this is regarded as being a conservative figure according
to many
One – at least on this side of the screen – cannot but think that all this is by design. The cart is driven intentionally off
the cliff. To start off with a clean slate? Where the wealthy still have their wealth, but the suckers are depending on hand-outs?
An old proverb alledges that: To borrow brings sorrow.
To which only those who make loads of money from lending will disagree. Where are the solutions? No solutions, just listicles
as to how bad it all is? Sure, the West is reminiscent of the HMS Titanic – with the slight difference of the hole made by the
iceberg (debt) extending over the whole length of the ship. It is listing beyond dancing.
Well, I am willing to tell a secret (that isn't one anymore for quite some time):
Outlaw/prohibit Interest .
Prohibit capital gains . Or tax them with 99%.
Prevent under all circumstances a continuation of Performanceless Profits .
Make them punishable with prison time of no less than half of the age at which they were perpetrated. You're 30? You're going
in for 15. You're 65? Easy math.
Fact is, that there are solutions galore to save our souls. Problem is, those whose lives are depending on them, don't demand
them to be implemented. And why would the wealthy tax non-payers like Bezos et al want to change their 'winning team'? That is
a well known no-no. The only solution the masses of the little people can hope for is 'Force Majeur' that works to their benefit.
Shall we wait for that to happen?
September 9, 2019
IMF: Firms avoiding tax through 'phantom FDI' worth $15 trillion
By Nicholas Moore
International tax havens are being used to funnel phantom investments worth the same as
the combined annual GDP of China and Germany, according to a new study published by the
International Monetary Fund (IMF) which sheds light on how tax-dodging multinationals are
skewing global foreign direct investment (FDI) data.
The research, conducted by the IMF and the University of Copenhagen using data from the
Organisation for Economic Co-operation and Development (OECD), shows that 38 percent of
global FDI is "phantom in nature – investments that pass through empty corporate
shells."
That 38 percent slice of FDI is worth around 15 trillion U.S. dollars. Eighty-five percent
of that huge sum passes through just 10 economies, including Ireland, the Netherlands, Hong
Kong Special Administrative Region, Singapore and Switzerland – all regions with low
corporate tax rates.
Luxembourg, a country with a population of 600,000, hosts more FDI than the entire Chinese
economy, according to the study. At four trillion U.S. dollars, that's 6.6 million U.S.
dollars for each Luxembourger.
Of course, that money isn't going into the pockets of each and every Luxembourger, and
it's not being spent on investment projects in the principality. But why is such a huge sum
passing through the tiny European state?
The study found that phantom investments are a form of financial and tax engineering "to
minimize multinationals' global tax bills." And while corporate shells bring in large sums to
their host countries through company registration fees and providing financial services, the
huge amounts of money involved mean significant tax income losses for countries around the
world.
The report says the phantom FDI phenomenon affects "virtually all economies," no matter
their size or level of development. Across all economies (advanced, emerging markets,
low-income and developing), average outflows towards overseas shell firms represent 25
percent of total FDI.
Phantom investments are not new, and despite increasing international coordination against
the phenomenon, their share of total FDI has grown by around eight percent in the past
decade.
Beyond damaging the tax bases of countries around the world, phantom FDI is also heavily
distorting headline data. Genuine FDI should act as an indicator of international economic
integration, in terms of job creation as well as productivity. But with phantom FDI
representing nearly 40 percent of all overseas investment, the data could mislead
policymakers and skew economic outlooks.
For the tax havens, the huge influx of money towards shell companies also heavily skews
their own data. When Ireland saw its GDP grow by 26 percent in 2015, The Irish Times said
while it may be a statistical fact, the huge growth was "clearly a fiction."
Huge multinational companies like Apple, Google and Facebook have registered assets in
Ireland for tax reasons. As the Irish Times reported, having such assets registered in
Ireland had a limited effect on the economy, but its "impact on the different components of
our economic data is explosive."
The IMF report calls for more international cooperation on "dealing with taxation in
today's globalized economic environment." However, calls from leaders such as French
President Emmanuel Macron for stronger oversight of multinationals and their use of tax
havens have mostly fallen on deaf ears.
Macron called for a global tax on tech giants at the G7 Summit last month, describing as
"crazy" the current setup which gives multinationals "a permanent tax haven status." However,
the U.S. President Donald Trump is firmly against such legislation, after what Macron
described as "very strong lobbying" by American tech giants.
Krugman -- the father of Abenomics -- is tactitly admitting his keynesian ideology is
wrong. Now, all that is left is for him to openly defend austerity and we have a new liberal
consensus for at least the next decade. Keynesianism will enjoy the glory of being the first
liberal ideology to die twice -- first in 1974-5 (stagflatio) which gave birth to the
neokeynesians and the post-keynesians -- and now, with the zombification of Japan and, soon,
South Korea in NE Asia (the "Asian Tigers").
South Korea has a new motto: low growth, low interest rate and low inflation.
South Korea is going the way of Japan. No wonder, since South Korea is a bad carbon copy
of Japan. This explains why Moon Jae-in is trying to link his North-South peace efforts to a
new boom of the South's economy. That's also why the South's reject the North's "one country,
two systems" reunification proposal -- those chaebols need that cheap natural resources and
workforce from the North to initiate a new accumulation cycle of South Korean capitalism.
That's some hundreds of millions of USDs down the drain, which is bad for a country were
one third of its population doesn't even have access to electricity.
I could quote some Marxist articles here to demonstrate Mnuchin is factually wrong. But
I'll be merciful to the anti-marxists in this blog this time and quote a bourgeois economist
who's at least honest in this specific issue:
"... The real unemployment rate is probably somewhere between 10%-12%. ..."
"... The U-6 also includes what the labor dept. calls involuntary part time employed. It should include the voluntary part time as well, but doesn't (See, they're not actively looking for work even if unemployed). ..."
"... But even the involuntary part time is itself under-estimated. I believe the Labor Dept. counts only those involuntarily part time unemployed whose part time job is their primary job. It doesn't count those who have second and third involuntary part time jobs. That would raise the U-6 unemployment rate significantly. The labor Dept's estimate of the 'discouraged' and 'missing labor force' is grossly underestimated. ..."
"... The labor dept. also misses the 1-2 million workers who went on social security disability (SSDI) after 2008 because it provides better pay, for longer, than does unemployment insurance. That number rose dramatically after 2008 and hasn't come down much (although the government and courts are going after them). ..."
"... The way the government calculates unemployment is by means of 60,000 monthly household surveys but that phone survey method misses a lot of workers who are undocumented and others working in the underground economy in the inner cities (about 10-12% of the economy according to most economists and therefore potentially 10-12% of the reported labor force in size as well). ..."
"... The SSDI, undocumented, underground, underestimation of part timers, etc. are what I call the 'hidden unemployed'. And that brings the unemployed well above the 3.7%. ..."
The real unemployment rate is probably somewhere between 10%-12%. Here's why: the 3.7% is
the U-3 rate, per the labor dept. But that's the rate only for full time employed. What the
labor dept. calls the U-6 includes what it calls discouraged workers (those who haven't looked
for work in the past 4 weeks). Then there's what's called the 'missing labor force'–i.e.
those who haven't looked in the past year. They're not calculated in the 3.7% U-3 unemployment
rate number either. Why? Because you have to be 'out of work and actively looking for work' to
be counted as unemployed and therefore part of the 3.7% rate.
The U-6 also includes what the labor dept. calls involuntary part time employed. It
should include the voluntary part time as well, but doesn't (See, they're not actively looking
for work even if unemployed).
But even the involuntary part time is itself under-estimated. I believe the Labor Dept.
counts only those involuntarily part time unemployed whose part time job is their primary job.
It doesn't count those who have second and third involuntary part time jobs. That would raise
the U-6 unemployment rate significantly. The labor Dept's estimate of the 'discouraged' and
'missing labor force' is grossly underestimated.
The labor dept. also misses the 1-2 million workers who went on social security
disability (SSDI) after 2008 because it provides better pay, for longer, than does unemployment
insurance. That number rose dramatically after 2008 and hasn't come down much (although the
government and courts are going after them).
The way the government calculates unemployment is by means of 60,000 monthly household
surveys but that phone survey method misses a lot of workers who are undocumented and others
working in the underground economy in the inner cities (about 10-12% of the economy according
to most economists and therefore potentially 10-12% of the reported labor force in size as
well). The labor dept. just makes assumptions about that number (conservatively, I may
add) and plugs in a number to be added to the unemployment totals. But it has no real idea of
how many undocumented or underground economy workers are actually employed or unemployed since
these workers do not participate in the labor dept. phone surveys, and who can blame them.
The SSDI, undocumented, underground, underestimation of part timers, etc. are what I
call the 'hidden unemployed'. And that brings the unemployed well above the 3.7%.
Finally, there's the corroborating evidence about what's called the labor force
participation rate. It has declined by roughly 5% since 2007. That's 6 to 9 million workers who
should have entered the labor force but haven't. The labor force should be that much larger,
but it isn't. Where have they gone? Did they just not enter the labor force? If not, they're
likely a majority unemployed, or in the underground economy, or belong to the labor dept's
'missing labor force' which should be much greater than reported. The government has no
adequate explanation why the participation rate has declined so dramatically. Or where have the
workers gone. If they had entered the labor force they would have been counted. And their 6 to
9 million would result in an increase in the total labor force number and therefore raise the
unemployment rate.
All these reasons–-i.e. only counting full timers in the official 3.7%;
under-estimating the size of the part time workforce; under-estimating the size of the
discouraged and so-called 'missing labor force'; using methodologies that don't capture the
undocumented and underground unemployed accurately; not counting part of the SSI increase as
unemployed; and reducing the total labor force because of the declining labor force
participation-–together means the true unemployment rate is definitely over 10% and
likely closer to 12%. And even that's a conservative estimate perhaps." Join the debate on
Facebook More articles by: Jack Rasmus
Jack Rasmus is author of the recently published book, 'Central Bankers at the End of
Their Ropes: Monetary Policy and the Coming Depression', Clarity Press, August 2017. He blogs
at jackrasmus.com and his twitter handle
is @drjackrasmus. His website is http://kyklosproductions.com .
"... " Fuel to the Fire: How Trump Made America's Foreign Policy Even Worse (and How We Can Do Better) " is a scalding indictment not only of the 45th U.S. president, but also of a morally bankrupt national security establishment whose addiction to empire has embroiled the nation in misbegotten military misadventures. ..."
"... Glaser, Preble and Thrall see Trump -- the "least informed, least experienced, and least intellectually prepared U.S. president in modern memory" -- as more bark than bite. True, he has altered specific U.S. positions on trade (more protectionism), immigration (greater closure) and human rights (deafening silence). But, on balance, they perceive a depressing continuity between Trump's foreign policy and what preceded it. Abetted by an invertebrate Congress and emboldened by the military-industrial complex, Trump has doubled down on the imperial presidency, on inflated threat perceptions, on defense spending and on the pursuit of global domination. In so doing, they claim, Trump is setting a course for continued interventionism that is at odds with U.S. ideals and dangerous to American liberty. ... ..."
In a provocative new book, three scholars from the
libertarian Cato Institute -- John Glaser, Christopher A. Preble and A. Trevor Thrall --
counsel the United States to abandon the pursuit of global primacy for a policy of prudence and
restraint. " Fuel to the Fire: How
Trump Made America's Foreign Policy Even Worse (and How We Can Do Better) " is a scalding
indictment not only of the 45th U.S. president, but also of a morally bankrupt national
security establishment whose addiction to empire has embroiled the nation in misbegotten
military misadventures. American foreign policy professionals may cast the United States as
a benevolent hegemon, defending the liberal or "rules-based" international order. But this
self-serving argument is hard to take seriously, they write, given the hubris, hypocrisy and
coerciveness of the American imperium.
The most surprising argument in "Fuel to the Fire" is that this misguided orientation has
persisted under Donald Trump. This seems counterintuitive. Washington's mandarins have recoiled
in bipartisan horror as the president dismantles their handiwork and pursues his "America
First" agenda. Glaser, Preble and Thrall see Trump -- the "least informed, least
experienced, and least intellectually prepared U.S. president in modern memory" -- as more bark
than bite. True, he has altered specific U.S. positions on trade (more protectionism),
immigration (greater closure) and human rights (deafening silence). But, on balance, they
perceive a depressing continuity between Trump's foreign policy and what preceded it. Abetted
by an invertebrate Congress and emboldened by the military-industrial complex, Trump has
doubled down on the imperial presidency, on inflated threat perceptions, on defense spending
and on the pursuit of global domination. In so doing, they claim, Trump is setting a course for
continued interventionism that is at odds with U.S. ideals and dangerous to American liberty.
...
Thomas Piketty's New Book Brings Political Economy Back to Its Sources
By Branko Milanovic
In the same way that Capital in the Twenty-First Century transformed the way economists
look at inequality, Piketty's new book Capital and Ideology will transform the way political
scientists look at their own field.
Thomas Piketty's books are always monumental. Some are more monumental than others. His Top
Incomes in France in the Twentieth Century: Inequality and Redistribution,
1901–1998(published in French as Les hauts revenus en France au XXe siècle)
covered more than two centuries of income and wealth inequality, in addition to social and
political changes in France. His international bestseller Capital in the Twenty-First
Century(Le capital au XXI siècle) broadened this approach to the most important
Western countries (France, the United States, United Kingdom, and Germany). His new book
Capital and Ideology (to be published in English in March 2020; already published in France
as Capital et idéologie) broadens the scope even further, covering the entire world
and presenting a historical panorama of how ownership of assets (including people) was
treated, and justified, in various historical societies, from China, Japan, and India, to the
European-ruled American colonies, and feudal and capitalist societies in Europe. Just the
mention of the geographical and temporal scope of the book suffices to give the reader an
idea of its ambition.
Before I review Capital and Ideology, it is worth mentioning the importance of Piketty's
overall approach, present in all three of his books. His approach is characterized by the
methodological return of economics to its original and key functions: to be a science that
illuminates the interests and explains the behaviors of individuals and social classes in
their quotidian (material) life. This methodology rejects the dominant paradigm of the past
half-century, which increasingly ignored the role of classes and heterogeneous individuals in
the process of production and instead treated all people as abstract agents that maximize
their own income under certain constraints. The dominant paradigm has emptied almost all
social content from economics and presented a view of society that was as abstract as it was
false.
The reintroduction of actual life into economics by Piketty and several other economists
(not entirely coincidentally, most of them are economists interested in inequality) is much
more than just a return to the sources of political economy and economics. This is because
today, we have vastly more information (data) than was available to economists a century ago,
not only about our own contemporary societies but also about past societies. This combination
between political economy's original methodology and big data is what I call "turbo-Annales,"
after the French group of historians that pioneered the view of history as a social science
focusing on the broad social, economic, and political forces that shape the world. The topics
that interested classical political economy and the authors associated with the Annales
School can now be studied empirically, and even econometrically and experimentally -- things
which they could not do, both because of the scarcity of data and unavailability of modern
methodologies.
It is within this context that, I believe, we ought to consider Piketty's Capital and
Ideology. How successful was his approach, applied now to the world and over a very long
time-horizon?
"The dominant paradigm has emptied almost all social content from economics and presented
a view of society that was as abstract as it was false."
For the purposes of this review, I divide Piketty's book into two parts: the first, which
I already mentioned, looks at ideological justifications of inequality across different
societies (Parts 1 and 2 of the book, and to some extent Part 3); the second introduces an
entirely new way of studying recent political cleavages in modern societies (Part 4). I am
somewhat skeptical about Piketty's success in the first part, despite his enormous erudition
and his skills as a raconteur, because success in discussing something so geographically and
temporally immense is difficult to reach, even by the best-informed minds who have studied
different societies for the majority of their careers. Analyzing each of these societies
requires an extraordinarily high degree of sophisticated historical knowledge regarding
religious dogmas, political organization, social stratification, and the like. To take two
examples of authors who have tried to do it, one older and one more recent: Max Weber, during
his entire life (and more specifically in Economy and Society), and Francis Fukuyama in his
two-volume masterpiece on the origins of the political and economic order. In both cases, the
results were not always unanimously approved by specialists studying individual societies and
religions.
In his analysis of some of these societies, Piketty had to rely on somewhat
"straightforward" or simplified discussions of their structure and evolution, discussions
which at times seem plausible but superficial. In other words, each of these historical
societies, many of which lasted centuries, had gone through different phases in their
developments, phases which are subject to various interpretations. Treating such evolutions
as if they were a simple, uncontested story is reductionist. It is a choice of one plausible
historical narrative where many exist. This compares unfavorably with Piketty's own rich and
nuanced narrative in Top Incomes in France in the Twentieth Century.
While I am somewhat skeptical about that first part of the book, I am not skeptical about
the second. In this part, we find the Piketty who plays to his strength: bold and innovative
use of data which produces a new way of looking at phenomena that we all observe but were
unable to define so precisely. Here, Piketty is "playing" on the familiar Western economic
history "terrain" that he knows well, probably better than any other economist.
This part of the book looks empirically at the reasons that left-wing, or social
democratic parties have gradually transformed themselves from being the parties of the
less-educated and poorer classes to become the parties of the educated and affluent middle
and upper-middle classes. To a large extent, traditionally left parties have changed because
their original social-democratic agenda was so successful in opening up education and
high-income possibilities to the people who in the 1950s and 1960s came from modest
backgrounds. These people, the "winners" of social democracy, continued voting for left-wing
parties but their interests and worldview were no longer the same as that of their
(less-educated) parents. The parties' internal social structure thus changed -- the product
of their own political and social success. In Piketty's terms, they became the parties of the
"Brahmin left" (La gauche Brahmane), as opposed to the conservative right-wing parties, which
remained the parties of the "merchant right" (La droite marchande).
To simplify, the elite became divided between the educated "Brahmins" and the more
commercially-minded "investors," or capitalists. This development, however, left the people
who failed to experience upward educational and income mobility unrepresented, and those
people are the ones that feed the current "populist" wave. Quite extraordinarily, Piketty
shows the education and income shifts of left-wing parties' voters using very similar
long-term data from all major developed democracies (and India). The fact that the story is
so consistent across countries lends an almost uncanny plausibility to his hypothesis.
It is also striking, at least to me, that such multi-year, multi-country data were
apparently never used by political scientists to study this phenomenon. This part of
Piketty's book will likely transform, or at least affect, how political scientists look at
new political realignments and class politics in advanced democracies in the years to come.
In the same way that Capital in the Twenty-First Century has transformed how economists look
at inequality, Capital and Ideology will transform the way political scientists look at their
own field.
Branko Milanovic is a senior scholar at the Stone Center on Socio-Economic Inequality at the
Graduate Center, City University of New York.
When the Fed or the ECB raises rates, New Keynesian economic theory predicts that the hike
will eventually lead to a decrease in inflation, and that the path from point A to point B
will inevitably be accompanied by higher unemployment. But my own research suggests that New
Keynesian economic theory is wrong. After all, if the Fed were to raise the short-term rate
slowly and support equity markets with a guarantee to purchase a broad-based exchange-traded
fund at a fixed price, there is no reason why the rate increase should cause higher
unemployment.
----
Roger Farmer dumping on the Fed. Somehow a lot of economists have figured out that 'Uncle
cannot do it later'.
I have a different disagreement. First I note that the Fed always follows the One Year
Treasury, it is in the charts, that chart cannot be avoided. Second, once Treasury has
started the rate cycles, it is all over, we will complete the rate cycle, including a down
turn. This has been the case since 1980, likely earlier.
So, why do we fake it? For what purpose, except to say something stupid like Uncle can fix
it later. We always end up in the same place, imbalances that need correction, Treasury has
to take its losses. All the fakery does no one any good.
The end of Mankiw and his Phillips Curve
Comment on David Glasner on 'Mankiw's Phillips-Curve Agonistes'
Gregory Mankiw starts his history of the Phillips Curve with gossiping and name dropping:
"The economist George Akerlof, a Nobel laureate and the husband of the former Federal Reserve
chair Janet Yellen, once called the Phillips curve 'probably the single most important
macroeconomic relationship.' So it is worth recalling what the Phillips curve is, why it
plays a central role in mainstream economics and why it has so many critics. The story begins
in 1958, when the economist A. W. Phillips published an article reporting an inverse
relationship between unemployment and inflation in Britain. He reasoned that when
unemployment is high, workers are easy to find, so employers hardly raise wages, if they do
so at all. But when unemployment is low, employers have trouble attracting workers, so they
raise wages faster. Inflation in wages soon turns into inflation in the prices of goods and
services."
David Glasner immediately spots the fatal mistake of Mankiw's account: "I must note
parenthetically that, as I have written recently, a supply-demand framework (aka partial
equilibrium analysis) is not really the appropriate way to think about unemployment, because
the equilibrium level of wages and the rates of unemployment must be analyzed, as, using
different terminology, Keynes argued, in a general equilibrium, not a partial equilibrium,
framework." Unfortunately, David Glasner then gets lost in supply-demand-equilibrium
blather.
The Phillips Curve (better: Bastard or NAIRU Phillips Curve) is the centerpiece of
standard employment theory. Economists get employment theory wrong for 200+ years.#1-#5
The materially/formally inconsistent NAIRU Phillips Curve has to be replaced by the
correct macroeconomic Employment Law which is shown on Wikimedia.#6
From this equation follows:
(i) An increase in the expenditure ratio ρE leads to higher employment L (the Greek
letter ρ stands for ratio). An expenditure ratio ρE greater than 1 indicates a budget
deficit = credit expansion, a ratio ρE less than 1 indicates credit contraction.
(ii) Increasing investment expenditures I exert a positive influence on employment.
(iii) An increase in the factor cost ratio ρF=W/PR leads to higher employment.
The complete employment equation contains in addition profit distribution, the public
sector, and foreign trade.
Items (i) and (ii) cover Keynes' familiar arguments about aggregate demand. The factor
cost ratio ρF as defined in (iii) embodies the macroeconomic price mechanism. The fact of
the matter is that overall employment INCREASES if the AVERAGE wage rate W INCREASES relative
to average price P and productivity R. Roughly speaking, price inflation is bad for
employment and wage inflation is good. This is the exact OPPOSITE of what microfounded
supply-demand-equilibrium economics teaches.
The testable Employment Law tells one that the best policy to stabilize employment on a
high level is a price inflation of zero and a wage inflation equal to productivity increases.
The 2 percent inflation target has always been political idiocy based on defective
theory.
It is not vey clear for whom Epstein used to work. Mossad connection is just one hypothesis.
What sovereign state would allow compromising politician by a foreign intelligence service. This
just does not compute.
But the whole tone of discussion below clearly point to the crisis of legitimacy of
neoliberal elite. And Russiagate had shown that the elite cares about it and tried to patch the
cracks.
As Eric
Rasmusen writes: "Everybody, it seems, in New York society knew by 2000 that Jeffrey
Epstein and Ghislaine Maxwell were corrupting teenage girls, but the press wouldn't cover it."
Likewise, everybody in New York society has long known that Larry Silverstein, who bought the
asbestos-riddled white elephant World Trade Center in July 2001 and immediately doubled the
insurance, is a mobbed-up friend of Netanyahu and a confessed participant in the controlled
demolition of Building 7 , from which he earned over 700 million insurance dollars on the
pretext that al-Qaeda had somehow brought it down. But the press won't cover that either.
The New York Times , America's newspaper of record, has the investigative talent and
resources to expose major corruption in New York. Why did the Times spend almost two
decades ignoring the all-too-obvious antics of Epstein and Silverstein? Why is it letting the
absurd tale of Epstein's alleged suicide stand? Why hasn't it used the work of Architects and
Engineers for 9/11 Truth -- including the brand-new University of Alaska study on the controlled
demolition of WTC-7 -- to expose the biggest scandal of the 21 st century, if
not all of American history?
The only conceivable answer is that The New York Times is somehow complicit in these
monstrous crimes. It must be protecting its friends in high places. So who are those friends,
and where are those high places?
One thing Epstein and Silverstein have in common, besides names ending in "-stein," is
alleged involvement in the illicit sex industry. Epstein's antics, or at least some of them,
are by now well-known. Not so for Silverstein, who apparently began his rags-to-9/11-riches
story as a pimp supplying prostitutes and nude dancers to the shadier venues of NYC, alongside
other illicit activities including "the heroin trade, money laundering
and New York Police corruption." All of this was exposed in a mid-1990s lawsuit. But good
luck finding any investigative reports in The New York Times .
Another Epstein-Silverstein connection is their relationships to major American Jewish
organizations. Even while he was allegedly pimping girls and running heroin, Larry Silverstein
served as president for United Jewish Appeal of New York. As for Epstein, he was the boy toy
and protégé of Les Wexner, co-founder of
the Mega Group of Jewish billionaires associated with the World Jewish Congress, the
Anti-Defamation League, and other pro-Israel groups. Indeed, there is no evidence that
"self-made billionaire" Epstein ever earned significant amounts of money; his only investment
"client" was Les Wexner. Epstein, a professional sexual blackmailer, used his supposed
billionaire status as a cover story. In fact, he was just an employee working for Wexner and
associated criminal/intelligence networks.
Which brings us to the third and most important Epstein-Silverstein similarity: They were
both close to the government of Israel. Jeffrey Epstein's handler was Ghislaine Maxwell,
daughter of Mossad super-spy Robert Maxwell; among his friends was Ehud Barak, who is currently
challenging Netanyahu for leadership of Israel. Larry Silverstein, too, has friends in high
Israeli places. According to Haaretz , Silverstein has "close ties with Netanyahu"
(speaking to him on the phone every weekend) as well as with Ehud Barak, "whom Silverstein in
the past offered a job as his representative in Israel" and who called Silverstein immediately
after 9/11.
We may reasonably surmise that both Jeffrey Epstein and Larry Silverstein have been carrying
on very important work on behalf of the state of Israel. And we may also surmise that this is
the reason The New York Times has been covering up the scandals associated with both
Israeli agents for almost two decades. The Times , though it pretends to be America's
newspaper of record, has always been Jewish-owned-and-operated. Its coverage has always been
grotesquely
distorted in favor of Israel . It has no interest in exposing the way Israel controls the
United States by blackmailing its leaders (Epstein) and staging a fake "Arab-Muslim attack on
America" (Silverstein). The awful truth is that The New York Times is part of the same
Jewish-Zionist "
we control America " network as Jeffrey Epstein and Larry Silverstein.
Epstein "Suicide" Illustrates Zionist Control of USA -- and the Decadence and Depravity
of Western Secularism
Since The New York Times and other mainstream media won't go there, let's reflect on
the facts and lessons of the Jeffrey Epstein suicide scandal -- a national disgrace that ought
to shock Americans into rethinking their worldviews in general, and their views on the official
myth of 9/11 in particular.
On Saturday, August 10, 2019, convicted child sex trafficker Jeffrey Epstein was allegedly
found dead in his cell at Metropolitan Correctional Center (MCC) in New York City, one of
America's most corrupt prisons. The authorities claim Epstein hanged himself. But nobody, not
even the presstitutes of America's corporate propaganda media, convincingly pretends to believe
the official story.
Jeffrey Epstein was a pedophile pimp to presidents and potentates. His job was recruiting
young girls for sex, then offering them to powerful men -- in settings outfitted with hidden
video cameras. When police raided his New York townhouse on July 6-7 2019 they found locked
safes full of pornographic pictures of underage girls, along with piles of compact discs
labeled "young (name of girl) + (name of VIP)." Epstein had been openly and brazenly carrying
on such activities for more than two decades, as reported throughout most of that period by
alternative media outlets including my own Truth Jihad Radio and False Flag Weekly News . (Even
before the 2016 elections, my audience knew that both Bill Clinton and Donald Trump were
blackmailed clients of Jeffrey Epstein, that Clinton was a frequent flyer on Epstein's "Lolita
Express" private jet, and that Trump had been credibly accused in a lawsuit of joining Epstein
in the brutal rape of a 13-year-old, to whom Trump then allegedly issued death threats.) It was
only in the summer of 2019 that mainstream media and New York City prosecutors started talking
about what used to be consigned to the world of "conspiracy theories."
So who was Epstein working for? His primary employer was undoubtedly the Israeli Mossad and
its worldwide Zionist crime network. Epstein's handler was Ghislaine Maxwell, daughter of
Mossad super-spy Robert Maxwell. According to sworn depositions, Ghislaine Maxwell recruited
underage girls for Epstein and oversaw his sex trafficking operations. As the New Yorker
reported August 16: "In court papers that were unsealed on August 9th, it was alleged that
Maxwell had been Epstein's central accomplice, first as his girlfriend, and, later, as his
trusted friend and procuress, grooming a steady stream of girls, some as young as fourteen,
coercing them to have sex with Epstein at his various residences around the world, and
occasionally participating in the sexual abuse herself." Alongside Maxwell, Epstein's other
Mossad handler was
Les Wexner, co-founder of the notorious Mega Group of billionaire Israeli spies , who
appears to have originally recruited the penniless Epstein and handed him a phony fortune so
Epstein could pose as a billionaire playboy.
Even after Epstein's shady "suicide" mega-Mossadnik Maxwell continued to flaunt her impunity
from American justice. She no doubt conspired to publicize the August 15 New York Post
photograph of herself smiling and looking "chillingly serene" at In-And-Out-Burger in Los
Angeles, reading The Book of Honor: The Secret Lives and Deaths of C.I.A. Operatives .
That nauseating photo inspired the New
Yorker to accuse her of having "gall" -- a euphemism for the Yiddish chutzpah , a quality
that flourishes in the overlapping Zionist and Kosher Nostra communities.
Maxwell and The New York Post , both Kosher Nostra/Mossad assets, were obviously
sending a message to the CIA: Don't mess with us or we will expose your complicity in these
scandalous crimes. That is the Mossad's standard operating procedure: Infiltrate and compromise
Western intelligence services in order to prevent them from interfering with the Zionists'
over-the-top atrocities. According to French historian
Laurent Guyénot's hypothesis, the CIA's false flag fake assassination attempt on
President John F. Kennedy, designed to be blamed on Cuba, was transformed by Mossad into a real
assassination -- and the CIA couldn't expose it due to its own complicity. (The motive: Stop
JFK from ending Israel's nuclear program.) The same scenario, Guyénot argues, explains
the anomalies of the Mohamed Merah affair
, the Charlie Hebdo killings, and the 9/11 false flag operation. It would not be surprising if
Zionist-infiltrated elements of the CIA were made complicit in Jeffrey Epstein's sexual
blackmail activities, in order to protect Israel in the event Epstein had to be "burned" (which
is apparently what has finally occurred).
So what really happened to Epstein? Perhaps the most likely scenario is that the Kosher
Nostra, which owns New York in general and the mobbed-up MCC prison in particular, allowed the
Mossad to exfiltrate Epstein to Occupied Palestine, where he will be given a facelift, a
pension, a luxury suite overlooking the Mediterranean, and a steady stream of young sex slaves
(Israel is the world's capital of human trafficking, an honor it claimed from the Kosher Nostra
enclaves of Odessa after World War II). Once the media heat wave blows over, Epstein will
undoubtedly enjoy visits from his former Mossad handler Ghislaine Maxwell, his good friend Ehud
Barak, and various other Zionist VIPs. He may even offer fresh sex slaves to visiting American
congressmen.
This is not just a paranoid fantasy scenario. According to Eric
Rasmusen : "The Justice Dept. had better not have let Epstein's body be cremated. And
they'd better give us convincing evidence that it's his body. If I had $100 million to get out
of jail with, acquiring a corpse and bribing a few people to switch fingerprints and DNA
wouldn't be hard. I find it worrying that the government has not released proof that Epstein is
dead or a copy of the autopsy."
But didn't the alleged autopsy reportedly find broken neck bones that are more commonly
associated with strangulation murders than suicides? That controversy may have been scripted to
distract the public from
an insider report on 4chan , first published before the news of Epstein's "suicide" broke,
that Epstein had been "switched out" of MCC. If so, the body with the broken neck bones wasn't
Epstein's.
The Epstein affair (like 9/11) illustrates two critically important truths about Western
secularism: there is no truth, and there are no limits. A society that no longer believes in
God no longer believes in truth, since God is al-haqq, THE truth, without Whom the whole
notion of truth has no metaphysical basis. The postmodern philosophers understand this
perfectly well. They taught a whole generation of Western humanities scholars that truth is
merely a function of power: people accept something as "true" to the extent that they are
forced by power to accept it. So when the most powerful people in the world insist that three
enormous steel-frame skyscrapers were blown to smithereens by relatively modest office fires on
9/11, that absurd assertion becomes the official "truth" as constructed by such Western
institutions as governments, courts, media, and academia. Likewise, the assertion that Jeffrey
Epstein committed suicide under circumstances that render that assertion absurd will probably
become the official "truth" as recorded and promulgated by the West's ruling institutions, even
though nobody will ever really believe it.
Epstein's career as a shameless, openly-operating Mossad sexual blackmailer -- like the
in-your-face 9/11 coup -- also illustrates another core truth of Western secularism: If there
is no God, there are no limits (in this case, to human depravity and what it can get away
with). Or as Dostoevsky famously put it: "If God does not exist, everything is permitted."
Since God alone can establish metaphysically-grounded limits between what is permitted and what
is forbidden, a world without God will feature no such limits; in such a world Aleister
Crowley's satanic motto "Do what thou wilt shall be the whole of the law" becomes the one and
only commandment. In today's Godless West, why should men not "do what they wilt" and
indulge their libidos by raping young girls if they can get away with it? After all, all the
other sexual taboos are being broken, one by one. Fornication, adultery, homosexuality,
sadomasochism, gender-bending all of these have been transformed during my lifetime from crimes
and vices to "human rights" enjoyed by the most liberal and fashionable right-thinking Western
secularists. Even bestiality and necrophilia are poised to become normalized "sexual
identities" whose practitioners will soon be proudly marching in "bestiality pride" and
"necrophilia pride" parades. So why not normalize pedophilia and other forms of rape
perpetrated by the strong against the weak? And why not add torture and murder in service to
sexual gratification? After all, the secret bible of the sexual identity movement is the
collected works of the Marquis de Sade, the satanic prophet of sexual liberation, with whom the
liberal progressivist secular West is finally catching up. It will not be surprising if, just a
few years after the Jeffrey Epstein "suicide" is consigned to the memory hole, we will be
witnessing LGBTQBNPR parades, with the BNPR standing for bestiality, necrophilia, pedophilia,
and rape. (It would have been LGBTQBNPRG, with the final G standing for Gropers like President
Trump, except that the G was already taken by the gays.) The P's, pioneers of pedophile pride
parades, will undoubtedly celebrate Jeffrey Epstein as an ahead-of-his-time misunderstood hero
who was unjustly persecuted on the basis of his unusual sexual orientation.
It is getting harder and harder to satirize the decadence and depravity of the secular West,
which insists on parodying itself with ever-increasing outlandishness. When the book on this
once-mighty civilization is written, and the ink is dry, readers will be astounded by the
limitless lies of the drunk-on-chutzpah psychopaths who ran it into the ground.
Correct me if I am wrong but I thought Lucky Larry only leased the WTC buildings rather than
actually purchased them. I think I have read that his investment was in the region of 150
mill for which he has recouped a whopping 4 bill.
Would you please answer a preliminary question before I put finishing this on my busy agenda?
You stake a fair bit of your credit on what you say about Larry Silverstein and insurance. My
present understanding is that the insurance cover for WTC 1 and 2 was increased as a routine
part of the financing deal he had made for a purchase which was only months old. Not true?
Not the full story? Convince us.
As to WTC 7 my understanding is that he had owned the building for some years and had not
recently increased the insurance. Not true? And when did any clause get into his WTC7
insurance contract which might have had some effect on inflating the payout?
“Trump had been credibly accused in a lawsuit of joining Epstein in the brutal rape of
a 13-year-old, to whom Trump then allegedly issued death threats.)”
The “Katie Johnson” case collapsed in 2016 when it was revealed that
“she” was in fact a middle-aged man, a stringer for the Jerry Springer show. Just
another Gloria Allred fraud.
“a society that no longer believes in god no longer believes in the truth, since god is
the truth….blah blah blah”
This is thin gruel indeed…..just silly platitudes from a muzzie convert. There are at
least 100 billion galaxies in the universe with each galaxy containing as many as 100 billion
stars. And there is no telling how many universes there are. Does anyone really believe
Barrett’s preferred deity takes a time out from running this vast empire to service
Barrett’s yearning for “truth”? Just goes to prove that humans will believe
almost any idea as long as it’s sufficiently idiotic.
“The principal conclusion of our study is that fire did not cause the collapse
of WTC 7 on 9/11, contrary to the conclusions of NIST and private engineering firms that
studied the collapse.”
“It is our conclusion based upon these findings that the collapse of WTC 7 was a
global failure involving the near-simultaneous failure of all columns in the building and
not a progressive collapse involving the sequential failure of columns throughout the
building.”
Speaking of the truth v. parody I’d really rather work on the cause of
Epstein’s death –yes I think he’s dead– suicide or
strangulation ?
There are some things the Justice Dept. could do if they wanted to. Why they apparently
didn’t want to expose the corpse in greater detail, let media view the cell, have
correspondent(s) interview the ex- cellmate of Epstein, et.al just leads to suspicions.
This is something they should have to answer for . That includes AG Barr. Trump could make
it happen–like every thing else– if Barr says no. The President won’t.
Dostoyevsky with his “If God does not exist, everything is permitted.”
overlooked the Jewish God who permits much more when it comes to Jewish gentile relations.
The Jewish God is not limited by the Kant’s First Moral Imperative. The Jewish
God’s moral laws are not universal. They are context dependent according to the
Leninist Who, whom rule.
Not so for Silverstein, who apparently began his rags-to-9/11-riches story as a pimp
supplying prostitutes and nude dancers to the shadier venues of NYC, alongside other
illicit activities including “the heroin trade, money laundering and New York
Police corruption.”
I would like to see more about the beginnings of Silverstein’s career.
Good work Kevin, Irrelevant exactly what Silverstein did in way of insurance.The FACT is
that WTC7 DID NOT FALL due to fires. Neither did WTC1 or 2. The 6 million dollar question
is ‘WHO put the ‘bang’ in the building?’ to bring them down, by
what ever means. Im in favour of nukes for 1 and 2.
Answer that! Why isnt Silverstein arrested? I think Kevin provided the answer in the
article..
I just stumbled onto your article from a link on reddit, r/epstein. You make some
convincing arguments. I was thrilled that you brought 9/11 into this – because the
Epstein “suicide” and how it is being covered reminds me so much of how I felt
after 9/11 and the run-up to the war. -But you lost me at the end with the stuff about
Godless secularism. I’ve read the bible and it is not the answer to what’s
wrong with the world.
Why did the Times spend almost two decades ignoring the all-too-obvious antics of
Epstein and Silverstein? Why is it letting the absurd tale of Epstein’s alleged
suicide stand?
One thing cannot be denied : Epstein was arrested, denied bail and jailed awaiting trail
on a Federal indictment for much the same offence he had pleaded guilty to a decade ago,
which did not involve even a single homicide yet made him universally reviled and in as
much trouble with the legal system as a man could be (almost certain never to get out
again). Epstein was in far more trouble that anyone of his financial resources has ever
been, but then that was for paying for sex acts with young teen girls.
What an awesomely impressive testament to the impunity enjoyed by the Jewish
elite Epstein is. It is no wonder that Larry Silverstein was insouciant about the risks of
a Jewish lightning fraud controlled demolition killing thousands of people in a building he
had just bought and increased the insurance coverage of. After all, it wasn’t
anything serious like paying for getting hundreds of handjobs from underage girls. And it
is not like someone like the Pizzagate nut that fired his AR15 into underground child
molestation complex beneath the Dems restaurant/pedophile centre would take all those WTC
deaths seriously enough to shoot at him just because of inevitable internet accusations of
mass murder. Mr Barrett, why don’t you step up and do it, thereby proving you
believe the things you say .
@NoseytheDuke Yes, he leased the World Trade Center buildings one and two from the Port
Authority of New York and New Jersey. He built World Trade Center building seven, having
acquired a ground lease from Port Authority.
I can’t imagine why you ask this question in a public venue. I found the answer in
less than one minute on the internet.
I assume the insurance policies were for the present value of his net profits for the
duration of the leases.
I recall reading about this guy prior to the event. I believe it was USATODAY . He and a
silent partner had bought the complex with a down of 63million and had it insured for
7billion. I thought it odd that the port authority would let go of the property at the
time.
As the building deficiencies became known afterwards,my thoughts were along the line of
insurance fraud.
I came across a copy of the rand Corp “state of the world 2000” which
accurately describes the scenario and resulting culture of terror as “one possible
future “…. funny how it’s taken all these years to discover this
website.
Indeed, there is no evidence that “self-made billionaire” Epstein ever
earned significant amounts of money.
Good thing that Wexner is Jewish so we can discount the possibility that he was telling
the truth the other month when he said that Epstein stole vast amounts of Wexner money
Alongside Maxwell, Epstein’s other Mossad handler was Les Wexner, co-founder of
the notorious Mega Group of billionaire Israeli spies
Wexner and his fellow Mossad spy Maxwell leaving Virginia Roberts alive to repeatedly
sue them, and use the world”s media to accuse them of sexually abusing, trafficking,
pimping her out to VIPs, and fiming the trysts was a brilliant way to keep everything a
secret.
Mossad handler Ghislaine Maxwell, his good friend Ehud Barak, and various other
Zionist VIPs.
Yes, they are the greatest covert operatives ever.
Epstein’s crimes are simple breaches of etiquette when compared to Silverstein. I
believe the term “Silverstein valleys” has been used to describe the melted
granite discovered beneath the former towers, Silverstein grins widely in interviews, while
so many suffered horribly.
One might even consider the 9/11 deaths to be something of a “holocaust”.
Certainly one of the most evil human beings to have walked the Earth.
@Wizard of Oz Silverstein said he gave the okay for wtc 7 to be “pulled”.
The building was on fire at the time. Either someone wired it to be pulled while it was on
fire and already damaged or it was wired for demolition beforehand. The second scenario
seems a lot more likely. In that case all the insurance contract details are largely
irrelevant to the bigger picture.
The idea that the CIA is somehow independent of Mossad and that Mossad would have to warn
the CIA off of the Epstein matter is implausible to me. Guyenot’s hypothesis tends to
give cover to the CIA in the assassination of JFK by claiming that the CIA plot was set in
motion as some sort of attempt to control JFK and that it was hijacked into an actual
assassination by Mossad. That just isn’t credible.
It’s much more accurate to observe that the CIA was erected by the same zionists
who oversaw the creation of Israel and later the forming of Mossad, and that the two
agencies have been joined at the hip ever since.
@WorkingClass Bad cop good cop. NYT is trying to destroy him . Israel says to him
:” send this , do this ,allow us to do this , increase this by this amount , and we
will make sure that in final analysis you don’t get hurt ”
Trump possibly knows that the only people who could hurt him is the Jewish people of power
.
Has NYT ever criticized Trump for relocating embassy , recognizing Golan, for allowing
Israel use Anerican resources to hit Syria or Gaza , for allowing Israel drag US into more
military involvement. for allowing Israel wage war against Gaza ,? Has NYT ever explored
the dynamics behind abrogation of JCPOA and application of more sanctions?
NYT has focused on Russia gate knowing in advance that it has no merit and no public
traction, Is it hurting Trump or itself ?
People with normal IQ would believe that Epstein killed himself, if the following took
place –
Media day and night asking questions about him from 360 degree of inquiries
1 why the surveillance video were not functioning despite the serious nature of the
charges against a man who could rat out a lot in court against powerful people
2 why the coroner initially thought that Epstein was murdered
3 how many guards and how many fell asleep?
4 who and why allowed the spin story around Epstein brilliance and high IQ build up over
the years ?
5 how does Epstein come to get linked to non -Jews people who have absolute loyalty to
Israel
6 how did Epstein get involved with Jewish leaders ?
7 How did Epstein continue to enjoy seat on Harvard and enjoy social celebrity status after
plea deal ?
8 Why did Wexner allow this man so much control over his asset ?
9 Media felt if terrorism were unique Muslim thing , why media is not alluding to the fact
that pedophilia is a unique Jewish thing ?
10 why the angle of Israel being sex slavery capital and Epstein being sex slave pimp not
being connected ?
11 how death in prison in foreign unfriendly countries often become causus celebre by US
media , politicians , NGO and US treasury – why not this death ?
@Fozzy Bear Not true. A respectable civil rights attorney, Lisa Bloom, handled Katie
Johnson’s case. Shortly before the scheduled press conference at which Johnson was to
appear publicly, she received multiple death threats: “Bloom said that her
firm’s website was hacked, that Anonymous had claimed responsibility, and that death
threats and a bomb threat came in afterwards.”
https://www.vox.com/policy-and-politics/2016/11/3/13501364/trump-rape-13-year-old-lawsuit-katie-johnson-allegation
Johnson folded because she was terrified (and perhaps paid off).
@Twodees Partain In “Body of Secrets” by James Bamford, a newspaper article
from the Truman era is referenced where the OSS, predecessor of the CIA, is described as
“a converted vault in Washington used as an office space for 5 or 6 Jews working to
protect our national secrets” (or similar wording).
Going from memory and gave away my copy of the book….. sorry for the vague
reference, but you can look it up.
@nsa An atheist like “nsa” must concede Dosteovsky’s point from his
novel The Possessed that even for the atheist the concept of God represents the collective
consciousness, highest principles, and ontological aspirations of believers. Given this
sense, “nsa’s” real animus is more than likely an atavistic hatred of
Christians and Muslims, probably for just being alive in his paranoid mind. What imbecility
when this clown cites a multiverse of universes that has no proof and less plausibility for
its existence than the tooth fairy. I’d also bet “nsa” speaks algebra,
too, like the recently deceased mathematical genius, Jeffrey Epstein.
What’s Mr. Wexner’s, Mega’s, and Mossad/CIA’s involvement?
That’s the real question trolls like “nsa” and the Dems and Republicans
alike are crapping in their pants we’ll find out. When evidence starts to cascade out
of their ability to spin or suppress it, things will get interesting. Meanwhile, Fox News
is still doing its best from what I can tell to run cover for 911, now extended to the
suspiciously related perps in the Epstein affair.
“The Epstein affair (like 9/11) illustrates two critically important truths about
Western secularism: there is no truth, and there are no limits. A society that no longer
believes in God no longer believes in truth…..”
“While the Zionists try to make the rest of the World believe that the national
consciousness of the Jew finds its satisfaction in the creation of a Palestinian state,
the Jews again slyly dupe the dumb Goyim. It doesn’t even enter their heads to
build up a Jewish state in Palestine for the purpose of living there; all they want is a
central organisation for their international world swindler, endowed with its own
sovereign rights and removed from the intervention of other states: a haven for convicted
scoundrels and a university for budding crooks.
It is a sign of their rising confidence and sense of security that at a time when one
section is still playing the German, French-man, or Englishman, the other with open
effrontery comes out as the Jewish race.”
More prophetic words were ever spoken or written by any of the statesmen of the
Twentieth Century than these, even though they themselves were insufficient to describe the
horrors that the Zionist state would bring upon the world if left unchecked- and its power
and influence have been unchecked since the 1960’s. The last time that the world
stood up to Zionist power in an appreciable way was during the Suez Crisis.
DOT.. Port loses claim for asbestos removal | Business Insurance https://www.businessinsurance.com › article
› ISSUE01 › port-loses-claim-… May 13, 2001 – The suit sought claim of the Port Authority’s huge cost
of removing asbestos from hundreds of properties ranging from the enormous World Trade
Center complex
DOT…Silverstein knew when he leased WTC 7 that he would have to pay out of pocket
for asbestos abatement removal in WTC 7, multiple millions, which is why the Port Authority
leased it so cheaply.
DOT…In May, 2000, a year before, signing the lease, he already had the design
drawn for a new WTC building. Silverstein had no plans to remove the asbestos as he already
had plans to replace it.
DOT… Larry Silverstein signs the lease just six weeks before the WTC’s twin
towers were brought to the ground by terrorists in the September 11, 2001, attacks.
DOT….After leasing the complex, Silverstein negotiated with 24 insurance
companies for a maximum coverage of $3.55 billion per catastrophic occurrence.
However, the agreements had not been finalized before 9/11.
DOT…..Silverstein tries to sue insurers for double the payout claiming 2
catastrophic occurrences because of 2 planes involved.
DOT….Silver loses that lawsuit but sues the air lines and settles for almost
another billion, $ 750,000,000.
Just another Jew insurance fire folks. He planned on tearing down WTC 7 to begin with.
The only missing DOT is who he hired to set the demolition explosives in WTC 7. Were they
imported from our ME ally?
While people do not agree of detail the main theme is common: government stories explaining
both 9/11 and Epstein death are not credible. And that government tried to create an "artificial
reality" to hide real events and real culprits.
Absence of credible information create fertile ground for creation of myths and rumors,
sometimes absurd. But that'a well known sociaological phenomenon studies by late Tamotsu Shibutani in the
context of WWII rumors ( Improvised News: A Sociological Study of Rumor (1966)).
Now we can interpret famous quote of
William Casey "We'll know our disinformation program is complete when everything the American
public believes is false as an admission of the fact that the government can create artificial
reality" much like in film Matrix and due to thick smoke of propaganda people are simply unable
to discern the truth.
A foreign policy of "maximum pressure" and swagger: tawdry bribes, heavy-handed threats,
and complete failure ..now what group does this remind me of?
US State Dept Program Offers $15 Million to Iran Revolutionary Guards September 4,
2019
The US State Department has unveiled a new $15 million "reward program" for anyone who
provides information on the financial inner workings of Iran's Revolutionary Guard, in an
attempt to further disrupt them.
The program comes after the US declared the Revolutionary Guards "terrorists," but remains
very unusual, in as much as it targets an agency of a national government instead of just
some random militant group.
The Financial Times reports on the farce that is our government's Iran policy:
Four days before the US imposed sanctions on an Iranian tanker suspected of shipping oil
to Syria, the vessel's Indian captain received an unusual email from the top Iran official at
the Department of State.
"This is Brian Hook . . . I work for secretary of state Mike
Pompeo and serve as the US Representative for Iran," Mr Hook wrote to Akhilesh Kumar on
August 26, according to several emails seen by the Financial Times. "I am writing with good
news."
The "good news" was that the Trump administration was offering Mr Kumar several million
dollars to pilot the ship -- until recently known as the Grace 1 -- to a country that would
impound the vessel on behalf of the US. To make sure Mr Kumar did not mistake the email for a
scam, it included an official state department phone number.
The administration's Iran obsession has reached a point where they are now trying to bribe
people to act as pirates on their behalf. When the U.S. was blocked by a court in Gibraltar
from taking the ship, they sought to buy the loyalty of the captain in order to steal it.
Failing that, they resorted to their favorite tool of sanctions to punish the captain and his
crew for ignoring their illegitimate demand. The captain didn't respond to the first message,
so Hook persisted with his embarrassing scheme:
"With this money you can have any life you wish and be well-off in old age," Mr Hook wrote in
a second email to Mr Kumar that also included a warning. "If you choose not to take this easy
path, life will be much harder for you."
Many people have already mocked Hook's message for its resemblance to a Nigerian prince
e-mail scam, and I might add that he comes across here sounding like a B-movie gangster.
Hook's contact was not an isolated incident, but part of a series of e-mails and texts that
he has sent to various ships' captains in a vain effort to intimidate them into falling in
line with the administration's economic war. This is what comes of a foreign policy of
"maximum pressure" and swagger: tawdry bribes, heavy-handed threats, and complete
failure.
The Committee of 300 is an evolution of the British East Indies Company Council of 300. The
list personally last seen included many Windsors (Prince Andrew), Rothchilds, other Royals.
Some of the Americans included some now dead and other still living: George HW Bush, Bill
Clinton Tom Steyer, Al Gore, John Kerry, Netanyahu, lots of bankers, Woolsey (ex CIA),
journalists like Michael Bloomberg, Paul Krugman, activists and politians like Tony Blair,
now dead Zbigniew Brzezinski, CEOs Charles and Edgar Bronfman. The list is long and out of
date but these people control much of what goes on whether good or bad. Their hands are
everywhere doing good and maybe some of this bad stuff.
Given the facts a 10 year-old child could see that the official 911 explanation was totally
flawed. Just three of these facts are sufficient, the 'dancing Israelis', Silverstein
admitting to the 'pull (demolish) it' order and the collapse of steel-framed WTC 7 in
freefall despite not being hit. It is not hyperbole to say that America is a failed state
given that the known perpetrators were never even charged. ZOG indeed.
A respectable civil rights attorney, Lisa Bloom, handled Katie Johnson's case.
"Respectable"?
BWAHAHAHAHAHA!
You do realize that Lisa Bloom is the daughter of Glora Allred and defender of Harvey
Weinstein do you not?
You people are so desperate to try to link Trump to Epstein it's pathetic.
I suggest you go back to your gatekeeping nonsense of trying to discredit the 9/11 Truth
Movement by spreading misinformation about nukes in the towers.
This article stakes out much important ground of information and interpretation Kevin
Barrett. The essay resonates as a historic statement of some of our current predicaments.
What about the comparisons that might be made concerning the mysteries attending the
disappearing corpses of Osama bin Laden and Jeffrey Epstein. And according to Christopher
Ketcham, the release of the High Fivin' Urban Movers back to Israel was partially negotiated
by Alan Dershowitz who played a big role in defending Epstein over a long period.
@anon The ultimate "nutjob quackery" of 9/11 is Phillip Zelikow's 9/11 Commission Report,
a document that stands as a testimony and marker signifying the USA's descent into a mad
hatter's imperium of lies. legend and illusion.
It is getting harder and harder to satirize the decadence and depravity of the secular
West, which insists on parodying itself with ever-increasing outlandishness. When the book
on this once-mighty civilization is written, and the ink is dry, readers will be astounded
by the limitless lies of the drunk-on-chutzpah psychopaths who ran it into the ground
@Kevin Barrett Adding to Junior's comment, I quit reading after you wrote of "credible
accusations" of Mr. Trump being involved "in the brutal rape of a 13 year old." And feminist
shakedown artist Lisa Bloom, daughter of the even more infamous feminist shakedown artist G.
Allred, is your "credible source?" Bloom has about as much credibility as the sicko democrat
women who tried to derail Judge Kavanaugh.
Regardless of how much one might hate Trump (and I'm no Trump supporter) levelling such
unfounded accusations is journalistic malfeasance. Did we elect the Devil Incarnate? Mr.
Barrett, I'm done reading you.
The special relationship between the CIA and the Mossad was driven partly by the efforts of
CIA officer James Angleton . Philip Weiss in his article in Mondoweiss entitled "The goy and
the golem: James Angleton and the rise of Israel." states that Angleton's " greatest service
to Israel was his willingness no to say a word about the apparent diversion of highly
enriched plutonium from a plant in Western Pennsylvania to Israel's nascent nuclear program "
The same program which JFK tried to curtail which efforts may have led to his assassination .
a confessed participant in the controlled demolition of Building 7,
For the love of God, this is stupid. Larry Silverstein was talking about the Fire
Commander , for fuck's sake. The Fire Commander made the decision to pull the
firefighters out of the building because they could not put the fire out and were in
unnecessary danger. That's all he meant. There is not one word in this that has anything to
do with a controlled demolition whatsoever.
In order to believe what the 9/11 Douchers would have you believe about this comment, you
would have to believe that 1) Building 7 was wired for demolition beforehand; 2) That the NYC
Fire Commander somehow knew about this; 3) That the NYC Fire Commander was perfectly okay
with allowing his men to spend hours inside a burning building in which he knew that
explosive charges had already been rigged to blow; 4) That the NYC Fire Commander had the
authority to decide when the charges should be blown and had access to the master switch that
would blow them all; 5) That after 7 hours of attempting to fight the fire, the NYC Fire
Commander (who by now can be nothing but a full-fledged member of the conspiracy) decides,
after briefly consulting with Larry Silverstein, "Oh, the hell with this! Let's just blow up
the building now!", to which Larry Silverstein agrees; 6) That after spending 7 hours in a
burning building that had fires burning randomly throughout it and that had been struck by
multiple pieces of debris, all of the explosive charges and their detonators were still in
perfect working order; 7) That none of the firefighters extensively searching the building
for survivors happened to notice any of the pre-placed explosive charges nor thought it
necessary to report about such; 8) That the NYC Fire Commander then proceeds to "pull" the
building after presumably giving some other order for the men to evacuate, which order was
never recorded because the "pull" order must have meant "blow up the building"; 9) And that
Larry Silverstein, after being part of a massive conspiracy involving insurance fraud,
murder, and arson which, if exposed, would send him to a federal death sentence, just decides
to casually mention all of this in a television interview for all and sundry to see, but it
is only the 9/11 Douchers who pick up on the significance of it.
Does any of this sound remotely believable? Did anyone subscribing to this nonsense stop
to think about the context in which this conversation took place? Do any of you 9/11 Douchers
even care that you're being completely ridiculous and grasping at nonexistent straws in your
vain attempt to establish some sort of case for controlled demolition? Do you even care that
everybody can see that what you are saying makes no sense at all? It is perfectly
obvious that Larry Silverstein is NOT talking about controlled demolition here. To
believe otherwise would require you to literally be insane, to not understand the plain
meaning of words and to have no awareness of conversational contexts; yet not only have you
swallowed all of this, you have been beating the drum of this insanity for nearly 20
years.
There is no point in reasoning with an insane person. There is, however, the possibility
that you don't really believe what you are saying and are just flogging a hobbyhorse, in
which case it is you who are engaging in mendacious journalism and trafficking in
lies. In either case, you need to be silenced. Neither lies nor insanity have any "right" to
be uttered in the public square. You 9/11 Douchers are really the ones doing everything you
accuse the mainstream media of doing, and worse. You have become a danger to the public weal
and must be stopped. Your conspiratorial nonsense just isn't cute anymore.
The official stories about the Kennedy assassination, Epstein's death, and 9/11 are
clearly suspect. No one with the capacity for critical thinking can seriously deny this.
Which elements of these stories are true and which are false will never be resolved.
Because:
The mainstream media including Fox News have abdicated their mission as fact finders and
truth tellers. They peddle entertainment and sell ad space. Rachel Maddow foaming at the
mouth about Trump's pee tape and Hannity fulminating about FISA abuse are the same product,
simply aimed at different demographics.
Nothing in the above two paragraphs is even remotely novel. It's all been said before
twenty bazillion times.
Being a feminist or Democrat (or nonfeminist or Republican) is irrelevant to a person's
credibility. It's possible that Lisa Bloom was part of a conspiracy to invent a fictitious
Katy Johnson story, in which case Bloom is guilty of criminal fraud as well as civil libel.
That would be quite a risk for her to take, to say the least. It's also possible that she was
somehow duped by others, in which case they would be running the civil and criminal
liabilities, while she would just get disbarred for negligence.
The same is true of Johnson's attorney Thomas Meagher.
It is also possible that Johnson's story is at least roughly accurate. There is supporting
testimony from another Epstein victim.
If you set aside your prejudices about Democrats-Republicans, feminists-antifeminists,
Trump-Hillary, etc., and just look at what's been reported, you'll agree with me that the
allegations are credible (but of course unproven). If you suffer emotional blocks against
thinking such things about a President, as so many did when similar things were reported
about Bill Clinton, I sympathize but also urge you to get psychiatric treatment so you can
learn to face unpleasant facts and then get to work cleaning up this country.
The release of Prof. J. Leroy Hulsey report on the finite element analysis of the WTC7
collapse should be a big news.
But won't be.
Democracy works this way. The ruling elite, via the media, Hollywood, etc., tell the
people what to think, the people then vote according to the way they think.
So the truth of 9/11 will never be known to the majority unless we have a public statement
from George W. Bush acknowledging that he personally lit the fuse that set off the explosions
that brought WTC 7 down at free-fall
speed .
This is fortunate for the intrepid Dr. Hulsey* who would, presumably, otherwise have had
to be dispatched by a sudden heart attack, traffic accident, weight-lifting accident suicide
with a bullet to the back of the head. As it is, hardly anyone will ever know what he will
say or what it means.
* Fortunate also for those who so rashly advocate for truth here and elsewhere on the yet
to be fully controlled Internets.
Nicely done. Article will not be featured on front page NYT & discussed on TV.
There are many highlights in your article. This is one.
Epstein's career as a shameless, openly-operating Mossad sexual blackmailer -- like the
in-your-face 9/11 coup -- also illustrates another core truth of Western secularism: If
there is no God, there are no limits (in this case, to human depravity and what it can get
away with). Or as Dostoevsky famously put it: "If God does not exist, everything is
permitted."
Please consult the following papers about the CIA/Mossad crimes against humanity and their
pimps who pose as 'politicians' of the fake Western 'democracy' where Epstein was their agent
serving their interest as a PIMP.
{from being the work of a single political party, intelligence agency or country, the
power structure revealed by the network connected to Epstein is nothing less than a criminal
enterprise that is willing to use and abuse children in the pursuit of ever more power,
wealth and control.}
The 80286 Intel processors: The Intel 80286[3] (also marketed as the iAPX 286[4] and often called Intel 286) is a 16-bit
microprocessor that was introduced on February 1, 1982. The 80286 was employed for the IBM PC/AT, introduced in 1984, and then
widely used in most PC/AT compatible computers until the early 1990s.
Notable quotes:
"... The fate of Boeing's civil aircraft business hangs on the re-certification of the 737 MAX. The regulators convened an international meeting to get their questions answered and Boeing arrogantly showed up without having done its homework. The regulators saw that as an insult. Boeing was sent back to do what it was supposed to do in the first place: provide details and analysis that prove the safety of its planes. ..."
"... In recent weeks, Boeing and the FAA identified another potential flight-control computer risk requiring additional software changes and testing, according to two of the government and pilot officials. ..."
"... Any additional software changes will make the issue even more complicated. The 80286 Intel processors the FCC software is running on is limited in its capacity. All the extras procedures Boeing now will add to them may well exceed the system's capabilities. ..."
"... The old architecture was possible because the plane could still be flown without any computer. It was expected that the pilots would detect a computer error and would be able to intervene. The FAA did not require a high design assurance level (DAL) for the system. The MCAS accidents showed that a software or hardware problem can now indeed crash a 737 MAX plane. That changes the level of scrutiny the system will have to undergo. ..."
"... Flight safety regulators know of these complexities. That is why they need to take a deep look into such systems. That Boeing's management was not prepared to answer their questions shows that the company has not learned from its failure. Its culture is still one of finance orientated arrogance. ..."
"... I also want to add that Boeing's focus on profit over safety is not restricted to the 737 Max but undoubtedly permeates the manufacture of spare parts for the rest of the their plane line and all else they make.....I have no intention of ever flying in another Boeing airplane, given the attitude shown by Boeing leadership. ..."
"... So again, Boeing mgmt. mirrors its Neoliberal government officials when it comes to arrogance and impudence. ..."
"... Arrogance? When the money keeps flowing in anyway, it comes naturally. ..."
"... In the neoliberal world order governments, regulators and the public are secondary to corporate profits. ..."
"... I am surprised that none of the coverage has mentioned the fact that, if China's CAAC does not sign off on the mods, it will cripple, if not doom the MAX. ..."
"... I am equally surprised that we continue to sabotage China's export leader, as the WSJ reports today: "China's Huawei Technologies Co. accused the U.S. of "using every tool at its disposal" to disrupt its business, including launching cyberattacks on its networks and instructing law enforcement to "menace" its employees. ..."
"... Boeing is backstopped by the Murkan MIC, which is to say the US taxpayer. ..."
"... Military Industrial Complex welfare programs, including wars in Syria and Yemen, are slowly winding down. We are about to get a massive bill from the financiers who already own everything in this sector, because what they have left now is completely unsustainable, with or without a Third World War. ..."
"... In my mind, the fact that Boeing transferred its head office from Seattle (where the main manufacturing and presumable the main design and engineering functions are based) to Chicago (centre of the neoliberal economic universe with the University of Chicago being its central shrine of worship, not to mention supply of future managers and administrators) in 1997 says much about the change in corporate culture and values from a culture that emphasised technical and design excellence, deliberate redundancies in essential functions (in case of emergencies or failures of core functions), consistently high standards and care for the people who adhered to these principles, to a predatory culture in which profits prevail over people and performance. ..."
"... For many amerikans, a good "offensive" is far preferable than a good defense even if that only involves an apology. Remember what ALL US presidents say.. We will never apologize.. ..."
"... Actually can you show me a single place in the US where ethics are considered a bastion of governorship? ..."
"... You got to be daft or bribed to use intel cpu's in embedded systems. Going from a motorolla cpu, the intel chips were dinosaurs in every way. ..."
"... Initially I thought it was just the new over-sized engines they retro-fitted. A situation that would surely have been easier to get around by just going back to the original engines -- any inefficiencies being less $costly than the time the planes have been grounded. But this post makes the whole rabbit warren 10 miles deeper. ..."
"... That is because the price is propped up by $9 billion share buyback per year . Share buyback is an effective scheme to airlift all the cash out of a company towards the major shareholders. I mean, who wants to develop reliable airplanes if you can funnel the cash into your pockets? ..."
"... If Boeing had invested some of this money that it blew on share buybacks to design a new modern plane from ground up to replace the ancient 737 airframe, these tragedies could have been prevented, and Boeing wouldn't have this nightmare on its hands. But the corporate cost-cutters and financial engineers, rather than real engineers, had the final word. ..."
"... Markets don't care about any of this. They don't care about real engineers either. They love corporate cost-cutters and financial engineers. They want share buybacks, and if something bad happens, they'll overlook the $5 billion to pay for the fallout because it's just a "one-time item." ..."
"... Overall, Boeing buy-backs exceeded 40 billion dollars, one could guess that half or quarter of that would suffice to build a plane that logically combines the latest technologies. E.g. the entire frame design to fit together with engines, processors proper for the information processing load, hydraulics for steering that satisfy force requirements in almost all circumstances etc. New technologies also fail because they are not completely understood, but when the overall design is logical with margins of safety, the faults can be eliminated. ..."
"... Once the buyback ends the dive begins and just before it hits ground zero, they buy the company for pennies on the dollar, possibly with government bailout as a bonus. Then the company flies towards the next climb and subsequent dive. MCAS economics. ..."
"... The problem is not new, and it is well understood. What computer modelling is is cheap, and easy to fudge, and that is why it is popular with people who care about money a lot. Much of what is called "AI" is very similar in its limitations, a complicated way to fudge up the results you want, or something close enough for casual examination. ..."
United Airline and American Airlines furtherprolonged the
grounding of their Boeing 737 MAX airplanes. They now schedule the plane's return to the flight
line in December. But it is likely that the grounding will continue well into the next
year.
After Boeing's
shabby design and lack of safety analysis of its Maneuver Characteristics Augmentation
System (MCAS) led to the death of 347 people, the grounding of the type and billions of losses,
one would expect the company to show some decency and humility. Unfortunately Boeing behavior
demonstrates none.
There is still little detailed information on how Boeing will fix MCAS. Nothing was said by
Boeing about the manual trim system of the 737 MAX that
does not work when it is needed . The unprotected rudder cables of the plane
do not meet safety guidelines but were still certified. The planes flight control computers
can be
overwhelmed by bad data and a fix will be difficult to implement. Boeing continues to say
nothing about these issues.
International flight safety regulators no longer trust the Federal Aviation Administration
(FAA) which failed to uncover those problems when it originally certified the new type. The FAA
was also the last regulator to ground the plane after two 737 MAX had crashed. The European
Aviation Safety Agency (EASA) asked Boeing to explain and correct
five major issues it identified. Other regulators asked additional questions.
Boeing needs to regain the trust of the airlines, pilots and passengers to be able to again
sell those planes. Only full and detailed information can achieve that. But the company does
not provide any.
As Boeing sells some 80% of its airplanes abroad it needs the good will of the international
regulators to get the 737 MAX back into the air. This makes the arrogance
it displayed in a meeting with those regulators inexplicable:
Friction between Boeing Co. and international air-safety authorities threatens a new delay in
bringing the grounded 737 MAX fleet back into service, according to government and pilot
union officials briefed on the matter.
The latest complication in the long-running saga, these officials said, stems from a
Boeing briefing in August that was cut short by regulators from the U.S., Europe, Brazil and
elsewhere, who complained that the plane maker had failed to provide technical details and
answer specific questions about modifications in the operation of MAX flight-control
computers.
The fate of Boeing's civil aircraft business hangs on the re-certification of the 737 MAX.
The regulators convened an international meeting to get their questions answered and Boeing
arrogantly showed up without having done its homework. The regulators saw that as an insult.
Boeing was sent back to do what it was supposed to do in the first place: provide details and
analysis that prove the safety of its planes.
What did the Boeing managers think those regulatory agencies are? Hapless lapdogs like the
FAA managers`who
signed off on Boeing 'features' even after their engineers told them that these were not
safe?
Buried in the Wall Street Journal
piece quoted above is another little shocker:
In recent weeks, Boeing and the FAA identified another potential flight-control computer risk
requiring additional software changes and testing, according to two of the government and
pilot officials.
The new issue must be going beyond the flight control computer (FCC) issues the FAA
identified in June .
Boeing's original plan to fix the uncontrolled activation of MCAS was to have both FCCs
active at the same time and to switch MCAS off when the two computers disagree. That was
already a huge change in the general architecture which so far consisted of one active and one
passive FCC system that could be switched over when a failure occurred.
Any additional software changes will make the issue even more complicated. The 80286 Intel
processors the FCC software is running on is limited in its capacity. All the extras procedures
Boeing now will add to them may well exceed the system's capabilities.
Changing software in a delicate environment like a flight control computer is extremely
difficult. There will always be surprising side effects or regressions where already corrected
errors unexpectedly reappear.
The old architecture was possible because the plane could still be flown without any
computer. It was expected that the pilots would detect a computer error and would be able to
intervene. The FAA did not require a high design assurance level (DAL) for the system. The MCAS
accidents showed that a software or hardware problem can now indeed crash a 737 MAX plane. That
changes the level of scrutiny the system will have to undergo.
All procedures and functions of the software will have to be tested in all thinkable
combinations to ensure that they will not block or otherwise influence each other. This will
take months and there is a high chance that new issues will appear during these tests. They
will require more software changes and more testing.
Flight safety regulators know of these complexities. That is why they need to take a deep
look into such systems. That Boeing's management was not prepared to answer their questions
shows that the company has not learned from its failure. Its culture is still one of finance
orientated arrogance.
Building safe airplanes requires engineers who know that they may make mistakes and who have
the humility to allow others to check and correct their work. It requires open communication
about such issues. Boeing's say-nothing strategy will prolong the grounding of its planes. It
will increases the damage to Boeing's financial situation and reputation.
---
Previous Moon of Alabama posts on Boeing 737 MAX issues:
"The 80286 Intel processors the FCC software is running on is limited in its capacity."
You must be joking, right?
If this is the case, the problem is unfixable: you can't find two competent software
engineers who can program these dinosaur 16-bit processors.
You must be joking, right?
If this is the case, the problem is unfixable: you can't find two competent software
engineers who can program these dinosaur 16-bit processors.
One of the two is writing this.
Half-joking aside. The 737 MAX FCC runs on 80286 processors. There are ten thousands of
programmers available who can program them though not all are qualified to write real-time
systems. That resource is not a problem. The processors inherent limits are one.
Thanks b for the fine 737 max update. Others news sources seem to have dropped coverage. It
is a very big deal that this grounding has lasted this long. Things are going to get real bad
for Boeing if this bird does not get back in the air soon. In any case their credibility is
tarnished if not down right trashed.
What ever software language these are programmed in (my guess is C) the compilers still
exist for it and do the translation from the human readable code to the machine code for you.
Of course the code could be assembler but writing assembly code for a 286 is far easier than
writing it for say an i9 becuase the CPU is so much simpler and has a far smaller set of
instructions to work with.
@b:
It was a hyperbole.
I might be another one, but left them behind as fast as I could. The last time I had to deal
with it was an embedded system in 1998-ish. But I am also retiring, and so are thousands of
others. The problems with support of a legacy system are a legend.
I commented when you first started writing about this that it would take Boeing down and
still believe that to be true. To the extent that Boeing is stonewalling the international
safety regulators says to me that upper management and big stock holders are being given time
to minimize their exposure before the axe falls.
I also want to add that Boeing's focus on profit over safety is not restricted to the 737
Max but undoubtedly permeates the manufacture of spare parts for the rest of the their plane
line and all else they make.....I have no intention of ever flying in another Boeing
airplane, given the attitude shown by Boeing leadership.
This is how private financialization works in the Western world. Their bottom line is
profit, not service to the flying public. It is in line with the recent public statement by
the CEO's from the Business Roundtable that said that they were going to focus more on
customer satisfaction over profit but their actions continue to say profit is their primary
motive.
The God of Mammon private finance religion can not end soon enough for humanity's sake. It
is not like we all have to become China but their core public finance example is well worth
following.
So again, Boeing mgmt. mirrors its Neoliberal government officials when it comes to arrogance
and impudence. IMO, Boeing shareholders's hair ought to be on fire given their BoD's behavior
and getting ready to litigate.
As b notes, Boeing's international credibility's hanging by a
very thin thread. A year from now, Boeing could very well see its share price deeply dive
into the Penny Stock category--its current P/E is 41.5:1 which is massively overpriced.
Boeing Bombs might come to mean something vastly different from its initial meaning.
Such seemingly archaic processors are the norm in aerospace. If the planes flight
characteristics had been properly engineered from the start the processor wouldn't be an
issue. You can't just spray perfume on a garbage pile and call it a rose.
In the neoliberal world order governments, regulators and the public are secondary to
corporate profits. This is the same belief system that is suspending the British Parliament
to guarantee the chaos of a no deal Brexit. The irony is that globalist, Joe Biden's restart
the Cold War and nationalist Donald Trump's Trade Wars both assure that foreign regulators
will closely scrutinize the safety of the 737 Max. Even if ignored by corporate media and
cleared by the FAA to fly in the USA, Boeing and Wall Street's Dow Jones average are cooked
gooses with only 20% of the market. Taking the risk of flying the 737 Max on their family
vacation or to their next business trip might even get the credentialed class to realize that
their subservient service to corrupt Plutocrats is deadly in the long term.
"The latest complication in the long-running saga, these officials said, stems from a Boeing
BA, -2.66% briefing in August that was cut short by regulators from the U.S., Europe, Brazil
and elsewhere, who complained that the plane maker had failed to provide technical details
and answer specific questions about modifications in the operation of MAX flight-control
computers."
It seems to me that Boeing had no intention to insult anybody, but it has an impossible
task. After decades of applying duct tape and baling wire with much success, they finally
designed an unfixable plane, and they can either abandon this line of business (narrow bodied
airliners) or start working on a new design grounded in 21st century technologies.
Boeing's military sales are so much more significant and important to them, they are just
ignoring/down-playing their commercial problem with the 737 MAX. Follow the real money.
That is unblievable FLight Control comptuer is based on 80286!
A control system needs Real Time operation, at least some pre-emptive task operation, in
terms of milisecond or microsecond.
What ever way you program 80286 you can not achieve RT operation on 80286.
I do not think that is the case.
My be 80286 is doing some pripherial work, other than control.
It is quite likely (IMHO) that they are no longer able to provide the requested
information, but of course they cannot say that.
I once wrote a keyboard driver for an 80286, part of an editor, in assembler, on my first
PC type computer, I still have it around here somewhere I think, the keyboard driver, but I
would be rusty like the Titanic when it comes to writing code. I wrote some things in DEC
assembler too, on VAXen.
arata @16: 80286 does interrupts just fine, but you have to grok asynchronous operation, and
most coders don't really, I see that every day in Linux and my browser. I wish I could get
that box back, it had DOS, you could program on the bare wires, but God it was slow.
Boeing recently lost a $6+Billion weapons contract thanks to its similar Q&A in that
realm of its business. Its annual earnings are due out in October. Plan to short-sell
soon!
I am surprised that none of the coverage has mentioned the fact that, if China's CAAC does
not sign off on the mods, it will cripple, if not doom the MAX.
I am equally surprised that we continue to sabotage China's export leader, as the WSJ
reports today: "China's Huawei Technologies Co. accused the U.S. of "using every tool at its
disposal" to disrupt its business, including launching cyberattacks on its networks and
instructing law enforcement to "menace" its employees.
The telecommunications giant also said
law enforcement in the U.S. have searched, detained and arrested Huawei employees and its
business partners, and have sent FBI agents to the homes of its workers to pressure them to
collect information on behalf of the U.S."
I wonder how much blind trust in Boeing is intertwined into the fabric of civic aviation all
around the world.
I mean something like this: Boeing publishes some research into failure statistics, solid
materials aging or something. One that is really hard and expensive to proceed with.
Everything take the results for granted without trying to independently reproduce and verify,
because The Boeing!
Some later "derived" researches being made, upon the foundation of some
prior works *including* that old Boeing research. Then FAA and similar company institutions
around the world make some official regulations and guidelines deriving from the research
which was in part derived form original Boeing work. Then insurance companies calculate their
tarifs and rate plans, basing their estimation upon those "government standards", and when
governments determine taxation levels they use that data too. Then airline companies and
airliner leasing companies make their business plans, take huge loans in the banks (and banks
do make their own plans expecting those loans to finally be paid back), and so on and so
forth, building the cards-deck house, layer after layer.
And among the very many of the cornerstones - there would be dust covered and
god-forgotten research made by Boeing 10 or maybe 20 years ago when no one even in drunk
delirium could ever imagine questioning Boeing's verdicts upon engineering and scientific
matters.
Now, the longevity of that trust is slowly unraveled. Like, the so universally trusted
737NG generation turned out to be inherently unsafe, and while only pilots knew it before,
and even of them - only most curious and pedantic pilots, today it becomes public knowledge
that 737NG are tainted.
Now, when did this corruption started? Wheat should be some deadline cast into the past,
that since the day every other technical data coming from Boeing should be considered
unreliable unless passing full-fledged independent verification? Should that day be somewhere
in 2000-s? 1990-s? Maybe even 1970-s?
And ALL THE BODY of civic aviation industry knowledge that was accumulated since that date
can NO MORE BE TRUSTED and should be almost scrapped and re-researched new! ALL THE tacit
INPUT that can be traced back to Boeing and ALL THE DERIVED KNOWLEDGE now has to be verified
in its entirety.
Boeing is backstopped by the Murkan MIC, which is to say the US taxpayer. Until the lawsuits
become too enormous.
I wonder how much that will cost. And speaking of rigged markets - why do ya suppose that
Trumpilator et al have been
so keen to make huge sales to the Saudis, etc. etc. ? Ya don't suppose they had an inkling of
trouble in the wind do ya? Speaking of insiders, how many million billions do ya suppose is
being made in the Wall Street "trade war" roller coaster by peeps, munchkins not muppets, who
have access to the Tweeter-in-Chief?
I commented when you first started writing about this that it would take Boeing down and
still believe that to be true. To the extent that Boeing is stonewalling the international
safety regulators says to me that upper management and big stock holders are being given
time to minimize their exposure before the axe falls.
Have you considered the costs of restructuring versus breaking apart Boeing and selling it
into little pieces; to the owners specifically?
The MIC is restructuring itself - by first creating the political conditions to make the
transformation highly profitable. It can only be made highly profitable by forcing the public
to pay the associated costs of Rape and Pillage Incorporated.
Military Industrial Complex welfare programs, including wars in Syria and Yemen, are
slowly winding down. We are about to get a massive bill from the financiers who already own
everything in this sector, because what they have left now is completely unsustainable, with
or without a Third World War.
It is fine that you won't fly Boeing but that is not the point. You may not ever fly again
since air transit is subsidized at every level and the US dollar will no longer be available
to fund the world's air travel infrastructure.
You will instead be paying for the replacement of Boeing and seeing what google is
planning it may not be for the renewal of the airline business but rather for dedicated
ground transportation, self driving cars and perhaps 'aerospace' defense forces, thank you
Russia for setting the trend.
As readers may remember I made a case study of Boeing for a fairly recent PHD. The examiners
insisted that this case study be taken out because it was "speculative." I had forecast
serious problems with the 787 and the 737 MAX back in 2012. I still believe the 787 is
seriously flawed and will go the way of the MAX. I came to admire this once brilliant company
whose work culminated in the superb 777.
America really did make some excellent products in the 20th century - with the exception
of cars. Big money piled into GM from the early 1920s, especially the ultra greedy, quasi
fascist Du Pont brothers, with the result that GM failed to innovate. It produced beautiful
cars but technically they were almost identical to previous models.
The only real innovation
over 40 years was automatic transmission. Does this sound reminiscent of the 737 MAX? What
glued together GM for more than thirty years was the brilliance of CEO Alfred Sloan who
managed to keep the Du Ponts (and J P Morgan) more or less happy while delegating total
responsibility for production to divisional managers responsible for the different GM brands.
When Sloan went the company started falling apart and the memoirs of bad boy John DeLorean
testify to the complete disfunctionality of senior management.
At Ford the situation was perhaps even worse in the 1960s and 1970s. Management was at war
with the workers, faulty transmissions were knowingly installed. All this is documented in an
excellent book by ex-Ford supervisor Robert Dewar in his book "A Savage Factory."
Well, the first thing that came to mind upon reading about Boeing's apparent arrogance
overseas - silly, I know - was that Boeing may be counting on some weird Trump sanctions
for anyone not cooperating with the big important USian corporation! The U.S. has influence
on European and many other countries, but it can only be stretched so far, and I would guess
messing with Euro/internation airline regulators, especially in view of the very real fatal
accidents with the 737MAX, would be too far.
Please read the following article to get further info about how the 5 big Funds that hold 67%
of Boeing stocks are working hard with the big banks to keep the stock high. Meanwhile Boeing
is also trying its best to blackmail US taxpayers through Pentagon, for example, by
pretending to walk away from a competitive bidding contract because it wants the Air Force to
provide better cost formula.
So basically, Boeing is being kept afloat by US taxpayers because it is "too big to fail"
and an important component of Dow. Please tell. Who is the biggest suckers here?
re Piotr Berman | Sep 3 2019 21:11 utc
[I have a tiny bit of standing in this matter based on experience with an amazingly similar
situation that has not heretofore been mentioned. More at end. Thus I offer my opinion.]
Indeed, an impossible task to design a workable answer and still maintain the fiction that
737MAX is a hi-profit-margin upgrade requiring minimal training of already-trained 737-series
pilots , either male or female.
Turning-off autopilot to bypass runaway stabilizer necessitates :
[1]
the earlier 737-series "rollercoaster" procedure to overcome too-high aerodynamic forces
must be taught and demonstrated as a memory item to all pilots.
The procedure was designed
for early Model 737-series, not the 737MAX which has uniquely different center-of-gravity and
pitch-up problem requiring MCAS to auto-correct, especially on take-off.
[2] but the "rollercoaster" procedure does not work at all altitudes.
It causes aircraft to
lose some altitude and, therefore, requires at least [about] 7,000-feet above-ground
clearance to avoid ground contact. [This altitude loss consumed by the procedure is based on
alleged reports of simulator demonstrations. There seems to be no known agreement on the
actual amount of loss].
[3] The physical requirements to perform the "rollercoaster" procedure were established at a
time when female pilots were rare.
Any 737MAX pilots, male or female, will have to pass new
physical requirements demonstrating actual conditions on newly-designed flight simulators
that mimic the higher load requirements of the 737MAX . Such new standards will also have to
compensate for left vs right-handed pilots because the manual-trim wheel is located between
the .pilot/copilot seats.
================
Now where/when has a similar situation occurred? I.e., wherein a Federal regulator agency
[FAA] allowed a vendor [Boeing] to claim that a modified product did not need full
inspection/review to get agency certification of performance [airworthiness].
As you may know, 2 working, nuclear, power plants were forced to shut down and be
decommissioned when, in 2011, 2 newly-installed, critical components in each plant were
discovered to be defective, beyond repair and not replaceable. These power plants were each
producing over 1,000 megawatts of power for over 20 years. In short, the failed components
were modifications of the original, successful design that claimed to need only a low-level
of Federal Nuclear Regulatory Commission oversight and approval. The mods were, in fact, new
and untried and yet only tested by computer modeling and theoretical estimations based on
experience with smaller/different designs.
<<< The NRC had not given full inspection/oversight to the new units because of
manufacturer/operator claims that the changes were not significant. The NRC did not verify
the veracity of those claims. >>>
All 4 components [2 required in each plant] were essentially heat-exchangers weighing 640
tons each, having 10,000 tubes carrying radioactive water surrounded by [transferring their
heat to] a separate flow of "clean" water. The tubes were progressively damaged and began
leaking. The new design failed. It can not be fixed. Thus, both plants of the San Onofre
Nuclear Generating Station are now a complete loss and await dismantling [as the courts will
decide who pays for the fiasco].
In my mind, the fact that Boeing transferred its head office from Seattle (where the main
manufacturing and presumable the main design and engineering functions are based) to Chicago
(centre of the neoliberal economic universe with the University of Chicago being its central
shrine of worship, not to mention supply of future managers and administrators) in 1997 says
much about the change in corporate culture and values from a culture that emphasised
technical and design excellence, deliberate redundancies in essential functions (in case of
emergencies or failures of core functions), consistently high standards and care for the
people who adhered to these principles, to a predatory culture in which profits prevail over
people and performance.
Good article. Boeing is, or used to be, America's biggest manufacturing export. So you are
right it cannot be allowed to fail. Boeing is also a manufacturer of military aircraft. The
fact that it is now in such a pitiful state is symptomatic of America's decline and decadence
and its takeover by financial predators.
They did the same with Nortel, whose share value exceeded 300 billion not long before it was
scrapped. Insiders took everything while pension funds were wiped out of existence.
It is so very helpful to understand everything you read is corporate/intel propaganda, and
you are always being setup to pay for the next great scam. The murder of 300+ people by
boeing was yet another tragedy our sadistic elites could not let go to waste.
For many amerikans, a good "offensive" is far preferable than a good defense even if that
only involves an apology. Remember what ALL US presidents say.. We will never apologize.. For
the extermination of natives, for shooting down civilian airliners, for blowing up mosques
full of worshipers, for bombing hospitals.. for reducing many countries to the stone age and
using biological
and chemical and nuclear weapons against the planet.. For supporting terrorists who plague
the planet now. For basically being able to be unaccountable to anyone including themselves
as a peculiar race of feces. So it is not the least surprising that amerikan corporations
also follow the same bad manners as those they put into and pre-elect to rule them.
People talk about Seattle as if its a bastion of integrity.. Its the same place Microsoft
screwed up countless companies to become the largest OS maker? The same place where Amazon
fashions how to screw its own employees to work longer and cheaper? There are enough examples
that Seattle is not Toronto.. and will never be a bastion of ethics..
Actually can you show
me a single place in the US where ethics are considered a bastion of governorship? Other than
the libraries of content written about ethics, rarely do amerikans ever follow it. Yet expect
others to do so.. This is getting so perverse that other cultures are now beginning to
emulate it. Because its everywhere..
Remember Dallas? I watched people who saw in fascination
how business can function like that. Well they cant in the long run but throw enough money
and resources and it works wonders in the short term because it destroys the competition. But
yea around 1998 when they got rid of the laws on making money by magic, most every thing has
gone to hell.. because now there are no constraints but making money.. anywhich way.. Thats
all that matters..
You got to be daft or bribed to use intel cpu's in embedded systems. Going from a motorolla
cpu, the intel chips were dinosaurs in every way. Requiring the cpu to be almost twice as
fast to get the same thing done.. Also its interrupt control was not upto par. A simple
example was how the commodore amiga could read from the disk and not stutter or slow down
anything else you were doing. I never seen this fixed.. In fact going from 8Mhz to 4GHz seems
to have fixed it by brute force. Yes the 8Mhz motorolla cpu worked wonders when you had
music, video, IO all going at the same time. Its not just the CPU but the support chips which
don't lock up the bus. Why would anyone use Intel? When there are so many specific embedded
controllers designed for such specific things.
Initially I thought it was just the new over-sized engines they retro-fitted. A situation
that would surely have been easier to get around by just going back to the original engines
-- any inefficiencies being less $costly than the time the planes have been grounded. But
this post makes the whole rabbit warren 10 miles deeper.
I do not travel much these days and
find the cattle-class seating on these planes a major disincentive. Becoming aware of all
these added technical issues I will now positively select for alternatives to 737 and bear
the cost.
I'm surprised Boeing stock still haven't taken nose dive
Posted by: Bob burger | Sep 3 2019 19:27 utc | 9
That is because the price is propped up by
$9 billion share buyback per year . Share buyback is an effective scheme to airlift all
the cash out of a company towards the major shareholders. I mean, who wants to develop
reliable airplanes if you can funnel the cash into your pockets?
Once the buyback ends the dive begins and just before it hits ground zero, they buy the
company for pennies on the dollar, possibly with government bailout as a bonus. Then the
company flies towards the next climb and subsequent dive. MCAS economics.
Hi , I am new here in writing but not in reading..
About the 80286 , where is the coprocessor the 80287?
How can the 80286 make IEEE math calculations?
So how can it fly a controlled flight when it can not calculate its accuracy......
How is it possible that this system is certified?
It should have at least a 80386 DX not SX!!!!
moved to Chicago in 1997 says much about the change in corporate culture and values from a
culture that emphasised technical and design excellence, deliberate redundancies in essential
functions (in case of emergencies or failures of core functions), consistently high standards
and care for the people who adhered to these principles, to a predatory culture in which
profits prevail over people and performance.
Jen @ 35
< ==
yes, the morally of the companies and their exclusive hold on a complicit or
controlled government always defaults the government to support, enforce and encourage the
principles of economic Zionism.
But it is more than just the corporate culture => the corporate fat cats
1. use the rule-making powers of the government to make law for them. Such laws create high
valued assets from the pockets of the masses. The most well know of those corporate uses of
government is involved with the intangible property laws (copyright, patent, and government
franchise). The government generated copyright, franchise and Patent laws are monopolies. So
when government subsidizes a successful outcome R&D project its findings are packaged up
into a set of monopolies [copyrights, privatized government franchises which means instead of
50 companies or more competing for the next increment in technology, one gains the full
advantage of that government research only one can use or abuse it. and the patented and
copyrighted technology is used to extract untold billions, in small increments from the
pockets of the public.
2. use of the judicial power of governments and their courts in both domestic and
international settings, to police the use and to impose fake values in intangible property
monopolies. Government-rule made privately owned monopoly rights (intangible property rights)
generated from the pockets of the masses, do two things: they exclude, deny and prevent would
be competition and their make value in a hidden revenue tax that passes to the privately held
monopolist with each sale of a copyrighted, government franchised, or patented service or
product. .
Please note the one two nature of the "use of government law making powers to generate
intangible private monopoly property rights"
There is no doubt Boeing has committed crimes on the 737MAX, its arrogance & greedy
should be severely punished by the international commitment as an example to other global
Corporations. It represents what is the worst of Corporate America that places profits in
front of lives.
How the U.S. is keeping Russia out of the international market?
Iran and other sanctioned countries are a potential captive market and they have growth
opportunities in what we sometimes call the non-aligned, emerging markets countries (Turkey,
Africa, SE Asia, India, ...).
One thing I have learned is that the U.S. always games the system, we never play fair. So
what did we do. Do their manufacturers use 1% U.S. made parts and they need that for
international certification?
Ultimately all of the issues in the news these days are the same one and the
same issue - as the US gets closer and closer to the brink of catastrophic collapse they get
ever more desperate. As they get more and more desperate they descend into what comes most
naturally to the US - throughout its entire history - frenzied violence, total absence of
morality, war, murder, genocide, and everything else that the US is so well known for (by
those who are not blinded by exceptionalist propaganda).
The Hong Kong violence is a perfect example - it is impossible that a self-respecting
nation state could allow itself to be seen to degenerate into such idiotic degeneracy, and so
grossly flaunt the most basic human decency. Ergo , the US is not a self-respecting
nation state. It is a failed state.
I am certain the arrogance of Boeing reflects two things: (a) an assurance from the US
government that the government will back them to the hilt, come what may, to make sure that
the 737Max flies again; and (b) a threat that if Boeing fails to get the 737Max in the air
despite that support, the entire top level management and board of directors will be jailed.
Boeing know very well they cannot deliver. But just as the US government is desperate
to avoid the inevitable collapse of the US, the Boeing top management are desperate to avoid
jail. It is a charade.
It is time for international regulators to withdraw certification totally - after the
problems are all fixed (I don't believe they ever will be), the plane needs complete new
certification of every detail from the bottom up, at Boeing's expense, and with total
openness from Boeing. The current Boeing management are not going to cooperate with that,
therefore the international regulators need to demand a complete replacement of the
management and board of directors as a condition for working with them.
If Boeing had invested some of this money that it blew on share buybacks to design a new
modern plane from ground up to replace the ancient 737 airframe, these tragedies could have
been prevented, and Boeing wouldn't have this nightmare on its hands. But the corporate
cost-cutters and financial engineers, rather than real engineers, had the final word.
Markets don't care about any of this. They don't care about real engineers either. They
love corporate cost-cutters and financial engineers. They want share buybacks, and if
something bad happens, they'll overlook the $5 billion to pay for the fallout because it's
just a "one-time item."
And now Boeing still has this plane, instead of a modern plane, and the history of this
plane is now tainted, as is its brand, and by extension, that of Boeing. But markets blow
that off too. Nothing matters.
Companies are getting away each with their own thing. There are companies that are losing
a ton of money and are burning tons of cash, with no indications that they will ever make
money. And market valuations are just ludicrous.
======
Thus Boeing issue is part of a much larger picture. Something systemic had to make
"markets" less rational. And who is this "market"? In large part, fund managers wracking
their brains how to create "decent return" while the cost of borrowing and returns on lending
are super low. What remains are forms of real estate and stocks.
Overall, Boeing buy-backs exceeded 40 billion dollars, one could guess that half or
quarter of that would suffice to build a plane that logically combines the latest
technologies. E.g. the entire frame design to fit together with engines, processors proper
for the information processing load, hydraulics for steering that satisfy force requirements
in almost all circumstances etc. New technologies also fail because they are not completely
understood, but when the overall design is logical with margins of safety, the faults can be
eliminated.
Instead, 737 was slowly modified toward failure, eliminating safety margins one by
one.
Boeing has apparently either never heard of, or ignores a procedure that is mandatory in
satellite design and design reviews. This is FMEA or Failure Modes and Effects Analysis. This
requires design engineers to document the impact of every potential failure and combination
of failures thereby highlighting everthing from catastrophic effects to just annoyances.
Clearly BOEING has done none of these and their troubles are a direct result. It can be
assumed that their arrogant and incompetent management has not yet understood just how
serious their behavior is to the future of the company.
Once the buyback ends the dive begins and just before it hits ground zero, they buy the
company for pennies on the dollar, possibly with government bailout as a bonus. Then the
company flies towards the next climb and subsequent dive. MCAS economics.
Computer modelling is what they are talking about in the cliche "Garbage in, garbage out".
The problem is not new, and it is well understood. What computer modelling is is cheap,
and easy to fudge, and that is why it is popular with people who care about money a lot. Much
of what is called "AI" is very similar in its limitations, a complicated way to fudge up the
results you want, or something close enough for casual examination.
In particular cases where you have a well-defined and well-mathematized theory, then you
can get some useful results with models. Like in Physics, Chemistry.
And they can be useful for "realistic" training situations, like aircraft simulators. The
old story about wargame failures against Iran is another such situation. A lot of video games
are big simulations in essence. But that is not reality, it's fake reality.
@ SteveK9 71 "By the way, the problem was caused by Mitsubishi, who designed the heat
exchangers."
Ahh. The furriners...
I once made the "mistake" of pointing out (in a comment under an article in Salon) that the
reactors that exploded at Fukushima was made by GE and that GE people was still in charge of
the reactors of American quality when they exploded. (The amerikans got out on one of the
first planes out of the country).
I have never seen so many angry replies to one of my comments. I even got e-mails for several weeks from angry Americans.
@Henkie #53
You need floating point for scientific calculations, but I really doubt the 737 is doing any
scientific research.
Also, a regular CPU can do mathematical calculations. It just isn't as fast nor has the same
capacity as a dedicated FPU.
Another common use for FPUs is in live action shooter games - the neo-physics portions
utilize scientific-like calculations to create lifelike actions. I sold computer systems in
the 1990s while in school - Doom was a significant driver for newer systems (as well as hedge
fund types).
Again, don't see why an airplane needs this.
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By Laura Ungar, who health issues out of Kaiser Health News' St. Louis office, and Trudy
Lieberman, a journalist for more than 45 years, and a past president of the Association of
Health Care Journalists. Originally published by Kaiser Health
News .
MEMPHIS, Tenn. -- Army veteran Eugene Milligan is 75 years old and blind. He uses a
wheelchair since losing half his right leg to diabetes and gets dialysis for kidney
failure.
And he has struggled to get enough to eat.
Earlier this year, he ended up in the hospital after burning himself while boiling water for
oatmeal. The long stay caused the Memphis vet to fall off a charity's rolls for home-delivered
Meals on Wheels , so he had
to rely on others, such as his son, a generous off-duty nurse and a local church to bring him
food.
"Many times, I've felt like I was starving," he said. "There's neighbors that need food too.
There's people at dialysis that need food. There's hunger everywhere."
Indeed, millions of seniors across the country quietly go hungry as the safety net designed
to catch them frays. Nearly 8% of Americans 60 and older were "food insecure" in 2017,
according to a recent study released
by the anti-hunger group Feeding America. That's 5.5 million seniors who don't have
consistent access to enough food for a healthy life, a number that has more than doubled since
2001 and is only expected to grow as America grays.
While the plight of hungry children elicits support and can be tackled in schools, the
plight of hungry older Americans is shrouded by isolation and a generation's pride. The problem
is most acute in parts of the South and Southwest. Louisiana has the highest rate among states,
with 12% of seniors facing food insecurity. Memphis fares worst among major metropolitan areas,
with 17% of seniors like Milligan unsure of their next meal.
And government relief falls short. One of the main federal programs helping seniors is
starved for money. The Older Americans Act -- passed more than half a century ago as part of
President Lyndon Johnson's Great Society reforms -- was amended in 1972 to provide for
home-delivered and group meals, along with other services, for anyone 60 and older. But its
funding has lagged far behind senior population growth, as well as economic inflation.
The biggest chunk of the act's budget, nutrition services, dropped by 8% over the past 18
years when adjusted for inflation, an AARP report
found in February. Home-delivered and group meals have decreased by nearly 21 million since
2005. Only a fraction of those facing food insecurity get any meal services under the act; a
U.S. Government
Accountability Office report examining 2013 data found 83% got none.
With the act set to expire Sept. 30, Congress is now considering its reauthorization and how
much to spend going forward.
Meanwhile, according to the U.S. Department of Agriculture, only 45% of eligible adults 60
and older have signed up for another source of federal aid: SNAP, the food stamp program for
America's poorest. Those who don't are typically either unaware they could qualify, believe
their benefits would be tiny or can no longer get to a grocery store to use them.
Even fewer seniors may have SNAP in the future. More than 13% of SNAP households with
elderly members would lose benefits under a recent Trump administration proposal.
For now, millions of seniors -- especially low-income ones -- go without. Across the nation,
waits are common to receive home-delivered meals from a crucial provider, Meals on Wheels, a
network of 5,000 community-based programs. In Memphis, for example, the wait to get on the
Meals on Wheels schedule is more than a year long.
"It's really sad because a meal is not an expensive thing," said Sally Jones Heinz,
president and CEO of the Metropolitan
Inter-Faith Association , which provides home-delivered meals in Memphis. "This shouldn't
be the way things are in 2019."
Since malnutrition exacerbates diseases and prevents healing, seniors without steady,
nutritious food can wind up in hospitals, which drives up Medicare and Medicaid costs, hitting taxpayers with an even
bigger bill . Sometimes seniors relapse quickly after discharge -- or worse.
Widower Robert Mukes, 71, starved to death on a cold December day in 2016, alone in his
Cincinnati apartment.
The Hamilton County Coroner listed the primary cause of death as "starvation of unknown
etiology" and noted "possible hypothermia," pointing out that his apartment had no electricity
or running water. Death records show the 5-foot-7-inch man weighed just 100.5 pounds.
A Clear Need
On a hot May morning in Memphis, seniors trickled into a food bank at the Riverside
Missionary Baptist Church, 3 miles from the opulent tourist mecca of Graceland. They picked up
boxes packed with canned goods, rice, vegetables and meat.
Marion Thomas, 63, placed her box in the trunk of a friend's car. She lives with chronic
back pain and high blood pressure and started coming to the pantry three years ago. She's
disabled, relies on Social Security and gets $42 a month from SNAP based on her income,
household size and other factors. That's much less than the average $125-a-month benefit for
households with seniors, but more than the $16 minimum that one in five such households get.
Still, Thomas said, "I can't buy very much."
A day later, the Mid-South Food Bank brought a "mobile pantry" to Latham Terrace, a senior
housing complex, where a long line of people waited. Some inched forward in wheelchairs; others
leaned on canes. One by one, they collected their allotments.
The need is just as real elsewhere. In Dallas, Texas, 69-year-old China Anderson squirrels
away milk, cookies and other parts of her home-delivered lunches for dinner because she can no
longer stand and cook due to scoliosis and eight deteriorating vertebral discs.
As seniors ration food, programs ration services.
Although more than a third of the Meals on Wheels money comes from the Older Americans Act,
even with additional public and private dollars, funds are still so limited that some programs
have no choice but to triage people using score sheets that assign points based on who needs
food the most. Seniors coming from the hospital and those without family usually top waiting
lists.
More than 1,000 were waiting on the Memphis area's list recently. And in Dallas, $4.1
million in donations wiped out a 1,000-person waiting list in December, but within months it
had crept back up to 100.
Nationally, "there are tens of thousands of seniors who are waiting," said Erika
Kelly , chief membership and advocacy officer for Meals on Wheels America. "While they're
waiting, their health deteriorates and, in some cases, we know seniors have died."
Edwin Walker, a deputy assistant secretary for the federal Administration on Aging,
acknowledged waits are a long-standing problem, but said 2.4 million people a year benefit from
the Older Americans Act's group or home-delivered meals, allowing them to stay independent and
healthy.
Seniors get human connection, as well as food, from these services. Aner Lee Murphy, a
102-year-old Meals on Wheels client in Memphis, counts on the visits with volunteers Libby and
Bob Anderson almost as much as the food. She calls them "my children," hugging them close and
offering a prayer each time they leave.
But others miss out on such physical and psychological nourishment. A devastating phone call
brought that home for Kim Daugherty, executive director of the Aging Commission of the
Mid-South , which connects seniors to service providers in the region. The woman on the
line told Daugherty she'd been on the waiting list for more than a year.
"Ma'am, there are several hundred people ahead of you," Daugherty reluctantly explained.
"I just need you all to remember," came the caller's haunting reply, "I'm hungry and I need
food."
A Slow Killer
James
Ziliak , a poverty researcher at the University of Kentucky who worked on the Feeding
America study, said food insecurity shot up with the Great Recession, starting in the late
2000s, and peaked in 2014. He said it shows no signs of dropping to pre-recession levels.
While older adults of all income levels can face difficulty accessing and preparing healthy
food, rates are highest among seniors in poverty. They are also high among minorities. More
than 17% of black seniors and 16% of Hispanic seniors are food insecure, compared with fewer
than 7% of white seniors.
A host of issues combine to set those seniors on a downward spiral, said registered
dietitian Lauri Wright , who
chairs the Department of Nutrition and Dietetics at the University of North Florida. Going to
the grocery store gets a lot harder if they can't drive. Expensive medications leave less money
for food. Chronic physical and mental health problems sap stamina and make it tough to cook.
Inch by inch, hungry seniors decline.
And, even if it rarely kills directly, hunger can complicate illness and kill slowly.
Malnutrition blunts immunity, which already tends to weaken as people age. Once they start
losing weight, they're more likely to grow frail and are more likely to die within a year, said
Dr. John Morley, director of the division of geriatric medicine at Saint Louis University.
Seniors just out of the hospital are particularly vulnerable. Many wind up getting
readmitted, pushing up taxpayers' costs for Medicare and Medicaid. A
recent analysis by the Bipartisan Policy Center found that Medicare could save $1.57 for
every dollar spent on home-delivered meals for chronically ill seniors after a
hospitalization.
Most hospitals don't refer senior outpatients to Meals on Wheels, and advocates say too few
insurance companies get involved in making sure seniors have enough to eat to keep them
healthy.
When Milligan, the Memphis veteran, burned himself with boiling water last winter and had to
be hospitalized for 65 days, he fell off the Metropolitan Inter-Faith Association's radar. The
meals he'd been getting for about a decade stopped.
Heinz, Metropolitan's CEO, said the association is usually able to start and stop meals for
short hospital stays. But, Heinz said, the association didn't hear from Milligan and kept
trying to deliver meals for a time while he was in the hospital, then notified the Aging
Commission of the Mid-South he wasn't home. As is standard procedure, Metropolitan officials
said, a staff member from the commission made three attempts to contact him and left a card at
the blind man's home.
But nothing happened when he got out of the hospital this spring. In mid-May, a nurse
referred him for meal delivery. Still, he didn't get meals because he faced a waitlist already
more than 1,000 names long.
After questions from Kaiser Health News, Heinz looked into Milligan's case and realized
that, as a former client, Milligan could get back on the delivery schedule faster.
But even then the process still has hurdles: The aging commission would need to conduct a
new home assessment for meals to resume. That has yet to happen because, amid the wait,
Milligan's health deteriorated.
A Murky Future
As the Older Americans Act awaits reauthorization this fall, many senior advocates worry
about its funding.
In June, the U.S. House passed a $93 million increase to the Older Americans Act's nutrition
programs, raising total funding by about 10% to $1 billion in the next fiscal year. In
inflation-adjusted dollars, that's still less than in 2009. And it still has to pass in the
Republican-controlled Senate, where the proposed increase faces long odds.
U.S. Rep. Suzanne Bonamici, an Oregon Democrat who chairs the Civil Rights and Human
Services Subcommittee, expects the panel to tackle legislation for reauthorization of the act
soon after members return from the August recess. She's now working with colleagues "to craft a
strong, bipartisan update," she said, that increases investments in nutrition programs as well
as other services.
"I'm confident the House will soon pass a robust bill," she said, "and I am hopeful that the
Senate will also move quickly so we can better meet the needs of our seniors."
In the meantime, "the need for home-delivered meals keeps increasing every year," said
Lorena Fernandez, who runs a meal
delivery program in Yakima, Wash. Activists are pressing state and local governments to
ensure seniors don't starve, with mixed results. In Louisiana, for example, anti-hunger
advocates stood on the state Capitol steps in May and unsuccessfully called on the state to
invest $1 million to buy food from Louisiana farmers to distribute to hungry residents.
Elsewhere, senior activists across the nation have participated each March in "March for Meals"
events such as walks, fundraisers and rallies designed to focus attention on the problem.
Private fundraising hasn't been easy everywhere, especially rural communities without much
wealth. Philanthropy has instead tended to flow to hungry kids, who outnumber hungry seniors
more than 2-to-1, according to Feeding America.
"Ten years ago, organizations had a goal of ending child hunger and a lot of innovation and
resources went into what could be done," said Jeremy Everett, executive director of Baylor
University's Texas Hunger Initiative. "The same thing has not happened in the senior adult
population." And that has left people struggling for enough food to eat.
As for Milligan, he didn't get back on Meals on Wheels before suffering complications
related to his dialysis in June. He ended up back in the hospital. Ironically, it was there
that he finally had a steady, if temporary, source of food.
It's impossible to know if his time without steady, nutritious food made a difference. What
is almost certain is that feeding him at home would have been far cheaper.
"Few economists worked at the Federal Reserve in the early 1950s. Those who were on the
staff of America's central bank were relegated to the basement, at a safe remove from the
corridors where real decisions were made.
Economists had their uses, allowed William McChesney Martin, then the Fed's chairman. But
they also had 'a far greater sense of confidence in their analyses than I have found to be
warranted'. They were best kept down with the surplus furniture and the rats." •
Indeed!
Immanuel Wallerstein, author of The Modern World-System (Volume I, 1974[1]),
Historical Capitalism (1983), The Decline of American Power (2003), and 30 other
books, died on August 31 of this year. He was 89 years old. Oddly, or not, although he was a
Senior Research Scholar at Yale, was head of the Fernand Braudel Center for the Study of
Economies, Historical Systems and Civilization at Binghamton University, and received the
Career of Distinguished Scholarship Award from the American Sociological Association, there has
as yet been no obituary for him in any major[2] English, Five-Eyes newspaper that I can find (
France
; Spain ;
Italy ;
Brazil ;
Romania ; Iran (English); Turkey
[3]; and
Turkey (English).
This will not be an obituary for Immanuel Wallerstein; I don't have time to do the reading
required to summarize his personal intellectual history. (I read his short and simple
World-Systems Analysis: An Introduction years ago, before going on to his associate
Giovanni Arrighi's The Long Twentieth Century , which is also a world systems book. I
recommend both, and that's really my object in this post: Getting some of you to read up on
Wallerstein. So in this post, I'm going to share some long extracts from Wallerstein, less
theoretical, and more focused on current events. Use the tools that come to hand!
A structural crisis is chaotic. This means that instead of the normal standard set of
combinations or alliances that were previously used to maintain the stability of the system,
they constantly shift these alliances in search of short-term gains. This only makes the
situation worse. We notice here a paradox – the certainty of the end of the existing
system and the intrinsic uncertainty of what will eventually replace it and create thereby a
new system (or new systems) to stabilize realities .
Now, let us look at China's role in what is going on. In terms of the present system,
China seems to be gaining much advantage. To argue that this means the continuing functioning
of capitalism as a system is basically to (re)assert the invalid point that systems are
eternal and that China is replacing the United States in the same way as the United States
replaced Great Britain as the hegemonic power. Were this true, in another 20-30 years China
(or perhaps northeast Asia) would be able to set its rules for the capitalist
world-system.
But is this really happening? First of all, China's economic edge, while still greater
than that of the North, has been declining significantly. And this decline may well amplify
soon, as political resistance to China's attempts to control neighboring countries and entice
(that is, buy) the support of faraway countries grows, which seems to be occurring.
Can China then depend on widening internal demand to maintain its global edge? There are
two reasons why not. The present authorities worry that a widening middle stratum could
jeopardize their political control and seek to limit it.[a]
The second reason, more important, is that much of the internal demand is the result of
reckless borrowing by regional banks, which are facing an inability to sustain their
investments. If they collapse, even partially, this could end the entire economic edge[b] of
China.
In addition, there have been, and will continue to be, wild swings in geopolitical
alliances. In a sense, the key zones are not in the North, but in areas such as Russia,
India, Iran, Turkey, and southeastern Europe, all of them pursuing their own roles by a game
of swiftly and repeatedly changing sides. The bottom line is that, though China plays a
very big role in the short run, it is not as big a role as China would wish and that some in
the rest of the world-system fear. It is not possible for China to stop the disintegration of
the capitalist system. It can only try to secure its place in a future
world-system.
As far as Wallerstein's bottom line: The proof is in the pudding. That said, there seems to
be a tendency to regard Xi as all-powerful. IMNSHO, that's by no means the case, not only
because of China's middle class, but because of whatever China's equivalent of deplorables is.
The "wild swings in geopolitical alliances" might play a role, too; oil, Africa's minerals.
NOTES [a] I haven't seen this point made elsewhere. [b] Crisis, certainly. "Ending the
entire economic edge"? I'm not so sure.
On April 7, 2018 in Brazil Luiz Inacio "Lula" da Silva was arrested and taken to prison in
Curitiba to begin a twelve-year sentence. He was Brazil's president from January 2003 to
January 2011. He was so popular that when he left office in 2011, he had a 90% approval
rate.
Soon afterwards, he was charged with corruption while in office. He denied the charge. He
was however convicted of the charge, a conviction that was sustained by an Appeals Court. He
is still appealing his conviction to the Supreme Court.
Lula was a trade-union leader who founded a workers' party, the Partido dos Trabalhadores
(PT). It was the party of the underclass and one that stood for fundamental change both in
Brazil and in Latin America as a whole.
The internal redistributions and the geopolitical realignments displeased greatly both the
United States and Brazil's right-wing forces. One thing that made it difficult for them to
counter Lula was the fact that the state of the world-economy in the first decade of the
twenty-first century was very favorable to the so-called newly-emerging economies, also known
as the BRICS (B for Brazil).
However, the winds of the world-economy turned, and suddenly revenue for the Brazilian
state (and of course many other states) became scarcer.
The right found a renewed opening in the financial squeeze that ensued. They blamed
economic difficulties on corruption and fostered a judicial drive called lava jato (car
wash), which evoked the issue of laundering money, something that was indeed widespread .
Once Lula was threatened with immediate imprisonment, Brazil's two major popular forces
expressed their strong opposition to what they asserted was a political coup d'état.
One was the Central Ùnica dos Trabalhadores (CUT), which Lula had once led, and the
Movimento dos Trabalhadores Rurais Sem Terra (MST), Brazil's largest rural organization.
The MST and CUT organized significant mobilizations against his imprisonment. But, faced
with the threat of the armed forces to intervene (and possibly restore a military regime
again), Lula decided to present himself for arrest. He has now been imprisoned.
The question today is whether this right-wing coup can succeed. This no longer depends on
Lula personally. History may absolve him but the current struggle in Brazil and in Latin
America as a whole depends on political organization at the base .
One of the principal characteristics of the structural crisis of the modern
world-system in which we find ourselves is the high volatility of the world-economy .
Should it run even further downward than it is at present, there may well be an upsurge
of popular sentiment against the regime. If it began to include large parts of the
professional strata, an alliance with the underclasses is quite possible.
Even then it will not be easy to change the political realities of Brazil. The army stands
ready probably to prevent a left government from coming to power. Nonetheless one should not
despair. The army was defeated once before and evicted from power. It could be again.
In short, the outlook for Brazil and for Latin America as a whole is highly
uncertain. Brazil, given its size and its history, is a key zone of the middle-run struggle
for a progressive outcome of the struggle between the global left and the global right for
resolving the structural crisis in their favor.
Once again, the proof is in the pudding. But volatility? Yes, indeed. And blowback, too.
Since 1989, social science has thrown very little light on [such matters as the growth of
extreme right in Austria]. Indeed, its failure has been lamentable. All anyone –
whatever their politics – talks about is globalisation, as though that were anything
more than current rhetoric for the continuing struggle within the capitalist world-economy
over the degree to which transborder flows should be unimpeded It is dust in our eyes.
So, too, is the endless litany about ethnic violence, and here human rights activists, as
well as social scientists, are to blame. Ethnic violence, however horrifying, is not the
preserve of some less fortunate, less wise, less civilised other. It follows from the deep
and growing inequalities within our world-system, and cannot be addressed by moral
exhortation, or by any meddling on the part of the pure and advanced in zones controlled by
the impure and backward. World social science has offered us no useful tools to analyse what
has been happening in the world-system since 1989, and therefore no useful tools to
understand contemporary Austrian reality.
The reason everyone was so appalled by Nazism after 1945 is obvious. While almost
everyone in the pan-European world had been openly and happily racist and anti-semitic before
1945, hardly anyone had intended it to lead where it did. Hitler's Final Solution missed the
entire point of racism within the capitalist world-economy. The object of racism is not to
exclude people, much less exterminate them, but to keep them within the system as
Untermenschen, to be exploited economically and used as political scapegoats . What
happened with Nazism was what the French would call a dérapage – a
blunder, a skid, a loss of control. Or perhaps it was the genie getting out of the
bottle.
It was acceptable to be racist up to the point of a final solution, but no
further . It had always been a delicate game, and no doubt there had been
dérapages before – but never on such a large scale, never in so central
an arena of the world-system, and never that visible. Collectively, the pan-European world
came to terms with what had happened by banning public racism, primarily public
anti-semitism. It became a taboo language .
One of the reasons the EU reacted so strongly to Haider is that Austria has refused to
assume its share of guilt, insisting that it was primarily a victim. Perhaps a majority of
Austrians had not wanted the Anschluss, although it is hard to believe it when you see
newsreel clips of the cheering Viennese crowds. But, more to the point, no non-Jewish,
non-Roma Austrian was considered anything other than German after the Anschluss, and the
majority gloried in that fact.
The realisation that racism had been undone by going much too far had two major
consequences in the post-1945 pan-European world. First, these countries sought to emphasise
their internal virtues as integrative nations untroubled by racist oppression, 'free
countries' facing an 'evil empire' whose racism, in its turn, became a regular theme of
Western propaganda. All sorts of socio-political actions followed from this: the 1954
decision by the US Supreme Court to outlaw racial segregation; the philo-Israel policies of
the whole pan-European world; even the new emphasis on ecumenicism within Western
Christianity (as well as the invention of the idea of a joint Judaeo-Christian heritage).
Second, and just as important, there was a need to restore a sanitised racism to its
original function: that of keeping people within the system, but as Untermenschen. If Jews
could no longer be treated thus, or Catholics in Protestant countries, it was necessary to
look further afield. In the pan-European world the post-1945 period was, at least at first, a
time of incredible economic expansion accompanied by a radically reduced rate of
reproduction. More workers were needed and fewer were being produced than ever before. So
began the era of what the Germans gingerly called the Gastarbeiter.
Who were these Gastarbeiter? Mediterranean peoples in non-Mediterranean Europe, Latin
Americans and Asians in North America, West Indians in North America and Western Europe,
Black Africans and South Asians in Europe. And, since 1989, citizens of the former socialist
bloc. They have come in large numbers because they wanted to come and because they could find
jobs: indeed, were desperately needed to make the pan-European countries flourish. But they
came, almost universally, as persons at the bottom of the heap – economically, socially
and politically
The rhymes with immigration policy debates in this country are obvious. And I love the irony
of dérapage .
My first commentary appeared on October 1, 1998. It was published by the Fernand Braudel
Center (FBC) at Binghamton University. I have produced commentaries on the first and the
fifteenth of every month since then without exception. This is the 500th such commentary.
This will be the last commentary ever.
I have devoted myself to writing these commentaries with complete regularity. But no one
lives forever, and there is no way I can continue doing these commentaries much longer.
So, sometime ago I said to myself I will try to make it to number 500 and then call it
quits. I have made it to 500 and I am calling it quits
The post is dated July 1, 2019, two months before his death. Thats the way to do it.
More:
There is only one language in which all 500 commentaries have been translated. This
language is Mandarin Chinese.
Oh.
It is the future that is more important and more interesting, but also inherently
unknowable. Because of the structural crisis of the modern-world system, it is possible,
possible but not absolutely certain, that a transformatory use of a 1968 complex will be
achieved by someone or some group. It will probably take much time and will continue on past
the point of the end of commentaries. What form this new activity will take is hard to
predict.
So, the world might go down further by-paths. Or it may not. I have indicated in the past
that I thought the crucial struggle was a class struggle, using class in a very broadly
defined sense. What those who will be alive in the future can do is to struggle with
themselves so this change may be a real one. I still think that and therefore I think there
is a 50-50 chance that we'll make it to transformatory change, but only 50-50.
Some might find that optimistic, but personally I find it heartening.
Conclusion
I don't have much to say -- the extracts are far too long! -- but surely Wallerstein's life
was a life well lived.
The new edition of Immanuel Wallerstein's Volume 1 of The Modern World-System, originally
published in 1974, is more beautiful than the original both because of its cover, and because
37 years of subsequent scholarship and world historical events have demonstrated the
scientific and practical utility of the theoretical approach developed in this seminal work
.
The world-systems perspective is a strategy for explaining institutional change that
focuses on whole interpolity systems rather than single polities. The tendency in
sociological theory has been to think of single national societies as whole systems. This has
led to many errors, because the idea of a system usually implies closure and that the most
important processes are endogenous. National societies (both their states and their
nations) have emerged over the last few centuries to become the strongest socially
constructed identities and organizations in the modern world, but they have never been whole
systems. They have always existed in a larger context of important interaction networks
(trade, warfare, long-distance communication) that have greatly shaped events and social
change .
Wallerstein's new Prologue responds to several of the major criticisms that have been made
of Volume 1. Critics said that the book was too economistic, ignoring politics and culture.
Marxists said that Wallerstein ignored class relations. Wallerstein's approach to world
history is evolutionary, though he does not use that word. He compares regions and national
societies with each other within the same time periods, but he also compares them with
earlier and later instances in order to comprehend the long-term trajectories of social
change and to explain the qualitative transformation in systemic logic that began to emerge
in Europe in the long 16th century (1450-1640 CE). His theoretical framework contemplates a
"whole system" and how that system has changed or remained the same over time while expanding
to become a single Earth-wide integrated network.
"It's almost as though the disreputable younger sons of the Establishment, sent off to make money in Hong Kong after some
scandal, had all returned to run the country"
Notable quotes:
"... I hate to say this, as a lifelong Socialist from a very modest background, but the British system worked in the past because it was pretty homogeneous. I don't mean literally everyone came from the same background (they let me in, after all) but rather there was a cultural homogeneity in the civil service, in politics, and even partly in the media, which had its origin in a certain upper middle class sense of duty, honesty and competence, inherited from the serious professional classes of the nineteenth century. (It had its analogue in the ethos of the honest tradesman, which we've lost as well). This culture was never universal , of course, but it was very powerful, and it coped quite well with the social changes after 1945, as more women and people from much more diverse backgrounds entered the public sphere. ..."
"... You can mock the old High Seriousness of the public sphere if you like (too white! too male!) but the fact is that it wouldn't have got us in the mess we are in today, because it had both the scruples and the competence to avoid it. Now, it's open season. I remember thinking how bitterly ironic it was that the government which got the country into the worst peacetime crisis in modern history was also the most inclusive, and led by a woman at that. ..."
"... The "greed is good" ethos took hold in the 1980s. I don't think Reagan was so much a cause as a symptom, but it's clearly visible in how US healthcare costs diverge from the rest of the world, as shown by Hans Rösling's famous chart . ..."
"... per Margaret Thatcher and the neoliberal ascendancy: "There is no society " ..."
This post is certain to do short shrift to the topic of individual character and cultural values. As you'll see
in due course, a long-standing friend, Professor Amar Bhide, sent me an encomium for a mentor of his, John
McArthur, who among other things, was the Dean of Harvard Business School from 1980 to 1995.
What is striking about Amar's description isn't simply how rare it is for America to produce someone who was
deeply engaged with the people around him, yet was also a first-class mind with wide-ranging interest, but that
we no longer seem to aspire to produce people (outside immediate families) whose attentiveness and concern can
and often does have a fundamental, positive impact on those around them. Amar points out that McArthur knew the
names of all of the service staff in every restaurant and club he frequented. Now that I am in the South, one
thing that really is different is that most people are courteous almost out of habit. Some of it can be a bit
tricky, like men who seem overly eager to behave chivalrously, particularly in public spots like restaurants.
But the behavior isn't a regional variant to the grating "Have a nice day" that too many hotel and restaurant
managers require employees to say (and it shows). Even if the attention is fleeting, the desire to make contact
is genuine.
Admittedly, few are in the sort of career or societal role to have the impact that McArthur did. But there
doesn't seem to be much societal interest in producing elder statesmen or rabbis or pastors or skilled
counselors, or individuals who could sometimes play pieces of those roles in narrower circumstances. Instead,
too many people simply want to get theirs and devil take the hindmost.
And the costs when this posture become acceptable, as opposed to marginal, are significant. As David put it
in our latest
post on Brexit
:
I hate to say this, as a lifelong Socialist from a very modest background, but the British system worked
in the past because it was pretty homogeneous. I don't mean literally everyone came from the same background
(they let me in, after all) but rather there was a cultural homogeneity in the civil service, in politics,
and even partly in the media, which had its origin in a certain upper middle class sense of duty, honesty
and competence, inherited from the serious professional classes of the nineteenth century. (It had its
analogue in the ethos of the honest tradesman, which we've lost as well). This culture was never universal ,
of course, but it was very powerful, and it coped quite well with the social changes after 1945, as more
women and people from much more diverse backgrounds entered the public sphere.
It changed not because the origin of its members was different (May and Johnson both came from Oxford, as
did Blair, and for that matter Thatcher) but because their ethos came from elsewhere. It came from the City,
from Management Consultancy, and from that part of the British Establishment which was always more
interested in Making Money than in Doing Things. It's almost as though the disreputable younger sons of the
Establishment, sent off to make money in Hong Kong after some scandal, had all returned to run the country.
You can mock the old High Seriousness of the public sphere if you like (too white! too male!) but the fact
is that it wouldn't have got us in the mess we are in today, because it had both the scruples and the
competence to avoid it. Now, it's open season. I remember thinking how bitterly ironic it was that the
government which got the country into the worst peacetime crisis in modern history was also the most
inclusive, and led by a woman at that.
I'm not sure the end of homogeneity was the driver of diminished respect for what was once called character.
In the US, I hazard that a bigger factor was the widespread acceptance of libertarian/neoliberal values. As
we've documented, that world view was marketed aggressively and very successfully by a loosely coordinated but
well funded right wing campaign, whose seminal document was the Powell Memo of 1971 which laid out the vision
and many of the tactics for their war on the New Deal and the community values that supported it. For instance,
it would have been well-nigh impossible for a Mike Milken, who'd gone to prison for securities law violations
(and was widely believed to have engaged in considerably more questionable conduct) to have rehabilitated
himself to the degree he did.
From Amar:
John McArthur, in memoriam
He was one of a kind -- and his kindness and empathy (a much used word I know) was unbounded. It touched
all from dining and custodial staff to taxi drivers. My parents apart, few other people have had such an
influence on me. (And he did me the honor of reading everything I read: every book every article, every
draft, the pages a sea of yellow highlight)
He was also astute, ruthless and got things done. His mind was extraordinary and his reading voracious
and eclectic -- although you would never guess it from his aw shucks manner and country bumpkin style.
I first actually talked to him in my second year as assistant professor. We had a long long lunch at his
corner table in the faculty club. We talked about everything -- except why we were having lunch. At the end
he said, "Perhaps you'd like to know why i asked you to lunch. Well I've been reading your stuff and I
wanted to put a face to the writing, to know who this person was who was writing this stuff."
A few days later a copy of Knight's Risk Uncertainty and Profit arrived in interoffice mail with one of
John's classic handwritten notes, which went something along the following lines. "I think this will suit
the way you think of the world."
I had never encountered the book in my doctoral studies, and it was revelatory.
We had lunches, lasting 2-3 hours nearly every year for the last 20 years after I left HBS. Always at the
Charles ("If we ate at HBS there would be someone stopping by every minute" he said. At the Charles it was
only every 10 minutes. And of course he knew every single waiter and waitress by name).
The stories he told at the lunches.. Such a pity he did not put his wisdom into a memoir. But that was
not his way.
The benefits of a "classical" education.
One of the main supports of the 'civilized' social interactions that you observe here 'Down South' is a
stubborn refusal to put a price on everything. It is not universal, but it lingers in pockets of calm salted
among the storms of modern living.
Welcome to the South.
I have some neighbors who are the opposite of me politically (in fact most of my neighbors) but are
wonderfully nice people on a personal level. Some of us who grew up here have had the opposite experience of
Yves and lived for awhile in the North where all that politeness is dismissed as a false front.
Which in many cases it is, but the usefulness of all that unthinking social glue should not be dismissed
out of hand. After decades of elites in thrall to Ayn Rand the country may be in need a few of those social
norms that beatnik rebels in the 1950s found so stultifying. Perhaps the most amazing thing about Epstein
was how all those rich people around him thought that his three teenager a day habit was perfectly
acceptable.
I don't know anything about anything, but after living in the Northeast for my whole life I spent 10
years in North Carolina. After a decade, I realized that I was
never
going to stop being a
Yankee, and that I detested "Southern courtesy" which mostly involved people telling me to "Have a
Blessed Day!"
I take part of this back: My favorite item of Southern Courtesy is that you can slander anyone as long
as you end the sentence with " bless his heart!"
Seriously, it's a different culture, and not one that I was ever comfortable with.
There is a great scene in the film "Terms of Endearment" where John Lithgow's character is in a
check out line at a grocery store. He encounters a rude cashier and remarks; "[She] must be from New
York."
The whole scene:
https://www.youtube.com/watch?v=bF8AZ-t2_Aw
The "blessed day" kick seems to have faded–haven't heard it in awhile.
But you are certainly right about the different cultures, although lots of people from up north are
moving down here so it's not as separated as it once was. Given that–per this blog–Wall Street culture
is driving the country into the ground all that polite Southern conservatism may begin to seem less
bad by comparison. There is certainly a religious context and a xenophobic context given Southerners'
general support for the military.
The "greed is good" ethos took hold in the 1980s. I don't think Reagan was so much a cause as a symptom, but
it's clearly visible in how US healthcare costs diverge from the rest of the world, as shown by Hans Rösling's
famous chart
.
Mohammed Ali wrote a poem about this that Guiness says is the world's shortest: "I; we". That civicness is
what we've lost. To me the downward trajectory steepened with Reagan/ Gordon Gecko/Greed is good. Then was
amplified and cemented by Bush: you're with us or against us; and the policy to fling bombs at any nation or
actor "anytime we feel like it" with absolutely no regard for any notion of common (global, societal,
collective) good. And thats the opposite of "civilization". Toss in a little post-meta-narcissism and the
cocktail is for the law of the jungle. When JFK was killed Hunter Thompson wrote that "the scum have murdered
the myth of American decency". Writ large now, across the world
Our elites became historically obsolete around the 1960s. The counter-attack on the attempted cultural
revolution that was The Sixties had no moral basis. It had and has nothing to fight
for
. It
only had There Is No Alternative and I'm Sorry, You Must Have Mistaken Me for Someone Who Gives a Sh_t. The
moral decay of such elites is unavoidable. The only solution is for them to no longer be the elites.
Further, we have reached a point in human development where no new elite of the previous type can fully unleash
the capacities that we have developed. This is part of why the wannabe replacements in the top 10% themselves
are so easily corrupted.
The good news is that we don't need any of them. Convincing each other of that will be quite helpful.
i remember reading a computer guy's victory article over the hippies. Ken Burns story of Woodstock shed
some interesting perspectives on those days. It was a real crack in the American veneer of "dirty hippies".
The elders of the time had bought into the military industrial complex idea that Ike had warned.
Wops. I can't let that Eisenhower quote pass uncommented on. In reading lots of history in my
retirement, I have read several books on the CIA. It seems that Ike didn't like wars, so he gave Allen
Dulles full rein. Iran remembers.
"Oh what a tangled web we weave, when we seek at the first ourselves to deceive"
. "For when thou hast been false to thine own self, thou canst not be true to any man"
Principles can be valuable in that I will still do business and have a discussion with a man that I
strongly disagree with, but I will have nothing to do with the unprincipled. My experience is that the
unprincipled are simply animals and nothing good but aggravation can come of it.
But there doesn't seem to be much societal interest in producing elder statesmen or rabbis or pastors or
skilled counselors, or individuals who could .
per Margaret Thatcher and the neoliberal ascendancy: "There is no society "
There's active discouragement of recognizing the essential equality of people no matter what their station
in life; this absolute discounting of "less important" people is a new thing in the last 20 – 30 years or so,
imo. At first I though it was simple snobbery, but it's too wide spread for that to be the explanation, imo.
Thatcher was an English politico. It is not what she said, but what she did that counts.
She is probably down in Dante's Inferno, Ring 8, sub-rings 7-10. (Frauds and false councilors.)
See, oh wayward sinners:
http://danteworlds.laits.utexas.edu/circle8b.html
Ah, you think that Milton should be at the bottom, eh? Then, I hope that he knows how to ice
skate. (He was the worst kind of 'class traitor.' [His parents were small store owner/managers.])
Ring 8 of the Inferno is for 'frauds' of all sorts, sub-rings 7-10 are reserved for Thieves,
Deceivers, Schismatics, and Falsifiers. Maggie should feel right at home there.
"They are casting their problems at society. And, you know, there's no such thing as society. There
are individual men and women and there are families. And no government can do anything except through
people, and people must look after themselves first. It is our duty to look after ourselves and then,
also, to look after our neighbours." – in an interview in Women's Own in 1987
And no government can do anything except through people, and people must look after themselves
first.
Oh, the subtle slyness of that formulation; it suggests first that democratic govt is the servant
of the will of the whole of the people, or society, and in the next breath suggests there is no whole
of the will of the people or unity or society. It suggests what is truly important are atomized
individuals and 'greed is good' and 'look out for number one' – the antithesis of society and unity
and democratic govt.
Thanks for this quotation. It appears to me to be classic case of pretzel logic. " It is our duty
to look after ourselves and then, also, to look after our neighbours." And who are "our neighbours"?
They are society – of which there is, according to Thatcher, "no such thing".
Once again, form totally swamps substance and leaves us treading water in a sea of nonsense. Have
we always allowed our leaders this much leeway with logic? Of course next to the statements of the
current US President, this statement appears perfectly logical.
Have you considered that perhaps the simplified "There is no society" rendering of what Ms. Thatcher
said has become the de facto standard because it captures the toxic antisocial policies she actually
practiced?
If someone would lie to themselves in order to be able to lie to others, then why should I respect them?
There is a large difference between respect and fear, just like there is a difference between jealousy and
anger. You know I have observed all of this among my C-level acquaintances ( 50 to 150 million ..)
Perhaps there is something to be said for leaving the Big Apple. And yes folks can seem to be more polite in
the fly over country.
I'd guess that the real divider is that the politeness is driven in part by the realization that we need
each other to a greater degree more in smaller communities.
I disagree about small communities. Plenty are subservient to a powerful interest with no scruples. It's
always been about accountability. Scale and speed have reduced the ability to hold bad actors accountableif
they are elite. The homogenized British civil service would naturally hold bad actors accountable if not
through legal means then exclusion.
Ostracism and other forms of social control were ruthlessly used by the in-group to keep its members'
behavior within a narrow range. Is it the methods of social control that have changed or the range of
behavior deemed acceptable to the dominant group?
As Lord Boothby's life illustrates, if certain behavior was deemed helpful to the state or otherwise
within bounds, then all sorts of behavior offensive to a common dustman's definition of "middle class
morality" would be tolerated. That suggests a parallel with the arc of Jeffrey Epstein's career.
Compare Epstein and his associate's behaviour with that of the English aristocracy during the
Edwardian era. I'll posit that this range of behaviours is class mediated, not era or milieu mediated.
With this as the 'face' of the 'ruling class,' is it any wonder that movements such as Calvinism and
Puritanism gained such popular support?
One suspects that Wilde's
Dorian Gray
struck a chord among the upper classes, the
scions of which must have remembered more than bad food and cold showers at their elite boarding
schools. Indoctrination always begins with the young.
I got my first full-time job in science in 1975. I was 19 and had to make a living while going to school.
The head of my lab, which was a leader in our field, and his colleagues in the department were very serious
about their work, but not about themselves. Most, but certainly not all, of them took their roles as exemplars
of how science should be very seriously, and it showed. Their mentorship has extended into the future, which is
now, but more on that later. My boss at the time is 93 and not in particularly good health. Earlier this month
I sent him a video of a talk in which our work was mentioned, as the close brush with a later Nobel Prize that
it was. None of that particular group is still in the field, but he was happy to see, again, how far reaching
our work has been. In a subsequent email I listed the 15 or so people I overlapped with in my 15 years in that
smallish lab, and the list is replete with very successful men and women. We were taught well.
My time there didn't end particularly well, though. There is one fundamental reason for that: The Bayh-Dole
Act of 1980. By the late-1980's our research had been completely co-opted by the desire to build a "start-up"
using our science as the foundation. This quite naturally attracted a gaggle of half-assed "entrepreneurs"
whose only thought was "how fast how much money?" The science suffered, those who knew how to make it work as
an important technology were ignored, and the whole apparatus collapsed in a heap of squandered money taken
from people who couldn't afford to lose it and recriminations that have still not abated, much. My boss retired
in the aftermath. He was a good scientist and a good person, but he was unable to see where he was headed. I
got axed, basically for not "liking" the lead half-assed entrepreneur, to which I responded, "I like him just
fine, but I don't trust him as far as I can throw him, and you shouldn't either." Q.E.D.
Now, 40+ years later the molecular and biomedical sciences are in crisis. Discoveries that will make a
difference are left undiscovered while "entrepreneurs" collect multiple research grants from NIH and NSF but
never, really, seem to get anywhere. Data from NIH show that the law of diminishing returns sets in as soon as
an academic scientist gets his or her second grant. There is no room for the next generation to begin, while
they have energy and vision (though older scientists have as much of both, if there were a future in it, and
the experience to get something done while mentoring the next generations).
Anyway, there is an important book to be written by someone who reads naked capitalism about the deleterious
effects of the neoliberal infestation of basic biomedical research that began with the Bayh-Dole Act; hmm what
else happened in 1980? I cannot see any prospect of recovery of the good will, good science, and ethos of
discovery that existed before, but until biomedical scientists understand what has happened to their world,
there is really no hope. They will continue to scrape for scraps, act in ways that should be foreign to them,
and soon forget why they became scientists in the first place. It has been my experience that "scientists" as a
group pay little attention to politics, and view that as a mark of distinction. Pity. It is said that Trotsky
IIRC wrote (paraphrase), "You may not be interested in politics, but politics is certainly interested in you."
Yes, indeed.
And I think the speed part of the equation may have a lot to do with the way we no longer value integrity
in people or in processes.
Yves cites the Powell memo as a cause, but I have to wonder if speed is the major cause of overall
decline. After all, humans were largely agrarian. One must be patient to grow things and get your reward
from that process on a regular yearly basis. In your field, painstaking research was the norm.
Now, so much is instant, and I think speed has caused much breakdown in human relations.
That is an amazing anecdote. Thank you very much for taking the time to post. Would you consider writing
an article on the topic? I am sure that Naked Capitalism would publish it. It is very important to get this
stuff documented for the record. Hope to hear more from you.
I will occasionally tell a cashier or greeter/security person who gives me the canned "have a blessed
day" spiel that; "I'm not from around here. You can tell me to have a rotten day. I won't complain." Sadly,
only about one in ten gets the joke and responds accordingly.
My best response to this gambit was from an older, "Traditionalist Evangelical" style woman at the gates of
the local WalMart. "That's okay. You are leaving this store. Your bad luck for the day is now over."
I have mentioned before how Stephen Covey – author of the "7 Habits of Highly Effective People" – did a
study of American self-help books for his doctoral dissertation. He found that until about the 1920s, most
American self-help books were about developing your character and Ben Franklin's books were typical of these.
However, about the 1920s on, there was a very noticeable shift in the emphasis of these books. Now it was all
about image and putting on a front. Books like "How To Win Friends and Influence People" by Dale Carnegie and
"Think and Grow Rich" by Napoleon Hill are typical here. So if you wanted to identify an inflexion point for
the importance of character in our culture, you would have to say that it started about a century ago.
This seems like the contrasts noted in David Riesman's
The Lonely Crowd
between the
'tradition-directed', 'inner-directed', and 'other-directed' character types. But are these fashions, or a
reflection of cultural needs driven by the movement from a largely agricultural society to an industrial
one? Can the poor afford good character? The yeoman on his plot can perhaps defy his society for a long
time, whereas the industrial worker or manager needs his job every day and must get along to keep it.
Thank you, Yves Smith. David's comment about his own rise caught my eye the other day, and I have been
thinking about it, too. I don't know David's exact circumstances in the U.K, but I was as scholarship boy in
high school and college in the U S of A. So here I am, with an "influential" job in publishing, which still can
be very Waspy. (And that includes the women.)
The current issue in some respects is not that the homogeneity produced such perfect results (for instance,
we should not forget longstanding problems like discrimination against Jews in academia and the CIA as a kind
of Waspy adventure-fantasyland). Our current moral dilemma is that no one talks about character. In that
"homogeneous" time, one could get rid of a troublesome man by noting that he wasn't a serious man. Not being a
"serious man" was a major impediment. Now, we think that everyone is serious, with serious opinions, which we
may not judge. Marianne Moore reputedly "did not suffer fools gladly." Now she would be considered an uptight
collaborator with patriarchy.
The language for assessing character is no longer used: Probity. Thrift. Reliability. Consistency. Taking
the long view. Equanimity. Justice (without qualifiers like "social"). Discernment. Good judgment. Think about
how little one sees these words used these days in discussing chararcter. Instead, we get hagiographies of John
McCain, a spoiled child, blowhard veteran, and lousy politician. We get Madeleine Albright discoursing on
special places in hell where any woman with her own point of view can be consigned.
Many of the agreements that held U.S. society together had to be dismantled: That is part of what the New
Deal was for. FDR knew that the discrimination against its own citizens wasn't going to last and that the
economic collapse made it all worse. And yet even he couldn't eliminate racial discrimation.
Nevertheless, we are a long way from FDR, a man of character, and Eleanor Roosevelt, a woman revered for her
character, when we now pretend that celebrities like McCain and Hillary Clinton are worthy of leading us, let
alone respect.
> FDR knew that the discrimination against its own citizens wasn't going to last and that the economic
collapse made it all worse. And yet even he couldn't eliminate racial discrimation.
I have read that FDR tried to break with the Southern Democrats in 1937, but I need to hunt down the
reference. If so, good for him.
I can't find easy to access articles, but I seem to remember this book, "Roosevelt's Purge."
The influence of the South on the Democratic caucus was known and complained about. LBJ's pitch in the
1956 convention was that he could control the South if need be.
Didn't that wonderfully collegial bunch include the Best and Brightest who killed over 3 million Southeast
Asians and some 10000s of Americans in the 1960s-1970s? Or is this a later age cohort? New Deal/Great Society
liberalism's strategic interventions killed more people than neoliberalism's endless wars, lest we forget.
Not certain the purpose of the comparison, but the Colonists, the Revolutionaries, and Blue and Grey
federalist armies, the MIC, etc. have been eliminating "others" since forever.
The dictionary definition of
character
is "the mental and moral qualities distinctive of an
individual."
I associate the term with a kind of neo-Victorian anglophile section of the US political right who put it
around starting in the 1980s as a kind of synonym for social conformity and obedience to authority. I hate to
admit it, but I have never really been able to figure out what it means, and have regarded it as hot air.
The dictionary definition suggests it could just be equal to the word
individual
, since the
qualities of an individual are equal to an individual. In this case, as Mark Twain put it, "Why write
'metropolis' when you get the same pay for 'city?"
If the word is meant to draw attention to the qualities of a person as separate from their individuality,
then it gets a little more interesting. Then you get to identify and name the qualities and what they mean, and
you get to find out who has the power to do that. I remember our neo-Victorians were big on using very
conventional abstract universals to corral social behavior. One of my current favorites is "personal
responsibility," which is often employed by congress persons as a rationale for policies in support of debt
peonage and medical bankruptcy, but not applied to their own role in mass murders.
The colloquial meaning of
character
seems to be the only one that carries a meaning that goes
beyond any synonym. There are plenty of real characters out there, still. (One of my favorites was the subject
of the film
Dirtbag
.)
This article takes the word in a direction I haven't seen before: that full engagement with others is a
quality necessary to full individuality. That seems like a much less dubious use of the word.
"I associate the term with a kind of neo-Victorian anglophile section of the US political right who put
it around starting in the 1980s as a kind of synonym for social conformity and obedience to authority."
Were he still around, the late Martin Luther King Jr. might take issue with that, pardon the pun,
characterization. Which is not to say that, as with any other word, it is not subject to misuse by those of
ill intent.
I often think that the quote of MLK about the "content of their character" is such a good example of
how we are living in a bizarro world when people talk about Obama .
Talk about a person whose only good quality is the color of his skin.
A "black" man became president. Which is a good thing that broke one tradition .. but that "man" was in
no way possessing of any "good" character.
Like a carnival trick . a major schmuck was promoted in the cultural ethos as having been good, merely
because he is black . but without any thought as to the POOR quality of his character.
In a reasonable world, no one would allow obama to be proclaimed in any way , as an example of MLK's
vision of a man being judged by "the content of his character, and not the color of his skin."
No, because Amar is an academic, so unless one said otherwise, "read everything I wrote" would mean
published work only. Reading every draft is extraordinary.
Some years ago, the president of a small liberal arts college began to get to know his new home. His
predecessors normally did this at faculty teas, president's dinners for donors, the odd picnic with students,
and informal gatherings among staff. In a world before deanlets, assistant assistants, and chiefs of staff,
that was a small world.
But this new president inverted the pyramid. His first gathering was with the custodial and kitchen staffs,
groundskeepers, and the like, whom he eventually got to know on a first name basis. They took note, as did the
faculty, who still ran the place.
Fast forward a few decades. Another new president's first task – backed by a like-minded board – was to
outsource all those jobs. In a small college town, losing its other large employers to shutdowns and
consolidations, scores more people were thrown out of work, adding to town-and-gown tensions.
An alternative for staff tossed out of work and with few options was to become a local hire for the
out-of-town outsourced employer. That meant doing the same job for less pay, without benefits, with no union or
worker protections, and without a relationship with their absentee employer. Profits left the local economy as
fast as those employer-employee relations at the college. But the new president checked a box on his CEO-like
resume.
A modest example, it captures several of neoliberalism's core objectives: imposing business priorities and
methods on cultural institutions, outsourcing, union busting, and aggregating revenue and profits in a handful
of distant locations.
The same work got done, often by the same people, but the culture was irrevocably weakened. All for a few
dollars more, fewer than were paid to the plethora of new staff and their myriad of business plans, intended to
make faculty and students responsible for nothing but themselves.
And, sadly, the only people utilizing "direct action" remedies for these systemic maladies are lone
nutter types.
Imagine America with a well organized and militant underground movement.
The present day 'Masters of the Universe' are building up their organs of opression to combat such an
eventuality. This will end up being a self-fulfilling prophecy.
There is a sort of world underground, as noted in this very publication ('Add Oil', a few days ago).
It seems to be 'open source' as 'Add Oil' says, and constantly evolving. Random other examples: Gilets
Jaunes, Occupy Wall Street, Tahrir. As the system of the Ruling Class weakens and casts more people off,
they become available for this sort of activity.
What character is, is wanting and trying to have character – we all know what that means and know it is a
tough row to hoe! So it was gotten rid of by those unwilling to make the effort – sort of like "memorising" was
gotten rid of with clever attacks on its "efficacy". Katy, bar the door!
Civility and character are often aligned but when civility is chiefly a cultural pose it says next to
nothing about how repressed, angry, selfish or incompetent someone is. The following is a synopsis of Marilynne
Robinson's remarkable book "Mother Country" published in the 1999 (Britain has a minimum wage now).
'So asks a book-within-the-book where Robinson looks to the past, even unto Poor Law of the 14th Century,
for the secrets of national character. What does she find? That beneath the famous civility the British have
always wasted lives and credited the idea of human surplus; that there have in the past been policies of
depopulation. That there is a lack "of positive, substantive personal and political rights." That industrial
illness and accident are common and customary. That there has never been a minimum wage. That many factors,
including the Official Secrets Act, restrict the flow of information. That the (non-elected) Permanent Civil
Service is professional and very powerful. That bumbling amateurism is still respectable, with chilling
ramifications–an inability to gather meaningful statistics, for instance, or to keep track of such crucial
documents as half the mortality data on workers at Windscale. That the citizenry is passive. That it is hard to
locate responsibility, and that profit is motive and justification enough for almost anything.'
So I am here wondering where I obtained my sense of "morality" and "ethical" behaviour. My mother emphasized
that truthfulness and honesty were imperative. I rarely lied to her or stole from her. My primary teachers
emphasized working hard and finishing work to the point that it was the best I could do (one teacher especially
said that I should work to my best abilities and I tried to do that). My secondary teachers taught me how to
study for tests, how to memorize poetry and what was worth learning (via the curriculum). My university
professors talked about analyzing works of literature and how such analysis helped us understand life as lived
by all of us. My marriage taught me how to put others' physical and emotional needs ahead of my own. My old age
revealed to me that knowing oneself was a most frightful thing to engage in.
I never thought that I would have to learn about how greed works in the banking system; how false prophets
are everywhere; how great wealth pollutes the character as well as the environment; that pornography is
considered entertainment; that politics has its very own pollutants that taint our shared world; and so on. I
think it is well past time to leave.
I'd love to join you in exploring that 'Great Void' but I have too many responsibilities left here in the
'Realm of Maya.'
That's the lesson I did not expect to learn in my middle age; that there is always going to be some
responsibility needing one's attention and effort.
I am relearning with a vengeance the marriage lesson you mention.
As for knowing myself, well, the older I get, the more I realize that I know nothing.
Keep the faith!
Very nice eulogy. It makes me remember people with that inner strength in my life. There have been quite a
few. The difference between an ordinary good character and a great one is energy, imo. People who have the
energy to share their good thinking and the patience to listen are the best. They just operate on a slightly
higher frequency. McArthur may have been one in a million, but he influenced millions. So it consoles me to
think that there are enough people of good character in this world to turn things around. Just because I wasn't
personally acquainted with them, doesn't mean I wasn't influenced by them. The very function of society.
When I was hired for a non-management position several years ago, the CEO of my company came up to me on my
first day and addressed me by name to welcome me to the job. I was rather shocked that she even knew I'd been
hired. She was a 30+ year employee of the company who had worked her way up from being a freelance writer. Many
of my coworkers then had been with the company for decades too.
She retired a few years into my tenure and the place really hasn't been the same since she left – the kind
of neoliberal MBA mentality well known to NC readers has come to the forefront. Pretty sure I'm not the only
one who misses her leadership and character.
I'm all in favor of gentlemanly manners and am trying to teach them to my son. On the other hand, there have
been a lot of people who could be flawed in their personal dealings but dedicated to the greatest good. And
many slave owners who were courtly and thoughtful, especially regarding the opposite sex.
I'm sure that Mr. McArthur was a great guy. But what was the HBS up to while he was dean and what did that say
about his deeper values? This is from a Newsweek story from a couple years ago about the evolution of
shareholder primacy:
" the new belief that the shareholder was supreme, absolving managers of responsibility to any
"stakeholder" -- employees, communities, society itself -- except shareholders. The bottom line was all that
mattered.
John McArthur, then dean of HBS, liked Jensen's message and invited him to HBS as a visiting professor in 1984.
In a 1999 vanity project about McArthur's tenure, The Intellectual Venture Capitalist, HBS trotted out a
rationale for hiring him: "Jensen had been interested in testing his unorthodox ideas against the experiences
of practitioners and had agreed to come to HBS on a temporary basis to get increased access to high-level
decision makers in business." Hogwash. "Theory of the Firm" was testable only in the sense that Keynesian
economics is testable, or a theory of whether a hurricane might sweep beachfront houses out to sea is
testable -- you can debate the issues until you're blue in the face, but at some point, you just have to see what
happens.A course grounded in agency theory that Jensen developed at HBS -- The Coordination and Control of Markets
and Organizations -- was designed to make students more "tough-minded" and shift them from the "stakeholder model"
of organizational purpose. It became one of the most popular electives at the school. Agency theory wasn't new,
but Jensen's resurrected form of it provided academic justification for the takeover movement, and HBS provided
its revolutionary soldiers."
Yves, this post and Jerri-Lynn's companion post of Bill Black on corruption, are important discussions of
our dishonorable libertarian zeitgeist.
Ironically, I think that the origins of modern neoliberal libertarianism can be traced back to Woodstock and
its evil double Altamont. It can be no coincidence that Trump was played off the convention stage by a
recording of the Stones'
You Can't Always Get What You Want
.
I think that George Monbiot describes it well:
It is a pitiless, one-sided, mechanical view of the world, which elevates the rights of property over
everything else, meaning that those who possess the most property end up with great power over others.
Dressed up as freedom, it is a formula for oppression and bondage. It does nothing to address inequality,
hardship or social exclusion. A transparently self-serving vision, it seeks to justify the greedy and
selfish behaviour of those with wealth and power.
George Monbiot,
Why Libertarians Must Deny Climate Change
The Guardian, January 6, 2012
Just because something is counterintuitive does not mean it´s insightful – mostly it means that it is
just plain wrong! In this case, trotting out Woodstock as the root of neoliberal anything is absurd. The
anti-corporation, anti-war, anti-empire feelings were palpable (I was there – you can hear them paging my
twin brother "Alan Fay" on the album). The sense of community and brotherly love was REAL – as was the
incipient reactionary response. Can´t have those kinds of ideas gaining traction in a capitalist society!
I travel to Georgia frequently. I've seen that state's rural and urban and in between. While I did encounter
some of the "southern hospitality" people so often cite, it was usually present in an upper-class milieu and
did not leave much of an impression on me, as it felt "church-smile" inflected.
What did leave an impression on me was the homelessness and vagrancy, especially in Atlanta, where on my way
back to the airport, I had a man practically beg me to let him carry my luggage so as to have a reason to give
him alms. I had, on that same trip and on subsequent trips to the state, many similar encounters. These people
were rather pushy–it was disturbing to me in that their hustle was driven by obvious desperation.
I currently live in Indiana, in a relatively affluent town, though I'm working class and reside in a modest
apartment. Until recently, I did not own a car. I would walk to the grocery store a couple times a week. On one
such walk, a homeless man asked if I had a light for his cigarette. I didn't, but we walked together for about
twenty minutes. During our walk, I asked him about his life.
According to this man, the homeless in our town live in a tent settlement in the woods, which is the only
place the police will tolerate such a gathering because it's out of sight (and therefore out of mind for the
people that matter). He explained to me that, whatever the hardships for the homeless in our town, it was
nothing compared to Atlanta, where he lived prior. He described the city as having the "hardest" streets he'd
ever experienced. I should probably mention that this man was likely in his late 40s or early 50s, meaning he'd
experienced a lot! It was so terrifying, he had to flee north.
That's what comes vividly to mind when I think of the "South". The politeness stuff hardly rates in
comparison.
as a total outsider, i feel that the veneer of the "southern hospitality" is intentionally to paper over
and ignore the continuation of unjust systems.
this kind of "treating people with basic human decency" can and does very easily morph into "be quiet and
say nothing while your social betters ride roughshod over everyone because you have no standing yourself to
oppose them and it is considered impolite for YOU to point out these discrepancies".
i am torn between enjoying the image of sociability and detesting it. i know for a fact that most of it
is a front, and that many people are talked badly about behind closed doors and over back fences, and that
many people are shut out through these "kindnesses" (you can't complain as long as they didn't spit in your
face). a lot of it is about maintaining pecking order. is -that- character? i think not.
but what do i know?
Alabama doesn't have that many homeless because housing (particularly trailers) are cheap. Not saying
those homeless are treated well, but there are shelters and services.
Atlanta is also an Old South city whereas Birmingham grew up after the Civil War.
As a Southern exile of Faulkner's second type, now living in the UK, I respectfully disagree slightly with
the statement:
.cultural homogeneity in the civil service, in politics, and even partly in the media, which had its
origin in a certain upper middle class sense of duty, honesty and competence, inherited from the serious
professional classes of the nineteenth century.
I think it goes much deeper than that back to a perhaps medieval sense of
noblesse oblige
.
You see this most starkly in the difference between Kate Middleton, who appears all over the place at the
most mundane functions, allowing herself to be photographed with all and sundry, and Meghan Markle, who jets
about in private planes on vacations and demands an entire section for herself at Wimbledon, asking guards to
stop people photographing her.
Like so many of the 1%, I think her attitude could best be summed up as
noblesse oublier
.
I've been under the impression that character was quite valuable to those who assume to be my superiors,
particularly at work. "Builds character" they'd say. After about 30 years of that bullshit, I finally had the
gall to ask the CEO about why he doesn't he build his *own* character, as opposed to building everyone elses.
They love building character, as long as it's someone elses.
Nope, don't work there anymore.
I have always wondered why there are so many shootings today. The AR-15 came out in the 60s and I felt no
fear going through a public high school in the late 70s. Now, it's "gun control/do something" vs improving the
character of our country's citizens. Yeah, I know – trying to improve the character of our citizens is not very
hash tag-able/ would be extremely difficult to do. But gun control is made for hashtags. We are doomed.
The USA centered global neoliberal empire falls from grace at alarming speed.
Just the discussion of this possibility would be unthinkable in 90th -- the period of triumphal advance of neoliberalism all over
the globe. So thinks did change although it is unclear what is that direction of the social change -- neo-fascism or some kind of return
to the New Del Capitalism (if so who will replace previous, forged by Great Depression political alignment between trade unions and
management against the financial oligarchy, which financial oligarchy managed to broke using neoliberalism as the Trojan horse and bribing
CEOs)
Om a was original fascist movements were also a protest against the rule of financial oligarchy. Even anti-Semitism in Germany was
a kind of perverted protest against financial oligarchy as well. They were quickly subverted and in Germany anti-Semitism degenerated
into irrational hatred and genocide, , but the fact remains. Just looks at
NSDAP program of 1920 . Now we have somewhat
similar sentiments with Wexner and Meta group in the USA. To say that they do not invoke any sympathy is an understatement.
The problem with empires that they do not only rob the "other people". They rob their own people as well, and rob them hard. The
USSR people were really robbed by Soviet military industrial complex and Soviet globalist -- to the far greater extent then the USA
people now. People were really as poor as church rats. Epidemic of alcoholism in the USA resembles the epidemic of narcoaddtion in the
USA --- both are signs of desire then there is no jobs and now chances.
Like the collapse of the USSR was the result of the collapse of bolshevism, the collapse of the USA can be the result of the collapse
of neoliberalism. Whether it will take 10 or 50 years is unclear, but the general tendency is down.
The competitors has grown much strong now and they want their place under then sub. That means squeezing the USA. Trump did agrat
job in alientaing the US and that was probably the most important step is dismantling the USA empire that was taken. Add to that trade
war with China and we have the situation that is not favorable to the USA politically in two important parts of the globe.
Add to this Brexit and we have clear tendency of states to reassert their sovereignty, which start hurting the USA based multinationals.
The only things that work in favor of the USA is that currently there is no clear alternative to neoliberalism other then some kind
of restoration of the New Deal capitalism or neo-fasist dictatorship.
Notable quotes:
"... Self-discipline, self sacrifice and self restraint are the prices which must be paid for a civilization to survive, much less flourish, and Americans are increasingly unwilling to pay up. The America of a generation or two down the road will have the social cohesion of El Salvador. ..."
"... Being that history is always written by the tyrant of the time (which in our case was definitely behind the two last empires and a big player in Rome as and Spain as well) people are also led to believe that empire is a desireable state of cicumstance. It never was. Its the ambitions and conquistador actions of the collective psychopath. They feed on the strength of civilizations and utilize it for megalomaniac ambitions over power of others and power over everything. ..."
"... Those of you hoping for the end of American Empire need to think about what would replace it. ..."
"... You are completely delusional. The world is not better off under American stewardship. We don't need and shouldn't want anything to replace it. We don't need and shouldn't want any empire ruling the world. We would be better off without any state at all, so we could finally be free people. ..."
"... And no it probably wouldn't be better off under the Chinese. Although if the world stopped respecting American IP law, that would be a huge positive step forward. ..."
Years ago, Doug Casey mentioned in a correspondence to me, "Empires fall from grace with alarming speed."
Every now and then, you receive a comment that, although it may have been stated casually, has a lasting effect, as it offers
uncommon insight. For me, this was one of those and it's one that I've kept handy at my desk since that time, as a reminder.
I'm from a British family, one that left the UK just as the British Empire was about to begin its decline. They expatriated to
the "New World" to seek promise for the future.
As I've spent most of my life centred in a British colony – the Cayman Islands – I've had the opportunity to observe many British
contract professionals who left the UK seeking advancement, which they almost invariably find in Cayman. Curiously, though, most
returned to the UK after a contract or two, in the belief that the UK would bounce back from its decline, and they wanted to be on
board when Britain "came back."
This, of course, never happened. The US replaced the UK as the world's foremost empire, and although the UK has had its ups and
downs over the ensuing decades, it hasn't returned to its former glory.
And it never will.
If we observe the empires of the world that have existed over the millennia, we see a consistent history of collapse without renewal.
Whether we're looking at the Roman Empire, the Ottoman Empire, the Spanish Empire, or any other that's existed at one time, history
is remarkably consistent: The decline and fall of any empire never reverses itself; nor does the empire return, once it's fallen.
But of what importance is this to us today?
Well, today, the US is the world's undisputed leading empire and most Americans would agree that, whilst it's going through a
bad patch, it will bounce back and might even be better than ever.
Not so, I'm afraid. All empires follow the same cycle. They begin with a population that has a strong work ethic and is self-reliant.
Those people organize to form a nation of great strength, based upon high productivity.
This leads to expansion, generally based upon world trade. At some point, this gives rise to leaders who seek, not to work in
partnership with other nations, but to dominate them, and of course, this is when a great nation becomes an empire. The US began
this stage under the flamboyant and aggressive Teddy Roosevelt.
The twentieth century was the American century and the US went from victory to victory, expanding its power.
But the decline began in the 1960s, when the US started to pursue unwinnable wars, began the destruction of its currency and began
to expand its government into an all-powerful body.
Still, this process tends to be protracted and the overall decline often takes decades.
So, how does that square with the quote, "Empires fall from grace with alarming speed"?
Well, the preparation for the fall can often be seen for a generation or more, but the actual fall tends to occur quite rapidly.
What happens is very similar to what happens with a schoolyard bully.
The bully has a slow rise, based upon his strength and aggressive tendency. After a number of successful fights, he becomes
first revered, then feared. He then takes on several toadies who lack his abilities but want some of the spoils, so they do his
bidding, acting in a threatening manner to other schoolboys.
The bully then becomes hated. No one tells him so, but the other kids secretly dream of his defeat, hopefully in a shameful
manner.
Then, at some point, some boy who has a measure of strength and the requisite determination has had enough and takes on the
bully.
If he defeats him, a curious thing happens. The toadies suddenly realise that the jig is up and they head for the hills, knowing
that their source of power is gone.
Also, once the defeated bully is down, all the anger, fear and hatred that his schoolmates felt for him come out, and they
take great pleasure in his defeat.
And this, in a nutshell, is what happens with empires.
A nation that comes to the rescue in times of genuine need (such as the two World Wars) is revered. But once that nation morphs
into a bully that uses any excuse to invade countries such as Afghanistan, Libya, Iraq and Syria, its allies may continue to bow
to it but secretly fear it and wish that it could be taken down a peg.
When the empire then starts looking around for other nations to bully, such as Iran and Venezuela, its allies again say nothing
but react with fear when they see the John Boltons and Mike Pompeos beating the war drums and making reckless comments.
At present, the US is focusing primarily on economic warfare, but if this fails to get the world to bend to its dominance, the
US has repeatedly warned, regarding possible military aggression, that "no option is off the table."
The US has reached the classic stage when it has become a reckless bully, and its support structure of allies has begun to de-couple
as a result.
At the same time that allies begin to pull back and make other plans for their future, those citizens within the empire who tend
to be the creators of prosperity also begin to seek greener pastures.
History has seen this happen countless times. The "brain drain" occurs, in which the best and most productive begin to look elsewhere
for their future. Just as the most productive Europeans crossed the Pond to colonise the US when it was a new, promising country,
their present-day counterparts have begun moving offshore.
The US is presently in a state of suspended animation. It still appears to be a major force, but its buttresses are quietly disappearing.
At some point in the near future, it's likely that the US government will overplay its hand and aggress against a foe that either
is stronger or has alliances that, collectively, make it stronger.
The greatest (so called) threats to America- the Russians, Chinese, Iranians, North Koreans, ISIS, ( fill in the blank for
the latest overseas bogeyman-of-the-week ) pale into a wisp beside the ongoing disintegration of American traditional family life.
Self-discipline, self sacrifice and self restraint are the prices which must be paid for a civilization to survive, much less
flourish, and Americans are increasingly unwilling to pay up. The America of a generation or two down the road will have the social
cohesion of El Salvador.
You also cant warn people about the collapse of empire either. People notoriously go into denial about it and it shocks the
**** out of everybody. Since empires bluff and bluster at the end its all to easy for people want to believe.
Being that history is always written by the tyrant of the time (which in our case was definitely behind the two last empires
and a big player in Rome as and Spain as well) people are also led to believe that empire is a desireable state of cicumstance.
It never was. Its the ambitions and conquistador actions of the collective psychopath. They feed on the strength of civilizations
and utilize it for megalomaniac ambitions over power of others and power over everything.
Those of you hoping for the end of American Empire need to think about what would replace it. if you think that the world would
enter the age of Aquarius and peace will rule the planet you are extremely naive and stupid. If you think that the Chinese would
be more benign rulers you are mistaken. The only reason China doesn't use its military to dominate other countries is because
it is kept in check by the US.
You are completely delusional. The world is not better off under American stewardship. We don't need and shouldn't want anything
to replace it. We don't need and shouldn't want any empire ruling the world. We would be better off without any state at
all, so we could finally be free people.
And no it probably wouldn't be better off under the Chinese. Although if the world stopped respecting American IP law, that
would be a huge positive step forward.
In the real world, Chinese terrorists are just as bad as American terrorists. Despite the most popular hypnosis gripping the
American psyche, you can't have liberty or justice as long as either one is in charge. Whether the Chinese would be worse is debatable.
It's not like America has some great track record to compete against. Their reign has been a complete disaster for human rights.
If China became the new empire we wouldnt live under it. It would be at least 100 years out. This empire will screw everybody
epically first, plus we have decline weather patterns with super solar grand minimum. Also those people's who may see that next
empire will deal with whatever circumstances present themselves and they wont give one **** what we think about it.
Basically power has kept moving west. Nobody will forget the depravity of this one. If written about accurately this one will
be remembered most for the medical tyranny and intentional damage it did to human beings through injections and modified good
supply, as well as moral depravity and proxy sadistic terrorism. Remember empire backed terrorist groups trafficked children and
harvested organs. You can miss it if you want, few will.
I do not _hope_ for an end of the American Empire, and I dread what is going to replace it. Howsoever, no empire lasts forever,
and our empire is near its end. The Chinese are relentlessly cruel, and that's in their genotype. I probably won't live to see
them take over the scraps and bits and pieces of our former empire. Those who are alive and in the prime of their lives when that
happens will suffer unimaginably while they live, and their blood will cry out from the grave after they die. It makes me so heart-sick
I can't bear to think about it for long, but our progeny will be forced to live it without let or hindrance.
Lets find out the whole details of what they have done to our biology and our children's first before we say how cruel China
might be. For starters look at what US and British did in Africa compared to China and Russia's involvement there. They are doing
deals and not killing anybody, same with Venezuela.
Where else you going to go? What nation ISN'T broke? Europe is going to hell. So is South America. Africa has always been hell.
Asia? Look what's going down in Hong Kong. China's broke. Make no mistake, the USA is in decline. But so is the rest of the world...
regardless of what is printed China is not falling, they have a plan and have only advanced it. The debt side will not hurt
them because they have been poor before and they have a route to success. They do not have resources but the industrial side is
needed everywhere in the world. We are talking about a nation that literally prospered off of our garbage and resells it back
to us! Think about it we use something up and pay them to take it away, they recycle it and resell it to us again and moved a
nation 4x our population forward!
You really think debt will hurt them, especially the way the US determines debt! A huge portion of it is in the infrastructucture
in China and along the BRI which will have returns over time, just as if we in the states rebuilt all our infrastructure by living
wage employment rather than MIC investment!
Yes, all are broke. Assisted suicides of countries all over the world. Emphasise on "assisted".
Nations have been demoralized (the US most certainly, check Yuri Bezmenov) we are in destabilization phase already, collapse
has to be next, it is unavoidable now. This will not end well, ignore at your own risk!
I am not talking about countries, just some Life Hedge Regions left in the world. People with brains and resources, you don
need a Life Hedge Property! Away from Northern Hemisphere, away from Ring of Fire, etc... Get in touch. lifehedge(at)
protonmail.com
What got America into trouble was when Americans who thought of themselves as being "exceptional" became exceptionally stupid.
The best and the brightest have already left America. Any wonder why we now depend on Russia to send our astronauts up on their
rockets into space, or depend on China, South Korea, and Japan for our electronic products, or why better health care is found
in other places outside the U.S., why our educational system has become poorer than what it was 60 years ago, etc.,?
When we decided to financialize everything and make nothing but investments we crippled our advancement.
When we decided to take the brightest minds in the world and recruit them into the US and then rather than advance the world
with true science, we offer them lucrative money to enter financial markets to use their knowledge in that field.
We take the ones with morals and principles that choose to actually remain in science and then corrupt them over time with
money/fame to regurgetate whatever their contractor chooses or lose funding for their projects.
We have corrupted every aspect of advancement and now just use our fake printed money to force the desperate to bend to our
will.
Good read on the subject of empires Sir John Glubb - The fate of empires and Search for survival.
We are probably near the end of the American Empire. And a fascinating by product of the HK protests is that we may well be near the end of Chinese Communism.
Nothing moves forward in a straight line. They move up and down. Empires are no exception. The Romans had their ups and downs
throughout the course of their empire. You never know when a down cycle is the end but people who want it to end will always write
articles like this.
American dominance might be drawing to an end....or it might be gearing up to go another 200 years. Nobody knows so it's a
waste of time to speculate.
Thatcher was an English politico. It is not what she said, but what she did that counts. She is probably down in Dante's Inferno,
Ring 8, sub-rings 7-10. (Frauds and false councilors.) See, oh wayward sinners:
http://danteworlds.laits.utexas.edu/circle8b.html
Ah, you think that Milton should be at the bottom, eh? Then, I hope that he knows how to ice skate. (He was the worst kind
of 'class traitor.' [His parents were small store owner/managers.])
Ring 8 of the Inferno is for 'frauds' of all sorts, sub-rings 7-10 are reserved for Thieves, Deceivers, Schismatics, and Falsifiers.
Maggie should feel right at home there.
While details on Epstein death are not interesting (he ended like a regular pimp) the corruption of high level officials his case
revealed in more troubling.
Notable quotes:
"... Epstein was released, and various lawsuits were filed against him and settled out of court, presumably in exchange for silence. The media was quiet or complimentary as Epstein worked his way back into high society. ..."
"... What would I do if I were Epstein? I'd try to get the President, the Attorney-General, or the U.S. Attorney for the Southern District of New York to shut down the investigation before it went public. I'd have all my friends and all my money try to pressure them. If it failed and I were arrested, it would be time for the backup plan -- the Deal. I'd try to minimize my prison time, and, just as important, to be put in one of the nicer federal prisons where I could associate with financial wizards and drug lords instead of serial killers, black nationalists, and people with bad breath. ..."
"... What about the powerful people Epstein would turn in to get his deal? They aren't as smart as Epstein, but they would know the Deal was coming -- that Epstein would be quite happy to sacrifice them in exchange for a prison with a slightly better golf course. What could they do? There's only one good option -- to kill Epstein, and do it quickly, before he could start giving information samples to the U. S. Attorney. ..."
"... Trying to kill informers is absolutely routine in the mafia, or indeed, for gangs of any kind. ..."
"... Famous politicians, unlike gangsters, don't have full-time professional hit men on their staffs, but that's just common sense -- politicians rarely need hit men, so it makes more sense to hire them on a piecework basis than as full-time employees. How would they find hit men? You or I wouldn't know how to start, but it would be easy for them. Rich powerful people have bodyguards. Bodyguards are for defense, but the guys who do defense know guys who do offense. And Epstein's friends are professional networkers. One reporter said of Ghislaine Maxwell, "Her Rolodex would blow away almost anyone else's I can think of -- probably even Rupert Murdoch's." They know people who know people. Maybe I'm six degrees of separation from a mafia hit man, but not Ghislaine Maxwell. I bet she knows at least one mafioso personally who knows more than one hit man. ..."
"... Or, if you can hire a New York Times reporter for $30,000 ( as Epstein famously did a couple of years ago), you can spend $200,000 on a competent hit man to make double sure. Government incompetence does not lend support to the suicide theory; quite the opposite. ..."
"... Statutory rape is not a federal crime ..."
"... At any time from 2008 to the present, Florida and New York prosecutors could have gone after Epstein and easily convicted him. The federal nonprosecution agreement did not bind them. And, of course, it is not just Epstein who should have been prosecuted. Other culprits such as Prince Andrew are still at large. ..."
"... Why isn't anybody but Ann Coulter talking about Barry Krischer and Ric Bradshaw, the Florida state prosecutor and sheriff who went easy on Epstein, or the New York City police who let him violate the sex offender regulations? ..."
"... Krischer refused to use the evidence the Palm Beach police gave him except to file a no-jail-time prostitution charge (they eventually went to Acosta, the federal prosecutor, instead, who got a guilty plea with an 18-month sentence). Bradshaw let him spend his days at home instead of at jail. ..."
"... In New York State, the county prosecutor, Cyrus Vance, fought to prevent Epstein from being classified as a Level III sex offender. Once he was, the police didn't enforce the rule that required him to check in every 90 days. ..."
"... Trafficking is a federal offense, so it would have to involve commerce across state lines. It also must involve sale and profit, not just personal pleasure. ..."
"... Here, the publicity and investigative lead is what is most important, because these are reputable and rich offenders for whom publicity is a bigger threat than losing in court. They have very good lawyers, and probably aren't guilty of federal crimes anyway, just state crimes, in corrupt states where they can use clout more effectively. Thus, killing potential informants before they tell the public is more important than killing informants to prevent their testimony at trial, a much more leisurely task. ..."
"... Geoffrey Berman, U.S. Attorney for the Southern District of New York, is the only government official who is clearly trustworthy, because he could have stopped the 2019 Epstein indictment and he didn't. I don't think Attorney-General Barr could have blocked it, and I don't think President Trump could have except by firing Berman. ..."
"... "It was that heart-wrenching series that caught the attention of Congress. Ben Sasse, the Republican senator from Nebraska, joined with his Democratic colleagues and demanded to know how justice had been so miscarried. ..."
"... President Trump didn't have anything personally to fear from Epstein. He is too canny to have gotten involved with him, and the press has been eagerly at work to find the slightest connection between him and Epstein and have come up dry as far as anything but acquaintanceship. But we must worry about a cover-up anyway, because rich and important people would be willing to pay Trump a lot in money or, more likely, in political support, if he does a cover-up. ..."
"... he sealing was completely illegal, as the appeals court politely but devastatingly noted in 2019, and the documents were released a day or two before Epstein died. Someone should check into Judge Sweet's finance and death. He was an ultra-Establishment figure -- a Yale man, alas, like me, and Taft School -- so he might just have been protecting what he considered good people, but his decision to seal the court records was grossly improper. ..."
"... Did Epstein have any dealings in sex, favors, or investments with any Republican except Wexner? ..."
"... Dershowitz, Mitchell, Clinton, Richardson, Dubin, George Stephanopolous, Lawrence Krauss, Katie Couric, Mortimer Zuckerman, Chelsea Handler, Cyrus Vance, and Woody Allen, are all Democrats. Did Epstein ever make use of Republicans? Don't count Trump, who has not been implicated despite the media's best efforts and was probably not even a Republican back in the 90's. Don't count Ken Starr– he's just one of Epstein's lawyers. Don't count scientists who just took money gifts from him. (By the way, Epstein made very little in the way of political contributions , though that little went mostly to Democrats ( $139,000 vs. $18,000 . I bet he extracted more from politicians than he gave to them. ..."
"... What role did Israeli politician Ehud Barak play in all this? ..."
"... Remember Marc Rich? He was a billionaire who fled the country to avoid a possible 300 years prison term, and was pardoned by Bill Clinton in 2001. Ehud Barak, one of Epstein's friends, was one of the people who asked for Rich to be pardoned . Epstein, his killers, and other rich people know that as a last resort they can flee the country and wait for someone like Clinton to come to office and pardon them. ..."
"... "intelligence" is also the kind of excuse people make up so they don't have to say "political pressure." ..."
"... James Patterson and John Connolly published Filthy Rich: A Powerful Billionaire, the Sex Scandal that Undid Him , and All the Justice that Money Can Buy: The Shocking True Story of Jeffrey Epstein . Conchita Sarnoff published TrafficKing: The Jeffrey Epstein Case. I never heard of these before 2019. Did the media bury them? ..."
"... There seems to have been an orchestrated attempt to divert attention to the issue of suicides in prison. Subtle differences in phrasing might help reveal who's been paid off. National Review had an article, "The Conspiracy Theories about Jeffrey Epstein's Death Don't Make Much Sense." The article contains no evidence or argument to support the headline's assertion, just bluster about "madness" and "conspiracy theories". Who else publishes stuff like this? ..."
"... The New York Times was, to its credit, willing to embarrass other publications by 2019. But the Times itself had been part of the cover-up in previous years . Who else was? ..."
"... Not one question involving Maurene Comey, then? She was one of the SDNY prosecutors assigned to this case, and her name has been significantly played down (if at all visible) in the reportage before or after Epstein's death. That she just "happened" to be on this case at all is quite an eyebrow raiser especially with her father under the ongoing "Spygate" investigation ..."
"... As important as it is to go on asking questions about the life and death of Jeffrey Epstein, I have to admit that personally I'm just not interested. I've always found people of his social class to be vaguely repulsive even without the sordid sex allegations. Just their demanding personalities, just the thought of them hanging around in their terrycloth jogging suits, sneering at the world with their irrefrangible arrogance, is enough to make me shudder. I want nothing of their nightmare world; and when they die, I couldn't care less. ..."
"... We are supposed to have faith in this rubbish? The cameras malfunctioned. He didn't have a cellmate. The guards were tired and forced to work overtime. ..."
"... One tiny mention of Jewish magnate Les Wexner but no mention how he & the Bronfmans founded the 'Mega Group' of ultra-Zionist billionaires regularly meeting as to how they could prop up the Jewish state by any & all means, Wexner being the source of many Epstein millions, the original buyer of the NYC mansion he transferred to Epstein etc the excellent Epstein series by Whitney Webb on Mint Press covering all this https://www.mintpressnews.com/author/whitney-webb/ ..."
"... ex-OSS father Donald Barr had written a 'fantasy novel' on sex slavery with scenes of rape of underage teens, 'Space Relations', written whilst Don Barr was headmaster of the Dalton school, which gave Epstein his first job, teaching teens ..."
The Jeffrey Epstein case is notable for the ups and downs in media coverage it's gotten over the years. Everybody, it seems, in
New York society knew by 2000 that Jeffrey Epstein and Ghislaine Maxwell were corrupting teenage girls, but the press wouldn't cover
it. Articles by New York in 2002 and
Vanity Fair in 2003 alluded to it gently,
while probing Epstein's finances more closely. In 2005, the Palm Beach police investigated. The county prosecutor, Democrat Barry
Krischer, wouldn't prosecute for more than prostitution, so they went to the federal prosecutor, Republican Alexander Acosta, and
got the FBI involved. Acosta's office prepared an indictment, but before it was filed, he made a deal: Epstein agreed to plead guilty
to a state law felony and receive a prison term of 18 months. In exchange, the federal interstate sex trafficking charges would not
be prosecuted by Acosta's office. Epstein was officially at the county jail for 13 months, where the county officials under Democratic
Sheriff Ric Bradshaw gave him scandalously
easy treatment , letting him spend his days outside, and letting him serve a year of probation in place of the last 5 months
of his sentence. Acosta's office complained, but it was a county jail, not a federal jail, so he was powerless.
Epstein was released, and various lawsuits were filed against him and settled out of court, presumably in exchange for silence.
The media was quiet or complimentary as Epstein worked his way back into high society. Two books were written about the affair, and
fell flat. The FBI became interested again around 2011 (
a little known fact
) and maybe things were happening behind the scenes, but the next big event was in 2018 when the Miami Herald published a
series of investigative articles rehashing what had happened.
In 2019 federal prosecutors indicted Epstein, he was put in jail, and
he mysteriously died. Now, after much complaining in the press about how awful jails are and how many people commit suicide, things
are quiet again, at least until the Justice Department and
the State of Florida finish their
investigation a few years from now. (For details and more links, see " Investigation: Jeffrey Epstein
"at Medium.com and " Jeffrey Epstein " at Wikipedia
.)
I'm an expert in the field of "game theory", strategic thinking. What would I do if I were Epstein? I'd try to get the President,
the Attorney-General, or the U.S. Attorney for the Southern District of New York to shut down the investigation before it went public.
I'd have all my friends and all my money try to pressure them. If it failed and I were arrested, it would be time for the backup
plan -- the Deal. I'd try to minimize my prison time, and, just as important, to be put in one of the nicer federal prisons where
I could associate with financial wizards and drug lords instead of serial killers, black nationalists, and people with bad breath.
That's what Epstein would do. What about the powerful people Epstein would turn in to get his deal? They aren't as smart as Epstein,
but they would know the Deal was coming -- that Epstein would be quite happy to sacrifice them in exchange for a prison with a slightly
better golf course. What could they do? There's only one good option -- to kill Epstein, and do it quickly, before he could start
giving information samples to the U. S. Attorney.
Trying to kill informers is absolutely routine in the mafia, or indeed, for gangs of any kind. The reason people call such talk
"conspiracy theories" when it comes to Epstein is that his friends are WASPs and Jews, not Italians and Mexicans. But WASPs and Jews
are human too. They want to protect themselves. Famous politicians, unlike gangsters, don't have full-time professional hit men on
their staffs, but that's just common sense -- politicians rarely need hit men, so it makes more sense to hire them on a piecework
basis than as full-time employees. How would they find hit men? You or I wouldn't know how to start, but it would be easy for them.
Rich powerful people have bodyguards. Bodyguards are for defense, but the guys who do defense know guys who do offense. And Epstein's
friends are professional networkers.
One reporter said
of Ghislaine Maxwell, "Her Rolodex would blow away almost anyone else's I can think of -- probably even Rupert Murdoch's." They know
people who know people. Maybe I'm six degrees of separation from a mafia hit man, but not Ghislaine Maxwell. I bet she knows at least
one mafioso personally who knows more than one hit man.
In light of this, it would be very surprising if someone with a spare $50 million to spend to solve the Epstein problem didn't
give it a try. A lot of people can be bribed for $50 million. Thus, we should have expected to see bribery attempts. If none were
detected, it must have been because prison workers are not reporting they'd been approached.
Some
people say that government incompetence is always a better explanation than government malfeasance. That's obviously wrong --
when an undeserving business gets a contract, it's not always because the government official in charge was just not paying attention.
I can well believe that prisons often take prisoners off of suicide watch too soon, have guards who go to sleep and falsify records,
remove cellmates from prisoners at risk of suicide or murder, let the TV cameras watching their most important prisoners go on the
blink, and so forth. But that cuts both ways.
Remember, in the case of Epstein, we'd expect a murder attempt whether the warden of
the most important federal jail in the country is competent or not. If the warden is incompetent, we should expect that murder attempt
to succeed. Murder becomes all the more more plausible. Instead of spending $50 million to bribe 20 guards and the warden, you just
pay some thug $30,000 to walk in past the snoring guards, open the cell door, and strangle the sleeping prisoner, no fancy James
Bond necessary. Or, if you can hire a New York Times reporter for $30,000 (
as Epstein famously did a couple of years ago), you can spend $200,000 on a competent hit man to make double sure. Government
incompetence does not lend support to the suicide theory; quite the opposite.
Now to my questions.
Why is nobody blaming the Florida and New York state prosecutors for not prosecuting Epstein and others for statutory rape?
Statutory rape is not a federal crime, so it is not something the Justice Dept. is supposed to investigate or prosecute. They
are going after things like interstate sex trafficking. Interstate sex trafficking is generally much harder to prove than statutory
rape, which is very easy if the victims will testify.
At any time from 2008 to the present, Florida and New York prosecutors could have gone after Epstein and easily convicted him.
The federal nonprosecution agreement did not bind them. And, of course, it is not just Epstein who should have been prosecuted. Other
culprits such as Prince Andrew are still at large.
Note that if even if the evidence is just the girl's word against Ghislaine Maxwell's or Prince Andrew's, it's still quite possible
to get a jury to convict. After all, who would you believe, in a choice between Maxwell, Andrew, and Anyone Else in the World? For
an example of what can be done if the government is eager to convict, instead of eager to protect important people, see
the 2019 Cardinal
Pell case in Australia. He was convicted by the secret testimony of a former choirboy, the only complainant, who claimed Pell
had committed indecent acts during a chance encounter after Mass before Pell had even unrobed. Naturally, the only cardinal to be
convicted of anything in the Catholic Church scandals is also the one who's done the most to fight corruption. Where there's a will,
there's a way to prosecute. It's even easier to convict someone if he's actually guilty.
Why isn't anybody but Ann Coulter talking about Barry Krischer and Ric Bradshaw, the Florida state prosecutor and sheriff who went
easy on Epstein, or the New York City police who let him violate the sex offender regulations?
Krischer refused to use the evidence the Palm Beach police gave him except to file a no-jail-time prostitution charge (they eventually
went to Acosta, the federal prosecutor, instead, who got a guilty plea with an 18-month sentence). Bradshaw let him spend his days
at home instead of at jail.
In New York State, the county prosecutor, Cyrus Vance, fought to prevent Epstein from being classified
as a Level III sex offender. Once he was, the
police didn't enforce the
rule that required him to check in every 90 days.
How easy would it have been to prove in 2016 or 2019 that Epstein and his people were guilty of federal sex trafficking?
Not easy, I should think. It wouldn't be enough to prove that Epstein debauched teenagers. Trafficking is a federal offense, so
it would have to involve commerce across state lines. It also must involve sale and profit, not just personal pleasure.
The 2019 indictment
is weak on this. The "interstate commerce" looks like it's limited to Epstein making phone calls between Florida and New York. This
is why I am not completely skeptical when former U.S. Attorney Acosta says that the 2008 nonprosecution deal was reasonable. He had
strong evidence the Epstein violated Florida state law -- but that wasn't relevant. He had to prove violations of federal law.
Why didn't Epstein ask the Court, or the Justice Dept., for permission to have an unarmed guard share his cell with him?
Epstein had no chance at bail without bribing the judge, but this request would have been reasonable. That he didn't request a
guard is, I think, the strongest evidence that he wanted to die. If he didn't commit suicide himself, he was sure making it easy
for someone else to kill him.
Could Epstein have used the safeguard of leaving a trove of photos with a friend or lawyer to be published if he died an unnatural
death?
Well, think about it -- Epstein's lawyer was Alan Dershowitz. If he left photos with someone like Dershowitz, that someone could
earn a lot more by using the photos for blackmail himself than by dutifully carrying out his perverted customer's instructions. The
evidence is just too valuable, and Epstein was someone whose friends weren't the kind of people he could trust. Probably not even
his brother.
Who is in danger of dying next?
Prison workers from guard to warden should be told that if they took bribes, their lives are now in danger. Prison guards may
not be bright enough to realize this. Anybody who knows anything important about Epstein should be advised to publicize their information
immediately. That is the best way to stay alive.
This is not like a typical case where witnesses get killed so they won't testify.
It's not like with gangsters. Here, the publicity and investigative lead is what is most important, because these are reputable and
rich offenders for whom publicity is a bigger threat than losing in court. They have very good lawyers, and probably aren't guilty
of federal crimes anyway, just state crimes, in corrupt states where they can use clout more effectively. Thus, killing potential
informants before they tell the public is more important than killing informants to prevent their testimony at trial, a much more
leisurely task.
What happened to Epstein's body?
The Justice Dept. had better not have let Epstein's body be cremated. And they'd better give us convincing evidence that it's
his body. If I had $100 million to get out of jail with, acquiring a corpse and bribing a few people to switch fingerprints and DNA
wouldn't be hard. I find it worrying that the government has not released proof that Epstein is dead or a copy of the autopsy.
"Beyond its isolation, the wing is infested with rodents and cockroaches, and inmates often have to navigate standing water
-- as well as urine and fecal matter -- that spills from faulty plumbing, accounts from former inmates and lawyers said. One lawyer
said mice often eat his clients' papers."
" Often have to navigate standing water"? "Mice often eat his clients' papers?" Really? I'm skeptical. What do the
vermin eat -- do inmates leave Snickers bars open in their cells? Has anyone checked on what the prison conditions really like?
Is it just a coincidence that Epstein made a new will two days before he died?
I can answer this one. Yes, it is coincidence, though it's not a coincidence that he rewrote the will shortly after being denied
bail. The will leaves everything to a trust, and it is the trust document (which is confidential), not the will (which is public),
that determines who gets the money. Probably the only thing that Epstein changed in his will was the listing of assets, and he probably
changed that because he'd just updated his list of assets for the bail hearing anyway, so it was a convenient time to update the
will.
Did Epstein's veiled threat against DOJ officials in his bail filing backfire?
Epstein's lawyers wrote in his bail request,
"If the government is correct that the NPA does not, and never did, preclude a prosecution in this district, then the government
will likely have to explain why it purposefully delayed a prosecution of someone like Mr. Epstein, who registered as a sex offender
10 years ago and was certainly no stranger to law enforcement. There is no legitimate explanation for the delay."
I see this as a veiled threat. The threat is that Epstein would subpoena people and documents from the Justice Department relevant
to the question of why there was a ten-year delay before prosecution, to expose the illegitimate explanation for the delay. Somebody
is to blame for that delay, and court-ordered disclosure is a bigger threat than an internal federal investigation.
Who can we trust?
Geoffrey Berman, U.S. Attorney for the Southern District of New York, is the only government official who is clearly trustworthy,
because he could have stopped the 2019 Epstein indictment and he didn't. I don't think Attorney-General Barr could have blocked it,
and I don't think President Trump could have except by firing Berman. I do trust Attorney-General Barr, however, from what I've
heard of him and because he instantly and publicly said he would have not just the FBI but the Justice Dept. Inspector-General investigate
Epstein's death, and he quickly fired the federal prison head honcho. The FBI is untrustworthy, but Inspector-Generals are often
honorable.
Someone else who may be a hero in this is Senator Ben Sasse.
Vicki Ward
writes in the Daily Beast :
"It was that heart-wrenching series that caught the attention of Congress. Ben Sasse, the Republican senator from Nebraska,
joined with his Democratic colleagues and demanded to know how justice had been so miscarried.
Given the political sentiment, it's unsurprising that the FBI should feel newly emboldened to investigate Epstein -- basing
some of their work on Brown's excellent reporting."
Will President Trump Cover Up Epstein's Death in Exchange for Political Leverage?
President Trump didn't have anything personally to fear from Epstein. He is too canny to have gotten involved with him, and the
press has been eagerly at work to find the slightest connection between him and Epstein and have come up dry as far as anything but
acquaintanceship. But we must worry about a cover-up anyway, because rich and important people would be willing to pay Trump a lot
in money or, more likely, in political support, if he does a cover-up.
Why did Judge Sweet order Epstein documents sealed in 2017. Did he die naturally in 2019?
Judge Robert Sweet in 2017 ordered all documents in an Epstein-related case sealed. He died in May 2019 at age 96, at home in
Idaho. The sealing was completely illegal, as the appeals court politely but devastatingly noted in 2019, and the documents were
released a day or two before Epstein died. Someone should check into Judge Sweet's finance and death. He was an ultra-Establishment
figure -- a Yale man, alas, like me, and Taft School -- so he might just have been protecting what he considered good people, but
his decision to seal the court records was grossly improper.
Did Epstein have any dealings in sex, favors, or investments with any Republican except Wexner?
Dershowitz, Mitchell, Clinton, Richardson, Dubin, George Stephanopolous, Lawrence Krauss, Katie Couric, Mortimer Zuckerman,
Chelsea Handler, Cyrus Vance, and Woody Allen, are all Democrats. Did Epstein ever make use of Republicans? Don't count Trump, who
has not been implicated despite the media's best efforts and was probably not even a Republican back in the 90's. Don't count Ken
Starr– he's just one of Epstein's lawyers. Don't count scientists who just took money gifts from him. (By the way, Epstein made very
little in the way of
political contributions
, though that little went mostly to Democrats (
$139,000 vs. $18,000
. I bet he extracted more from politicians than he gave to them.
What role did Israeli politician Ehud Barak play in all this?
Remember Marc Rich? He was a billionaire who fled the country to avoid a possible 300 years prison term, and was pardoned
by Bill Clinton in 2001. Ehud Barak, one of Epstein's friends, was one of the people
who asked for Rich to be pardoned
. Epstein, his killers, and other rich people know that as a last resort they can flee the country and wait for someone like Clinton
to come to office and pardon them.
Acosta said that Washington Bush Administration people told him to go easy on Epstein because he was an intelligence source. That
is plausible. Epstein had info and blackmailing ability with people like Ehud Barak, leader of Israel's Labor Party. But "intelligence"
is also the kind of excuse people make up so they don't have to say "political pressure."
Why did nobody pay attention to the two 2016 books on Epstein?
James Patterson and John Connolly published Filthy Rich: A Powerful Billionaire, the Sex Scandal that Undid Him ,
and All the Justice that Money Can Buy: The Shocking True Story of Jeffrey Epstein . Conchita Sarnoff published TrafficKing:
The Jeffrey Epstein Case. I never heard of these before 2019. Did the media bury them?
Which newspapers reported Epstein's death as "suicide" and which as "apparent suicide"?
More generally, which media outlets seem to be trying to brush Epstein's death under the rug? There seems to have been an
orchestrated attempt to divert attention to the issue of suicides in prison. Subtle differences in phrasing might help reveal who's
been paid off. National Review had an article,
"The Conspiracy
Theories about Jeffrey Epstein's Death Don't Make Much Sense." The article contains no evidence or argument to support the headline's
assertion, just bluster about "madness" and "conspiracy theories". Who else publishes stuff like this?
How much did Epstein corrupt the media from 2008 to 2019?
Even outlets that generally publish good articles must be suspected of corruption. Epstein made an effort to get good publicity.
The New York Times
wrote,
"The effort led to the publication of articles describing him as a selfless and forward-thinking philanthropist with an interest
in science on websites like Forbes, National Review and HuffPost .
All three articles have been removed from their sites in recent days, after inquiries from TheNew York Times .
The National Review piece, from the same year, called him "a smart businessman" with a "passion for cutting-edge science."
Ms. Galbraith was also a publicist for Mr. Epstein, according to several news releases promoting Mr. Epstein's foundations In
the article that appeared on the National Review site, she described him as having "given thoughtfully to countless organizations
that help educate underprivileged children."
"We took down the piece, and regret publishing it," Rich Lowry, the editor of National Review since 1997, said in an email.
He added that the publication had "had a process in place for a while now to weed out such commercially self-interested pieces from
lobbyists and PR flacks.""
Eric Rasmusen is an economist who has held an endowed chair at Indiana University's Kelley School of Business and visiting
positions at Harvard Law School, Yale Law School, the Harvard Economics Department, Chicago's Booth School of Business, Nuffield
College/Oxford, and the University of Tokyo Economics Department. He is best known for his book Games and Information. He has published
extensively in law and economics, including recent articles on the burakumin outcastes in Japan, the use of game theory in jurisprudence,
and quasi-concave functions. The views expressed here are his personal views and are not intended to represent the views of the Kelley
School of Business or Indiana University. His vitae is at http://www.rasmusen.org/vita.htm
.
Not one question involving Maurene Comey, then? She was one of the SDNY prosecutors assigned to this case, and her name has
been significantly played down (if at all visible) in the reportage before or after Epstein's death. That she just "happened"
to be on this case at all is quite an eyebrow raiser especially with her father under the ongoing "Spygate" investigation
Apparently, there will always be many players on the field, and many ways to do damage control.
So the problem was finding a motivated prosecutor in case of Jewish predator with very likely links to intelligence services
of several countries. The motivation was obviously lacking.
Your "expertise" in game theory would be greatly improved if you let yourself consider the Jewish factor.
As important as it is to go on asking questions about the life and death of Jeffrey Epstein, I have to admit that personally
I'm just not interested. I've always found people of his social class to be vaguely repulsive even without the sordid sex allegations.
Just their demanding personalities, just the thought of them hanging around in their terrycloth jogging suits, sneering at the
world with their irrefrangible arrogance, is enough to make me shudder. I want nothing of their nightmare world; and when they
die, I couldn't care less.
More generally, which media outlets seem to be trying to brush Epstein's death under the rug?
Not the National Enquirer:
Jeffrey Epstein Murder Cover-up Exposed!
Death Scene Staged to Look Like Suicide
Billionaire's Screams Ignored by Guards!
Fatal Attack Caught on Jail Cameras!
Autopsy is Hiding the Truth!
I don't hold AG Barr in the high regard this piece does. While I'm not suggesting he had anything to do with Epstein's
death I do think he's corrupt. I doubt he will do anything that leads to the truth. As for him relieving the warden of
his duties, I would hope that was to be expected, wasn't it? I mean he only had two attempts on Epstein's life with the second
being a success. Apparently the first didn't jolt the warden into some kind of action as it appears he was guilty of a number
of sins including 'Sloth.'
As for the publications that don't like conspiracy theories –like the National Review
-- they are a hoot. We are supposed to have faith in this rubbish? The cameras malfunctioned. He didn't have a cellmate. The
guards were tired and forced to work overtime. There was no camera specifically in the cell with Epstein.
In the end I think Epstein probably was allowed to kill himself but I'm not confident in that scenario at all. And yes the media
should pressure Barr to hav e a look in the cell and see exactly how a suicide attempt might have succeeded or if it was a long-shot
at best, given the materiel and conditions.
19. Why is the non-prosecution agreement ambiguous ("globally" binding), when it was written by the best lawyers in the country
for a very wealthy client? Was the ambiguity bargained-for? If so, what are the implications?
20. With "globally" still being unresolved (to the bail judge's first-paragraph astonishment), why commit suicide now?
21. The "it was malfeasance" components are specified. For mere malfeasance to have been the cause, all of the components would
have to be true; it would be a multiplicative function of the several components. Is no one sufficiently quantitative to estimate
the magnitude?
22. What is the best single takeaway phrase that emerges from all of this? My nomination is: "In your face." The brazen, shameless,
unprecedented, turning-point, in-your-faceness of it.
ER the answer is easy to you list of questions .. there is no law in the world when violations are not prosecuted and fair open
for all to see trials are not held and judges do not deliver the appropriate penalties upon convictions. .. in cases involving
the CIA prosecution it is unheard of that a open for all to see trial takes place.
This is why we the governed masses need a parallel government..
such an oversight government would allow to pick out the negligent or wilful misconduct of persons in functional government
and prosecute such persons in the independent people's court.. Without a second government to oversee the first government there
is no democracy; democracy cannot stand and the governed masses will never see the light of a fair day .. unless the masses have
oversight authority on what is to be made into law, and are given without prejudice to their standing in America the right to
charge those associated to government with negligent or wilful misconduct.
There are big questions this article is not asking either
The words 'Mossad' seems not to appear above, and just a brief mention of 'Israel' with Ehud Barak
One tiny mention of Jewish magnate Les Wexner but no mention how he & the Bronfmans founded the 'Mega Group' of ultra-Zionist
billionaires regularly meeting as to how they could prop up the Jewish state by any & all means, Wexner being the source of many
Epstein millions, the original buyer of the NYC mansion he transferred to Epstein etc the excellent Epstein series by Whitney
Webb on Mint Press covering all this https://www.mintpressnews.com/author/whitney-webb/
Was escape to freedom & Israe,l the ultimate payoff for Epstein's decades of work for Mossad, grooming and abusing young teens,
filmed in flagrante delicto with prominent people for political blackmail?
Is it not likely this was a Mossad jailbreak covered by fake 'suicide', with Epstein alive now, with US gov now also in possession
of the assumed Epstein sexual blackmail video tapes?
We have the Epstein 'death in jail' under the US Attorney General Bill Barr, a former CIA officer 1973-77, the CIA supporting
him thru night law school, Bill Barr's later law firm Kirkland Ellis representing Epstein
Whose Jewish-born ex-OSS father Donald Barr had written a 'fantasy novel' on sex slavery with scenes of rape of underage
teens, 'Space Relations', written whilst Don Barr was headmaster of the Dalton school, which gave Epstein his first job, teaching
teens
So would a crypto-Jewish 'former' CIA officer who is now USA Attorney General, possibly help a Mossad political blackmailer
escape to Israel after a fake 'jail suicide'?
An intriguing 4chan post a few hours after Epstein's 'body was discovered', says Epstein was put in a wheelchair and driven
out of the jail in a van, accompanied by a man in a green military uniform – timestamp is USA Pacific on the screencap apparently,
so about 10:44 NYC time Sat.10 Aug
FWIW, drone video of Epstein's Little St James island from Friday 30 August, shows a man who could be Epstein himself, on the
left by one vehicle, talking to a black man sitting on a quad all-terrain unit
Close up of Epstein-like man between vehicles, from video note 'pale finger' match-up to archive photo Epstein
The thing that sticks out for me is that Epstein was caught, charged, and went to jail previously, but he didn't die .
The second time, it appears he was murdered. I strongly suspect that the person who murdered Epstein was someone who only met
Epstein after 2008, or was someone Epstein only procured for after 2008. Otherwise, this person would have killed Epstein
back when Epstein was charged by the cops the first time.
Either that, or the killer is someone who is an opponent of Trump, and this person was genuinely terrified that Trump would
pressure the Feds to avoid any deals and to squeeze all the important names out of Epstein and prosecute them, too.
The author professes himself "expert in the field of "game theory", strategic thinking," but he doesn't say how his 18 questions
were arrived at to the exclusion of hundreds of others. Instead, the column includes several casual assumptions and speculation.
For example:
"Probably the only thing that Epstein changed in his will was the listing of assets, and he probably changed that because
he'd just updated his list of assets for the bail hearing anyway, so it was a convenient time to update the will."
"President Trump didn't have anything personally to fear from Epstein."
"I do trust Attorney-General Barr, however, from what I've heard of him and because he instantly and publicly said he would
have not just the FBI but the Justice Dept. Inspector-General investigate Epstein's death, and he quickly fired the federal
prison head honcho. The FBI is untrustworthy, but Inspector-Generals are often honorable."
As to this last, isn't "quickly [firing] the federal prison head honcho" consistent with a failure-to-prevent-suicide deflection
strategy? And has Mr. Rasmusen not "heard" of the hiring of Mr. Epstein by Mr. Barr's father? Or of the father's own Establishment
background?
I hope to be wrong, but my own hunch is that these investigations, like the parallel investigations of the RussiaGate hoax,
will leave the elite unscathed. I also hope that in the meantime we see more rigorous columns here than this one.
...Also, subsequently, it should have been a top priority to arrest Ghislaine Maxwell but the government, justice and media
lack interest . Apparently, they don't know where she is, and they're not making any special efforts to find out.
I'm not
sure the end of homogeneity was the driver of diminished respect for what was once called
character. In the US, I hazard that a bigger factor was the widespread acceptance of
libertarian/neoliberal values. As we've documented, that world view was marketed aggressively
and very successfully by a loosely coordinated but well funded right wing campaign, whose
seminal document was the Powell Memo of 1971 which laid out the vision and many of the tactics
for their war on the New Deal and the community values that supported it. For instance, it
would have been well-nigh impossible for a Mike Milken, who'd gone to prison for securities law
violations (and was widely believed to have engaged in considerably more questionable conduct)
to have rehabilitated himself to the degree he did.
From Amar:
John McArthur, in memoriam
He was one of a kind -- and his kindness and empathy (a much used word I know) was
unbounded. It touched all from dining and custodial staff to taxi drivers. My parents apart,
few other people have had such an influence on me. (And he did me the honor of reading
everything I read: every book every article, every draft, the pages a sea of yellow
highlight)
He was also astute, ruthless and got things done. His mind was extraordinary and his
reading voracious and eclectic -- although you would never guess it from his aw shucks manner
and country bumpkin style.
I first actually talked to him in my second year as assistant professor. We had a long
long lunch at his corner table in the faculty club. We talked about everything -- except why
we were having lunch. At the end he said, "Perhaps you'd like to know why i asked you to
lunch. Well I've been reading your stuff and I wanted to put a face to the writing, to know
who this person was who was writing this stuff."
A few days later a copy of Knight's Risk Uncertainty and Profit arrived in interoffice
mail with one of John's classic handwritten notes, which went something along the following
lines. "I think this will suit the way you think of the world."
I had never encountered the book in my doctoral studies, and it was revelatory.
We had lunches, lasting 2-3 hours nearly every year for the last 20 years after I left
HBS. Always at the Charles ("If we ate at HBS there would be someone stopping by every
minute" he said. At the Charles it was only every 10 minutes. And of course he knew every
single waiter and waitress by name).
The stories he told at the lunches.. Such a pity he did not put his wisdom into a memoir.
But that was not his way.
The benefits of a "classical" education.
One of the main supports of the 'civilized' social interactions that you observe here 'Down
South' is a stubborn refusal to put a price on everything. It is not universal, but it
lingers in pockets of calm salted among the storms of modern living.
Welcome to the South.
I have some neighbors who are the opposite of me politically (in fact most of my
neighbors) but are wonderfully nice people on a personal level. Some of us who grew up here
have had the opposite experience of Yves and lived for awhile in the North where all that
politeness is dismissed as a false front.
Which in many cases it is, but the usefulness of all that unthinking social glue should
not be dismissed out of hand. After decades of elites in thrall to Ayn Rand the country may
be in need a few of those social norms that beatnik rebels in the 1950s found so stultifying.
Perhaps the most amazing thing about Epstein was how all those rich people around him thought
that his three teenager a day habit was perfectly acceptable.
I don't know anything about anything, but after living in the Northeast for my whole life
I spent 10 years in North Carolina. After a decade, I realized that I was never going
to stop being a Yankee, and that I detested "Southern courtesy" which mostly involved people
telling me to "Have a Blessed Day!"
I take part of this back: My favorite item of Southern Courtesy is that you can slander
anyone as long as you end the sentence with " bless his heart!"
Seriously, it's a different culture, and not one that I was ever comfortable with.
Employee rights advocates say this Labor Day's family barbecues and union solidarity picnics
will take place in the shadow of a Trump administration that has quietly stacked the National
Labor Relations Board with anti-labor members. The federal agency is far less well-known than
the IRS or EPA, but its five presidential appointees issue rulings with often far-reaching
consequences for America's working men and women. The NLRB was created in 1935 to oversee
collective bargaining and protect labor standards; the majority of its current board have
worked for years with pro-employer firms or
on behalf of industry.
Under the Trump administration, says Henry Willis , a veteran employment rights attorney at
Schwartz, Steinsapir, Dohrmann & Sommers, "They are rolling back rights as fast as they
can."
Even before Trump was elected president, labor advocates had long lamented an NLRB process
weighted towards employers who have the power of the paycheck and an array of tactics to shut
down union organizing drives. A 2009 study , published by the liberal
Economic Policy Institute think tank, found that during 57 percent of union election processes,
employers threatened to shut down their workplaces; and during 34 percent of those organizing
drives, employers fired workers and used one-on-one meetings with employees to threaten
them.
Study author Kate Bronfenbrenner, director of labor education research and a senior lecturer
at Cornell University's School of Industrial and Labor Relations, says those numbers have
remained steady since 2009.
Moreover, Bronfenbrenner adds, when an administration changes it's not uncommon for boards
to reverse some preceding labor decisions, but that "there's a different tone to this board in
that it is reversing long-held law. Not just changing rules but reversing decisions that had
been agreed upon for a long time."
In other words, the NLRB under Trump represents a tectonic shift in the way the agency has
traditionally operated.
Bronfenbrenner cites a recent decision that allows employers to
stop bargaining and call for a new union election each time a contract approaches
expiration -- in effect, inviting company employees to decertify their union. "[Employers] can
just say, 'I no longer believe the union has support, and then there will be an election," she
says. "Employers can do that every single time a contract expires."
Willis, who litigates on the front lines, ticks off a list illustrating a piece-by-piece
dismantling of employee rights.
"The current board has been attacking Obama board decisions on issues such as [establishing]
who's an independent contractor and who's an employee," he says, referring to a
January 2019 revision of the standard used to determine whether independent contractors are
covered by the National Labor Relations Act, which, the NLRB proclaims on its
website , was passed by Congress in 1935 "to protect the rights of employees and employers,
to encourage collective bargaining, and to curtail certain private sector labor and management
practices, and which can harm the general welfare of workers, businesses and the U.S.
economy."
The January decision makes it less likely that the contractors will be given the same rights
as employees.
"That's a big issue," Willis says. "Especially with the gig economy."
Another 2017 NLRB decision upended the
definition of bargaining units . An employer no longer has to recognize or bargain with
smaller units within a single work location, forcing a union to do large-scale organizing.
Organizing a shoe department, Willis notes, is less daunting than organizing an entire
department store.
The Obama NLRB strove to proactively extend protections to unorganized shops -- where
workers are less likely to know their rights. "The Trump board is taking a reactionary approach
-- pulling back wherever possible," Willis says.
* * *
Currently operating with a vacant seat , the five-member board consists of three Republicans
and Obama appointee Lauren McFerran, and it's set to term out in December. Conservative
interests have urged President Trump to wait until McFerran leaves and then to fill the two
empty seats to lock in a unanimous pro-employer majority.
Also in the works is a restructuring of the NLRB that would centralize decision-making in
Washington and bring decisions now investigated and adjudicated at the regional level under
scrutiny there.
Trump general counsel appointee Peter Robb issued a 2017 memo directing NLRB regional
offices to submit to his Division of Advice for review cases
involving "significant legal issues
.
" In
2018
Robb
announced an intention to reorganize the agency's 26 regional offices into a smaller number
of districts that report directly to Robb -- who could then present the issues to the NLRB in a
way to give cover to the board to reverse local decisions and create precedent.
"The current general counsel has been trying to shift decision-making power from the regions
to D.C. and creating a new layer of administration to give him more control over how the
regions handle unfair labor practice charges," says Willis. "It hasn't been carried out, but
the general counsel certainly has a big foot and brings it down much more frequently these
days."
It's not all bleak news for labor, however. Unions are now organizing and representing
contract workers, including hundreds of thousands of janitors, whether or not the NLRB
designates them as employees, says Bronfenbrenner.
She sees the most vibrant aspects today's labor movement in industries where the majority
are women and men and women of color -- and notes that those constituencies were largely
shunned by organized labor when it was at the height of its strength.
"Organized labor only started getting a move on when their density had gone down below down
to 12 percent and that's a little late. If they had done it when their density was 50 percent
or 45 percent, they could have used their bargaining power."
The motivator is " Gap
Psychology ," the human desire to distance oneself from those below (on any scale), and
to come nearer to those above.
The rich are rich because the Gap below them is wide, and the wider the Gap, the richer
they are .
And here is the important point: There are two ways the rich widen the Gap: Either gain
more for themselves or make sure those below have less.
That is why the rich promulgate the Big Lie that the federal government (and its agencies,
Social Security and Medicare) is running short of dollars. The rich want to make sure that
those below them don't gain more, as that would narrow the Gap.
Negative sum game, where one wins but the other has to lose more so the party of the first
part feels even better about winning. There is an element of sadism, sociopathy and a few
other behaviors that the current systems allow to be gamed even more profitably. If you build
it, or lobby to have it built, they will come multiple times.
Shibboleths falling left and right ... how soon before some 'free' trade fundamentalists like
Krugman finally come around to acknowledging that it was all laissez-faire rebranded as
'free' trade? It was all about cheap labor, property rights, profits, and avoiding taxes and
paying for externalities ... pure laissez-faire... stuff that Krugman and his ilk refuse to
address or rectify in their corporatist columns lauding 'free' trade.
Exactly, problem is that many Democrats remain totally loyal even though the party switched
directions 30 years ago and these gullible folks have yet to figure out that the New
Democrats incorporated the policies of Bush 41 Republicans while trying to maintain a fake
veneer of FDR.
"In the early 1950s, a young economist named Paul Volcker worked as a human calculator in
an office deep inside the Federal Reserve Bank of New York. He crunched numbers for the
people who made decisions, and he told his wife that he saw little chance of ever moving up.
The central bank's leadership included bankers, lawyers and an Iowa hog farmer, but not a
single economist. The Fed's chairman, a former stockbroker named William McChesney Martin,
once told a visitor that he kept a small staff of economists in the basement of the Fed's
Washington headquarters. They were in the building, he said, because they asked good
questions. They were in the basement because ''they don't know their own limitations.''
Martin's distaste for economists was widely shared among the midcentury American elite.
President Franklin Delano Roosevelt dismissed John Maynard Keynes, the most important
economist of his generation, as an impractical ''mathematician.'' President Eisenhower, in
his farewell address, urged Americans to keep technocrats from power. Congress rarely
consulted economists; regulatory agencies were led and staffed by lawyers; courts wrote off
economic evidence as irrelevant.
But a revolution was coming. As the quarter century of growth that followed World War II
sputtered to a close, economists moved into the halls of power, instructing policymakers that
growth could be revived by minimizing government's role in managing the economy. They also
warned that a society that sought to limit inequality would pay a price in the form of less
growth. In the words of a British acolyte of this new economics, the world needed ''more
millionaires and more bankrupts.''
In the four decades between 1969 and 2008, economists played a leading role in slashing
taxation of the wealthy and in curbing public investment. They supervised the deregulation of
major sectors, including transportation and communications. They lionized big business,
defending the concentration of corporate power, even as they demonized trade unions and
opposed worker protections like minimum wage laws. Economists even persuaded policymakers to
assign a dollar value to human life -- around $10 million in 2019 -- to assess whether
regulations were worthwhile.
The revolution, like so many revolutions, went too far. Growth slowed and inequality
soared, with devastating consequences. Perhaps the starkest measure of the failure of our
economic policies is that the average American's life expectancy is in decline, as
inequalities of wealth have become inequalities of health. Life expectancy rose for the
wealthiest 20 percent of Americans between 1980 and 2010. Over the same three decades, life
expectancy declined for the poorest 20 percent of Americans. Shockingly, the difference in
average life expectancy between poor and wealthy women widened from 3.9 years to 13.6
years.
Rising inequality also is straining the health of liberal democracy. The idea of ''we the
people'' is fading because, in this era of yawning inequality, there is less we share in
common. As a result, it is harder to build support for the kinds of policies necessary to
deliver broad-based prosperity in the long term, like public investment in education and
infrastructure.
Economists began to enter public service in large numbers in the middle of the 20th century,
as policymakers struggled to manage the rapid expansion of the federal government. The number
of economists employed by the government rose from about 2,000 in the mid-1950s to more than
6,000 by the late 1970s. At first they were hired to rationalize the administration of
policy, but they soon began to shape the goals of policy, too. Arthur F. Burns became the
first economist to lead the Fed in 1970. Two years later, George Shultz became the first
economist to serve as Treasury secretary. In 1978, Volcker completed his rise from the Fed's
bowels, becoming the central bank's chairman.
The most important figure, however, was Milton Friedman, an elfin libertarian who refused to
take a job in Washington, but whose writings and exhortations seized the imagination of
policymakers. Friedman offered an appealingly simple answer for the nation's problems:
Government should get out of the way. He joked that if bureaucrats gained control of the
Sahara, there would soon be a shortage of sand.
He won his first big victory in an unlikely battle, helping to persuade President Nixon to
end military conscription in 1973. Friedman and other economists showed that a military
comprised solely of volunteers, recruited by offering market-rate wages, was financially
viable as well as politically preferable. The Nixon administration also embraced Friedman's
proposal to let markets determine the exchange rates between the dollar and foreign
currencies, and it was the first to put a price tag on human life to justify limits on
regulation.
But the turn toward markets was a bipartisan affair. The reduction of federal income taxation
began under President Kennedy. President Carter initiated an era of deregulation in 1977 by
naming an economist, Alfred Kahn, to dismantle the bureaucracy that supervised commercial
aviation. President Clinton restrained federal spending in the 1990s as the economy boomed,
declaring that ''the era of big government is over.''
Liberal and conservative economists conducted running battles on key questions of public
policy, but their areas of agreement ultimately were more important. Although nature tends
toward entropy, they shared a confidence that markets tend toward equilibrium. They agreed
that the primary goal of economic policy was to increase the dollar value of the nation's
output. And they had little patience for efforts to limit inequality. Charles L. Schultze,
the chairman of Mr. Carter's Council of Economic Advisers, said in the early 1980s that
economists should fight for efficient policies ''even when the result is significant income
losses for particular groups -- which it almost always is.'' A generation later, in 2004, the
Nobel laureate Robert Lucas warned against any revival of efforts to reduce inequality. ''Of
the tendencies that are harmful to sound economics, the most seductive, and in my opinion the
most poisonous, is to focus on questions of distribution.''
Accounts of the rise of inequality often take a fatalistic view. The problem is described
as a natural consequence of capitalism, or it is blamed on forces, like globalization or
technological change, that are beyond the direct control of policymakers. But much of the
fault lies in ourselves, in our collective decision to embrace policies that prioritized
efficiency and encouraged the concentration of wealth, and to neglect policies that equalized
opportunity and distributed rewards. The rise of economics is a primary reason for the rise
of inequality.
And the fact that we caused the problem means the solution is in our power, too.
Markets are constructed by people, for purposes chosen by people -- and people can change
the rules. It's time to discard the judgment of economists that society should turn a blind
eye to inequality. Reducing inequality should be a primary goal of public policy.
The market economy remains one of humankind's most awesome inventions, a powerful machine
for the creation of wealth. But the measure of a society is the quality of life throughout
the pyramid, not just at the top, and a growing body of research shows that those born at the
bottom today have less chance than in earlier generations to achieve prosperity or to
contribute to society's general welfare -- even if they are rich by historical standards.
This is not just bad for those who suffer, although surely that is bad enough. It is bad
for affluent Americans, too. When wealth is concentrated in the hands of the few, studies
show, total consumption declines and investment lags. Corporations and wealthy households
increasingly resemble Scrooge McDuck, sitting on piles of money they can't use
productively.
Willful indifference to the distribution of prosperity over the last half century is an
important reason the very survival of liberal democracy is now being tested by nationalist
demagogues. I have no special insight into how long the rope can hold, or how much weight it
can bear. But I know our shared bonds will last longer if we can find ways to reduce the
strain."
If we discard political correctness issues, the real problem is that since probably late 60th
most academic economists were and still are elite prostitutes of financial oligarchy.
The level of corruption of academic economists reached really unprecedented levels under
neoliberalism. The level of remuneration (direct but mostly indirect) was raised probably ten
fold.
Because one of the way neoliberals got to power is the infiltration of economic
departments in universities via grants and specially created positions. As well as creating
think tanks staffed with "professional neoliberal revolutionaries" as a proxy of Bolsheviks
Party full time party functionaries.
"... The ideal modern subject is the 'consumer/spectator' who exercises their anti-capitalism by consuming a more ethical brand of product. In which way: capitalism subsumes its anti-capitalist antithesis TINA. If you have a new idealism: you have to market it and so it becomes just another brand of capitalism. It becomes a new consumerism. That's capitalist realism. TINA. ..."
"... That which we are when we turn away – and ultimately turn off – the consumer spectacle. We are not rational self-maximisers seeking maximum market access only for ourselves. Our idolatry of greed will not provide a Kantian *summum bonum* of objective market values of welfare and wellbeing for all. That is a mendacious lie only a utopian 'capitalist realist' could believe. We have to seek the alternative. Now: while we are already crossing the event horizon of yet another crisis of capitalism entering the black hole at the heart of overfinancialisation and debt deflation. We have yet to admit that it is entropy dragging us in. It's gonna have to more than a "beautiful, illuminating, and heart-rending" story. It's gonna have to be real world relevant and credible too. ..."
"... Capitalism does not work as a culturally conditioned psychology; an ecology; or even as an economy. Each time it fails: it is restarted by a massive, never before known, transference of wealth from the poor to rich ..."
"... Only utopian capitalist realists can ever believe that any of this pseudo-wealth will trickle down in any meaningful way. ..."
Ed nails it: everyone gets the Debordian Spectacle angle. I, for one, need no more
convincing of the true nature of capitalism. Which brings me back to Pfaller's meaningless
usage of the term 'Postmodernism'. We had this discussion last week: so I will only re-iterate
this. The blanket use of the term says nothing useful at all. For 'progressive neoliberalism':
I propose Mark Fisher's term – "Capitalist Realism". Mainly because it does supply
valuable conceptual and semantic framing of sense and meaning.
As given most succinctly in the book's (it's an essay really) subtitle and Thatcher's mantra
– TINA (There Is No Alternative). Capitalism has totally colonised culture – in
roughly the same timescale Pfaller is indicating (perhaps a bit earlier) – and shaped
contemporary consciousness by commodifying and consumerising it.
The ideal modern subject is the 'consumer/spectator' who exercises their anti-capitalism
by consuming a more ethical brand of product. In which way: capitalism subsumes its
anti-capitalist antithesis TINA. If you have a new idealism: you have to market it and so it
becomes just another brand of capitalism. It becomes a new consumerism. That's capitalist
realism. TINA.
This double-bind situationism speaks more eloquently to me than the pseudo-label 'PoMo'
– which can mean anything to anyone – and therefore means nothing to everyone.
Which brings me back to the point, as I see it, that Ed is making. We need a new alternative.
Bauman, Pfaller, Zizek, Giddens, etc can argue to the cows come home about when 'high
modernity' became 'postmodernity' or did it just continue as 'liquid modernity' (to which I
would concur) if not that these damn meaningless terms offer little of a counterculture or
liberational praxis. One that defies consumerisation.
I give you us as the answer. That which we are when we turn away – and ultimately turn
off – the consumer spectacle. We are not rational self-maximisers seeking maximum market
access only for ourselves. Our idolatry of greed will not provide a Kantian *summum bonum* of
objective market values of welfare and wellbeing for all. That is a mendacious lie only a
utopian 'capitalist realist' could believe. We have to seek the alternative. Now: while we are
already crossing the event horizon of yet another crisis of capitalism entering the black hole
at the heart of overfinancialisation and debt deflation. We have yet to admit that it is
entropy dragging us in. It's gonna have to more than a "beautiful, illuminating, and
heart-rending" story. It's gonna have to be real world relevant and credible too.
Capitalism does not work as a culturally conditioned psychology; an ecology; or even as an
economy. Each time it fails: it is restarted by a massive, never before known, transference of
wealth from the poor to rich. These are waves and cycles of 'primitive accumulation' and
'accumulation by dispossession'.
Only utopian capitalist realists can ever believe that any of
this pseudo-wealth will trickle down in any meaningful way. How can it ever be meaningful if it
is essentially a meaningless inescapable void of exponential and entropic debt deflation?
Capitalism is the biggest anti-utopian social engineering project in history. One that offers
only a soulless, submissive Void for the consumer/spectator – TINA. That's capitalist
realism.
Nothing else matters other than avoiding this Void of capitalist realist nihilisation of
humanity. Nothing. Jeffrey who?
It's just too bad being elected President doesn't come with a 90-day probationary
period that many employers use, because if they did Mike Pence would be considering a 2nd
Term run right now.........
During election campaign of 2016 many people though that Trump is shrewd real estate
developer who can quickly learn statecraft. He proved to be a primitive emotionally unstably
narcissist, a bully who spoil any negotiation he enters. And has only one tool in his arsenal --
direct threats. Looks like the highest position he is suitable for is a boss of a small NYC
gang.
Notable quotes:
"... Conversely, is the goal to disrupt supply chains and re-domicile them back to the U.S.? If so, then where is his administration's support for R&D, education, and other industrial policies that could enhance national development, thereby making the U.S. a more attractive place to reclaim high valued-added supply chains? ..."
"... In fact, his secretary of education is viscerally hostile to the very concept of publicly funded education (of any kind), as well as being a shill for charter schools and privatized voucher programs (in which her family has vested economic interests ). ..."
"... As Robert Atkinson and Michael Lind argue in a recent American Affairs article, "Trump proudly touts his tax cutting and deregulation prowess, while his budgets slash support for key national investments in building blocks like research and development, manufacturing support programs, infrastructure, and education and training." This comes at a time when America's infrastructure is already one of the worst in the developed world . ..."
"... Furthermore, as recent events have illustrated, there is little Trump can do if and when China devalues its currency to offset the impact of the increased tariff charges he has introduced (or threatened to revive). ..."
"... Berle, Galbraith and others were advocates for local content requirements so as to sustain America's industrial ecosystem. And they favored buffer stocks to reduce global booms and busts. ..."
"... Enough with the "tariff tantrums." Or the silly idea that a modern economy can forfeit manufacturing to its rivals and specialize in finance, entertainment, tourism, and natural resource industries like farming, while making empty pledges about retraining and relocation to help the "losers" of global integration (promises seldom kept). ..."
"... We have a domestic crisis, and must do better than simply retreat to the delusions of neoliberalism or mindless protectionism if the American people are to come out as winners in a viable future trade framework with Beijing and the rest of the world. ..."
"... “There’s class warfare, all right, but it’s my class, the rich class, that’s making war, and we’re winning.” ..."
"... US elites have had their snouts in the trough, and have been so busy gorging themselves they didn’t notice a new superpower rising. ..."
"... “The family which takes its mauve an cerise, air-conditioned, power-steered and power-braked automobile out for a tour passes through cities that are badly paved, made hideous by litter, lighted buildings, billboards and posts for wires that should long since have been put underground. They pass on into countryside that has been rendered largely invisible by commercial art. (The goods which the latter advertise have an absolute priority in our value system. Such aesthetic considerations as a view of the countryside accordingly come second. On such matters we are consistent.) They picnic on exquisitely packaged food from a portable icebox by a polluted stream and go on to spend the night at a park which is a menace to public health and morals. Just before dozing off on an air mattress, beneath a nylon tent, amid the stench of decaying refuse, they may reflect vaguely on the curious unevenness of their blessings. Is this, indeed, the American genius?” ..."
"... Yes. This is one of the better articles written about the absolutely insane and almost suicidal trade policy our elites have pursued and what goals we should pursue. These are key points made: ..."
"... Could be wrong, but when considering the success or failure of the China tariff initiative under some “Grand Strategy” that has been implemented to reorder US relations with China and restore a US manufacturing base, I think it might be useful to move upstream a bit and consider whether it aligns with this administration’s overall “Grand Strategy”. To distill it down to its essence, it’s “Move Fast and Break Things”. ..."
"... Trump is a shameless opportunist with a standard set of tactics, used solely for his own benefit. His only policy goal is more personal power. ..."
"... These pieces that characterize China as some sort of “evil empire” undermine their authors’ credibility. Before complaining in a self-righteous and aggrieved tone over another country’s unfair trade and “national security” practices American commentators might want to take a closer look at this country’s conduct vis a vis its international partners and competitors. (They could also benefit from reading what Michael Hudson has to say about China’s economic practices.) ..."
"... Trump Never Had a Grand Strategy for any action, Including China ..."
Many rationales have been deployed by the president to explain his ongoing embrace of the
tariff weapon. None, however, fully stack up.
Trump has been compared to previous
"tariff men," such as former Republican President William McKinley , who explicitly
campaigned in the 1896 election on a protectionist platform. Like McKinley, Trump has expressed
his support for tariffs in nationalistic terms. He sees them less as a tax on the domestic
consumer, more a key tool to make American business great again, as well as claiming that
tariffs represent a valuable source of
government revenue . This appeal to historical precedent is another worn-out lie to justify
a stupid policy. As the Washington Post
points out , "tariffs haven't been a major source of U.S. revenue in 100 years," and Trump
himself explicitly exempted certain products from tariff increases until December 15 because of
his concern about
the costs that they would impose on U.S. consumers as we head into the Christmas shopping
season. The revenue generation argument is particularly laughable, coming from a man whose
entire working life, both in the public and private sector, has been marked by a complete
indifference to debt buildup, let alone fretting about
paying it back . It's a true perversion of history to connect Trump's tariff legacy in any
way to that of McKinley.
Conversely, is the goal to disrupt supply chains and re-domicile them back to the U.S.?
If so, then where is his administration's support for R&D, education, and other industrial
policies that could enhance national development, thereby making the U.S. a more attractive
place to reclaim high valued-added supply chains? For example, Apple CEO Tim Cook,
justifying his company's decision to manufacture iPhones in China,
pointed to the abundance of skilled manufacturing labor in that country, along with
Beijing's decision to emphasize vocational training at a time when the idea has been virtually
abandoned in the U.S. This a problem that predates Trump, but the president has done nothing to
rectify the deficiency. In fact, his secretary of education is viscerally hostile to the very concept of
publicly funded education (of any kind), as well as being
a shill for charter schools and privatized voucher programs (in which her family
has vested economic interests ).
As
Robert Atkinson and Michael Lind argue in a recent American Affairs article, "Trump proudly
touts his tax cutting and deregulation prowess, while his budgets slash support for key
national investments in building blocks like research and development, manufacturing support
programs, infrastructure, and education and training." This comes at a time when America's
infrastructure is already one of the worst in the developed world
.
Does the president just want to offer American businesses a temporary respite from hostile
Chinese mercantilism via tariffs? If so, his tariffs have hitherto been singularly unsuccessful
in stopping Beijing's mercantilist efforts to try to maximize global market share by dumping
below cost until its foreign rivals are driven out of their home markets. Furthermore, as
recent events have illustrated, there is little Trump can do if and when China devalues its
currency to offset the impact of the increased tariff charges he has introduced (or threatened
to revive).
Is Trump concerned about national security? U.S. lawmakers and intelligence officials have
claimed, for example, that both Huawei and ZTE could be exploited by the Chinese government for
espionage and
sanctions-busting respectively, presenting
a potentially grave national security risk. Yet the president has often appeared prepared
to ignore these concerns, in the interests of using these companies as trade bargaining
chips , designed to secure some additional purchases of American soybeans or, more
generally, as part of a bigger trade deal.
To be sure, some of the president's criticism of the historic status quo in trade is valid,
as the post-industrial wastelands strewn across the country illustrate. China's entry into the
World Trade Organization had
a profoundly negative impact on U.S. manufacturing jobs . We therefore need a national
development strategy that breaks with many of the shibboleths of the so-called " Washington
Consensus ." As I've written
before , the policy goal should be to "change the labor share of the production equation,
so that production vastly increases general welfare and living standards for the largest
possible majority of people. By conducting policy with a view toward favoring labor over
capital, the aim is to produce a larger economy, and more stable (albeit restrained)
profits."
Historically, America has not always approached things simplistically through the lens of
the free market/market fundamentalist paradigm. After World War II, figures such as A.A. Berle
and John Kenneth Galbraith advocated global cartels in commodities to raise incomes in
developing countries, and thereby become additional sources of demand for American
manufacturers. They also looked benignly on transnational industrial cartels at home in the
U.S. Berle, Galbraith and others were advocates for local content requirements so as to
sustain America's industrial ecosystem. And they favored buffer stocks to reduce global booms
and busts.
If Elizabeth Warren and her team better appreciated this history (and Warren is the leading
Democrat offering a
significant reassessment on American trade policy today), they would see that there is a
rich counter-tradition that goes beyond a mindless resort to tariffs or simply breaking up
successful multinational companies that are among America's most profitable. Warren and others
might reassess the virtues of selective cartelization and cooperation. She and other Democratic
presidential candidates could give consideration to constructing a size-neutral regulatory
framework to ensure that such companies operate in the interest of national economic strategy
consistent with military security and widespread prosperity in order to obtain maximum benefits
for American workers and regions. As venture capitalist Peter Thiel has recently argued ,
it is perverse for Google to refuse to do business with the U.S. Pentagon, while conducting
artificial intelligence work in China, which uses AI to sustain its own authoritarianism and
mass surveillance.
Likewise, Big Three tripartism -- a form of economic collaboration amongst businesses, trade
unions, and national governments -- should be further embraced to enhance economic prosperity
and cope with the challenges of state-sponsored Chinese mercantilism. Both market
fundamentalists and pro-business oligarchs like Trump may dismiss collective bargaining as
another kind of labor cartel (the Clayton Antitrust Act, however, exempted unions from
antitrust). One can be both pro-business and pro-labor (i.e., pro-"
national developmentalism "), as Warren appears to be. There is nothing inherently
contradictory in terms of favoring limited pooling in employer federations that can bargain
with unions, R&D consortiums, export consortiums, etc., while allowing these entities to
retain their identity even as they compete with one other. Policies can also be designed to
compensate for the higher cost of labor in SMEs via
Fraunhofer industrial extension services that enable small producers to compete on the
basis of technology, not low wages.
Enough with the "tariff tantrums." Or the silly idea that a modern economy can forfeit
manufacturing to its rivals and specialize in finance, entertainment, tourism, and natural
resource industries like farming, while making empty pledges about retraining and relocation to
help the "losers" of global integration (promises seldom kept).
We have a domestic crisis, and must do better than simply retreat to the delusions of
neoliberalism or mindless protectionism if the American people are to come out as winners in a
viable future trade framework with Beijing and the rest of the world.
A multi-polar world became a uni-polar world with the fall of the Berlin Wall and Francis
Fukuyama said it was the end of history. It didn’t take the US long to lose that advantage. The US was immersed in the cult of individualism and didn’t think about the bigger
picture.
“There’s class warfare, all right, but it’s my class, the rich
class, that’s making war, and we’re winning.” Warren Buffett, 25 May
2005
That’s all very well Warren, but how is the US doing against China?
Who cares, I’m making loads of money. Oh dear.
US elites have had their snouts in the trough, and have been so busy gorging themselves
they didn’t notice a new superpower rising.
The 1950s American Dream was captured by John Kenneth Galbraith in “The Affluent
Society”.
“The family which takes its mauve an cerise, air-conditioned, power-steered and
power-braked automobile out for a tour passes through cities that are badly paved, made
hideous by litter, lighted buildings, billboards and posts for wires that should long since
have been put underground. They pass on into countryside that has been rendered largely
invisible by commercial art. (The goods which the latter advertise have an absolute priority
in our value system. Such aesthetic considerations as a view of the countryside accordingly
come second. On such matters we are consistent.) They picnic on exquisitely packaged food
from a portable icebox by a polluted stream and go on to spend the night at a park which is a
menace to public health and morals. Just before dozing off on an air mattress, beneath a
nylon tent, amid the stench of decaying refuse, they may reflect vaguely on the curious
unevenness of their blessings. Is this, indeed, the American genius?”
Private luxury, public squalor
In those days his book made quite a stir and made policymakers rethink their priorities. I
don’t think it would have the same impact now.
It’s a very good book and as relevant today as it was then.
Did you know capitalism works best with low housing costs and a low cost of living?
It’s obvious really.
Employees get their money from wages and the employers pay high housing costs through
wages, reducing profit and driving off-shoring.
This is how Asia did so well at the expense of the West during globalisation. You just
can’t pay those wages in the West, workers can’t afford to live. Multi-national
corporations could make higher profits in Asia due to the low cost of living that they had to
cover in wages.
It’s easier to see with this little equation.
Disposable income = wages – (taxes + the cost of living)
(Michael Hudson condensed)
There is another term in the brackets with taxes.
Current ideas of capitalism comes from neoclassical economics, which is very different to
classical economics.
William White (BIS, OECD) talks about how economics really changed over one hundred years
ago as classical economics was replaced by neoclassical economics.
He thinks we have been on the wrong path for one hundred years.
We think small state, unregulated capitalism is something that it never was, which is
leading to all sorts of problems.
The West never realised that in an open globalised world, the West would be at a severe
disadvantage due to its high cost of living. The West set the rules in a game where China was
guaranteed to win, and it went from almost nothing to become a global superpower.
Observing the world of small state, unregulated capitalism in the 19th century
“The interest of the landlords is always opposed to the interest of every other
class in the community” Ricardo 1815 / Classical Economist
“But the rate of profit does not, like rent and wages, rise with the prosperity and
fall with the declension of the society. On the contrary, it is naturally low in rich and
high in poor countries, and it is always highest in the countries which are going fastest to
ruin.” Adam Smith / Classical Economist
I suspect ‘they’ notice. Just a shift of their assets. ‘US Elites’
can leave anytime they want as they have multiple nice homes around the world. No real
allegiance to anything except money.
This article touches on it but really should dwell on it more—-the big picture is
that China policy is a bipartisan failure since before China entered the WTO, apart from the
transfer of wealth from the American middle class to the 1% and China and turning America
into an addict of low(er)-cost, disposable consumer goods.
Feature, not a bug. Trump is a reaction to the disease, not the cause.
Many years ago I read a book about the Japanese exporting machine and how it worked in
practice. What would happen was that every time a Japanese-built car left the docks on a boat
to an overseas country, the Japanese government would write out a cheque to the car
manufacturer for I think about for $600 for every car. That way, when those cars hit the
docks wherever they were being delivered to, that car could be sold for $600 cheaper than the
locally made cars which was designed to send them out of business. France got wind of this
scheme so what they did was to impose a $600 tariff on those very same Japanese cars when
they hit their docks which brought them up to their real cost. Smart move that though
probably illegal these days.
At the time I read that book I thought perhaps a tariff system might work where for any
import that had a local competitor, a tariff could be imposed so that the imported and the
local product were equally priced. Then it would be up to the customer to choose on the basis
of quality. Well it is far too late for that idea as globalization has hollowed out western
manufacturing ability. As Auerback has pointed out, tariffs make no sense unless you are
willing to put in the money to develop R & D, education and industrial policies. I
thought that a core of technical and industrial expertise would be fenced off around the
US’s military production abilities but from an article that appeared on NC recently,
the horse has long bolted here too. I think that real change will only take place when our
just-in-time global supply chains are broken down either through trade conflict or through
the effects of climate change. There is too much money being made in the present set up to
have it change.
Yes. This is one of the better articles written about the absolutely insane and almost
suicidal trade policy our elites have pursued and what goals we should pursue. These are key
points made:
“where is his administration’s support for R&D, education, and other
industrial policies that could enhance national development, thereby making the U.S. a more
attractive place to reclaim high valued-added supply chains? ”
“the policy goal should be to “change the labor share of the production
equation, so that production vastly increases general welfare and living standards for the
largest possible majority of people. By conducting policy with a view toward favoring labor
over capital, the aim is to produce a larger economy, and more stable (albeit restrained)
profits.”
“presidential candidates could give consideration to constructing a size-neutral
regulatory framework to ensure that such companies operate in the interest of national
economic strategy consistent with military security and widespread prosperity in order to
obtain maximum benefits for American workers and regions. ”
I would say that these may imply lowering total factor costs in the economy through
efficient universal healthcare (10% of GDP), massive investment in infrastructure, increases
in educational attainment in trades and sciences and engineering, plus research and
development investments. We should also improve our defense structure to build strategic
depth and resiliency.
Granted, there may be many better strategies for optimizing trade to favor the US. Still,
if tariffs alone are so bad, why does virtually every other country use them? And maintain
them, often at stratospheric levels, for decades?
And decades happens to describe how long Democrats have done precisely nothing at all to
better US trade. In fact, they’ve advocated just the opposite.
So Trump can legitimately make a powerful and irrefutable argument that he has at least
taken concrete steps of some sort to fix the problem. And he can simply cite the
Democrats’ very plain record as proof they cannot be trusted on this score, no matter
what any of them say in primary season.
Could be wrong, but when considering the success or failure of the China tariff initiative
under some “Grand Strategy” that has been implemented to reorder US relations
with China and restore a US manufacturing base, I think it might be useful to move upstream a
bit and consider whether it aligns with this administration’s overall “Grand
Strategy”. To distill it down to its essence, it’s “Move Fast and Break
Things”.
IMO the objectives are to keep opponents off balance, maintain momentum toward further
concentration of power in the executive branch, enrich and politically empower the donor base
(and oneself), divert and redirect the public conversation into social issues, and assure
influential elements in media that resonate with the voter base remain supportive. Chaos,
fostering a perception of unpredictability, state erosion of civil liberties, active use of
markets as a policy tool, foreign military actions that are aligned with the objectives of
influential members of the base, killing congressional legislation in the Senate or
regulations that might disrupt neoliberal policies, and state subsides of favored
constituencies are viewed as positives under this overall strategic framework.
We see this overall strategy repeated in department and agency staffing decisions and in
executive orders on policies ranging from China and trade to the environment, climate change,
public lands and resources, deregulation and public subsidies for Wall Street, military
initiatives, immigration policy, government shutdowns over the budget, etc. In the eyes of
his “true base”, as one of his predecessors called them, I suspect this guy is
considered to be doing a great job. “[S]upport for R&D, education, and other
industrial policies that could enhance national development” isn’t really even on
the table.
Thank you. Exactly. Trump is a shameless opportunist with a standard set of tactics, used
solely for his own benefit. His only policy goal is more personal power.
These pieces that characterize China as some sort of “evil empire” undermine
their authors’ credibility. Before complaining in a self-righteous and aggrieved tone
over another country’s unfair trade and “national security” practices
American commentators might want to take a closer look at this country’s conduct vis a
vis its international partners and competitors. (They could also benefit from reading what
Michael Hudson has to say about China’s economic practices.)
At the end of the day the the west made its own bed and now it has to lie in it. Trying to
pin the blame on China and Russia and roping them into a new nuclear arms race or terrorizing
much weaker countries like Iran and Venezuela will not change the fundamental fact that the
system we created is broken and unsustainable.
We broke it and only we can fix it.
The US moved West. Competition in the US was between the East & the West too. US had
cheap portable energy & people could pay their rent and have some money left over.
Obviously those who are collecting money from houses others move in and out of have the
opportunity to raise more money than those hoping the boss will give them a raise.
It seems that most of the land close to work has been purchased.
Michael Hudson has this situation figured out.
Does anyone force US businesses to buy foreign? Or is the US part of the Chinese empire
and therefore forced to buy its goods? I wonder whether the US military will wake up to the
lack of love of country in the US business sector and close the current forex driven version
of the racket down.
"... When the economic demise of the USA's examined, the middle finger will be pointed at Neoliberals and all their free lunch allies as they endeavored to sink every boat but their own. ..."
Thank goodness Karl Marx did all that work for us when he did!
Free Lunch worshiping Neoliberals have absolutely nothing when it comes to doing actual
work in the realm of political-economy and have had to rely on lies and force to enforce
their "doctrines."
When the economic demise of the USA's examined, the middle finger will be pointed at
Neoliberals and all their free lunch allies as they endeavored to sink every boat but their
own.
"... Few realize that neoliberalism (which relies on the capture of government and media) has allowed capitalist exploitation in ways that never dreamed of: strip-mining future generations via debt-funded government deficits, fracking society with identity politics, socializing corporate losses via bailouts and environmental destruction, and misallocation of resources via militarism/NWO adventurism. ..."
Brandon Smith - whose political and philosophical views I'm not clear on and thus do not
champion here - nonetheless has a nice deconstruction of the media and the typical lead times
involved when MSM is ordered to foreshadow economic collapse. He suggests six months for this
one, therefore early in 2020, with Trump as the obvious fall guy. Thus, a time for
carpetbaggers to strip more assets, for fascists to tighten controls on the general populace,
and for a new president for the US.
I often cite Shadowstats , but
almost never direct people to read the news it announces on its main page. In response to
Grieved @4, I suggest clicking above and reading the Daily Update and Alert sections followed
by whatever else is fancied to see that indeed a recession is more than forecast:
" ShadowStats' Recession Forecast Remains in Place, With U.S. Economic Activity Still
Sinking; Watch for Continued Flight from the Dollar and Stocks into Gold. Beyond
intensified near-term market risks, the ShadowStats broad outlook in the weeks and months
ahead remains for: (1) a rapidly intensifying U.S. economic downturn, reflected in (2)
mounting selling pressure on the U.S. dollar, (3) continued flight to safety in precious
metals, with upside pressures on gold and silver prices, and (4) increasingly high risk of
extraordinarily heavy stock-market selling. " [Emphasis Original]
The main things I point to using Shadowstats are Unemployment and GDP which are located at
the dropdown Alternative Data menu. Take a look at each, then read the forecasts on the main
page to make your own conclusions. On the older HK protest thread, I linked to this
essay since it tells us how we were maneuvered into our current mess. Most have heard the
term Enron Accounting. Well, that was happening long before Enron became incorporated But we
need to have a Critical Mass of the citizenry understand that fact before we can enter into
the Political Fight required to rescue ourselves.
reply to
"The key wasn't the type of class [for a successful revolution]; rather, the key is the
solidarity of whatever the class consists of--it could even be multi-classed as in poor plus
poor-middle, which is currently the largest within the Outlaw US Empire."
Posted by: karlof1 | Aug 22 2019 18:15 utc | 5
And the ruling class answer to that? Is to fragment the proletariat into ideological
factions fighting on the basis of: races, religions, gun rights, education levels, cultures
along with a massive dose of medically induced addictions.
The fact that the Democratic Party has made these issues its platform may indicate that
"they" fear a coming awakening before they have managed to secure complete control. Here's
hoping:)
karlof1 @5 said: "Marx's biggest erroneous assumption dawned on me..."
I may be wrong, but I thing you might be confusing Marx's definition of "working
class" with the vulgar and unscientific contemporary definition.
"Working class" does not mean "simple and uneducated laborers with dirt under
their fingernails". For Marx, "working class" has a very specific and scientific
definition, which is the individuals in society who do not own the capital resources
necessary for them to be productive.
In common usage, "working class" is used to refer to people whose salaries are
below some certain level, or who work in manufacturing, or something equally arbitrary. In
the scientific sense, though, the better rough test if someone is a member of the "working
class" is whether or not their income comes from a paycheck with someone else's signature
at the bottom. Do you live off a paycheck? If so, it doesn't matter how big that paycheck is,
within Marxist analysis you are working class. If you do not see yourself as working class it
is because you lack class consciousness, not because you are not working class. A pilot
making $100k/year, assuming he does not own the airliner he is flying, is working class. A
doctor making $200k/year, assuming she does not own the hospital where she works, is working
class. If you make your living by selling your labor to someone who owns capital, then it
doesn't matter how valuable, highly trained, or esoteric your labor is, or whether it is
mental or manual labor, you are working class.
A few percent of Americans are big capitalists who live off their ownership of capital.
Roughly 10% of Americans are little capitalists who own the tools of their trade and are
self-employed. The rest of Americans are either working class, or unemployable sub-working
class.
I'd say using such scientific definitions that pretty close to 80% of Americans are
working class, and that this is fairly similar to the distribution in most developed
countries.
By the way, solidarity is a side effect of class consciousness.
Yes, Divide and Rule ought to be the motto on the USA's money for that's what it's done
over most of its history, particularly since the rise of modern political parties just prior
to the US Civil War. Indeed, being able to arrive at a high degree of solidarity almost
allowed the People's Populist Party to gain the presidency, but it made the strategic mistake
of diluting its solidarity when it fused with that age's D-Party. The primary factors of
division then--sectionalism and racism--were deliberately escalated to include all the facets
of what's now known as the Culture Wars. It would be quite the coup if the situation could be
reversed and the Current Oligarchy's solidarity could be shaken and destabilized to a similar
degree.
Thanks for your reply! The 80% figure came from Marx's writings, although which I'd be
hard pressed to cite at the moment. I agree with your comment on the semantics that drive the
categorization, which is why I linked to The Imperial Middle in my comment since its
class consciousness was directed at trying to become upper-middle then upper class rather
than combining common cause with the lower-middle and lower classes. Indeed, the concerted
effort to eliminate Class as a classifier has succeeded to a great degree within the Outlaw
US Empire such that class consciousness is more often discussed in academia than within the
wide variety of work spaces. An example, my partner and her son were both raised in the
rabidly anti-union South--Georgia specifically--but both now find themselves union members at
their jobs here in Oregon and have needed to be educated about the nature of unions and their
advantages, part of which is becoming cognizant of the class within which you reside. And
yes, it's been a struggle since they were so well indoctrinated by anti-union
propaganda--it's not enough to point to Georgia's adherence to the federal minimum wage while
Oregon is well above it and rising further as one of the main indicator's of unionization's
importance.
Anyway, when Occupy Wall Street began, I was impressed by their use of 1% versus the 99%
to try and promote solidarity and class consciousness. Sanders and others use the term but it
has yet to be absorbed by the mass body politic. How do we get that message through
the massive number of distractions deliberately emplaced to ensure that doesn't occur? How
can you hear the voice of the carnival barker over the noise of the rides?
I know that I am scared. If the American Empire collapses, there goes my pension just like
the Soviet Union. My family needs it to stay alive. Capitalists who avoided being involved
with Maria Butina or imprisoned in Metropolitan Correctional Center have enough sense to
realize a crazy** plutocrat President, Negative Interest Rates, and the continued grounding
of the unsafe 737 Max(s) are going to play hell with their portfolios. NY Times stated the
obvious, "C.E.O.s Should Fear a Recession. It Could Mean Revolution."
**Only a nutty insular Ugly American who never watched the Danish TV show "BORGEN" would
cancel the meeting their PM because she said selling Greenland to the USA is
"absurd".
This point is so huge, it's the mammoth in the small and ever-contracting room that
comprises what remains of Marxist thought. So sadly extinct, perhaps, and it reveals quite
how far the fake left have gone from the theoretical, and in my view practical, roots of
Marxism.
To me, historical materialism and the division of society based on an individual's
relationship to the ownership of the means of production was self-evident from my first weeks
of working in a warehouse in a summer job as a teenager. Of course, I didn't associate it
with such vocabulary at the time, as my exposure to the economic theory which explained what
I experienced lay ahead of me in the years to come.
What I would also come to understand, and would have to accept, is that most people didn't
see it like that.
The idea of a 1% ruling class is a metaphor, but it's a working model to envisage a small
tip of a pyramid ruling over the 99%. Such an imbalance shoud clearly be incapable of
maintaining its dominance, and it does so by drawing a sufficient volume of the rest into its
orbit, and sharing some power (or creating an illusion of doing so) to create a middle class
in alliance with the
ruling class over the proles. Many/most of the 'proles' wouldn't consider themselves as such,
as they are educated and working in an office that doesn't resemble a coal mine or production
line, despite having very little money left after, for example,substantial housing and
education costs. (What that ruling-middle-class alliance consists of is beyond the scope of
this post.)
Were there a genuine class-consciousness based, not on perhaps archaic notions of cultural
class (flat caps and strong regional accents for example), but on whether you depended on
your wage or whether you enjoyed substantial returns on capital ownership, then there might
be a genuine collective sense of political agency among the actual masses, where solidarity
and the threat of mass withdrawal of labour would make them a social force, or class, to be
reckoned with - were there to be a shared political direction.
I suspect that the jewel in the crown of the elite is identity politics. If the fake left
hadn't invented this disaster for genuine working-class (in the widest sense) solidarity,
then the capitalists would have had to invented it themselves. Maybe they did? Divide and
Rule. The oldest imperialist and ruling class trick in the book. Get women versus men,
religions v each other and them all against secularists, LBGTQ+ v 'normies' etc, and bingo!
No chance of a wider working-class unity, especially when the very notion of traditional
'working class' can be demonised as backward, xenophobic and brutal.
And of course it is the fake left that marches to the banner of identity politics, where
it seems the only groups excluded are the traditional working class - and if they were
included would it help? No - if they are just another self interest group fighting for their
place in a new, divisive pecking order of grievance and hopefully privilege, if they can get
to be recognised. So class consciousness in the framework of identity politics would lack the
universalism needed to pose a challenge to the elite. A new understanding of class would need
to shatter the barriers that the fake left have erected, and get ordinary, working people, on
a wage, to see what they have in common, and not what makes them different.
I'd finally add that this analysis, which although I consider Marxist, doesn't implicitly
endorse any specific model or road map of socialism, (if at all) as that's another question
really. Rather it is to illustrate how a potential opposition to the current ruling class
could unite to propose an agency for change, which when faced with the forever endless war of
the ruling class, should at least be a consideration.
reply to
"What gives me hope, though, is how frightened the elites are acting. In some respects they
have a better perspective on things... the higher your point of view the further you can see
and all of that."
Posted by: William Gruff | Aug 22 2019 20:48 utc | 3
Yes, they do appear to be frightened it is very visible in the way they have taken the
rants against Trump to a level that is manic.But their grip seems to have slipped.
A Rasmussen poll found that more than fifty percent do not believe the media when it comes to
Trump and see ongoing and consistent MSM bias.
In addition, the ruling elite appear to be planning yet another recession to knock everyone
down a few pegs as they seem to do every ten years or so. This time they seem to be rushing
into it, possibly trying to launch it before the elections.
What is also interesting is the reaction of people to Epstein's supposed demise. No one is
buying Barr's diagnosis of "suicide." Was it Zappa who said something about the drapes coming
down and you see the brick wall?
Is there hope of real change?
I have been reading up on 5G and given the control mechanisms already in place, if 5G has the
control capabilities it is purported to have, once they roll that baby out it is game over.
So is there hope? I suspect not.
Thanks for providing that Merkley newsletter. I probably have one too, but haven't opened
my email today. As you saw, I culled through lots of Hudson to provide some views. You and
others have asked what solutions does Hudson suggest. What follows is his most direct,
succinct formulation for What
Must Be Done :
" The only way to control banks and their allied rentier sectors is outright
socialization. The past century has shown that if society does not control the banks and
financial sector, they will control society . Their strategy is to block government money
creation so that economies will be forced to rely on banks and bondholders. Regulatory
authority to limit such financial aggression and the monopoly pricing and rent extraction it
supports has been crippled in the West by 'regulatory capture' by the rentier oligarchy.
Attempts to tax away rental income (the liberal alternative to taking real estate and
natural resources directly into the public domain) is prone to lobbying for loopholes and
evasion, most notoriously via offshore banking centers in tax-avoidance enclaves and the
"flags of convenience" sponsored by the global oil and mining companies. This leaves the
only way to save society from the financial power to convert rent into interest to be a
policy of nationalizing natural resources, fully taxing land rent (where land and minerals
are not taken directly into the public domain), and de-privatizing infrastructure and other
key sectors ." [My Emphasis]
So, your "one note samba" is 100% on the mark. But as I asked earlier regarding a related
issue, how do we implement the medicine? How do we overcome the forces of reaction
that have so many levers of control without physically eliminating them? Or, is that the only
open road? Somewhat relatedly,
Sanders has unveiled another major portion of his electoral campaign platform.
IMO, Trump can't be allowed another term, nor can any version of Trump-lite such as Biden.
It certainly appears as I anticipated that Sanders is adding every additional Progressive
policy proposal to his campaign's platform, which is resulting in the gathering of diverse
factions under his tent. The BIG question: Will Sanders stick to his proposals or prove to be
another Obama and sell out as it appeared to many in 2016? That's THE question I want to ask
to his face up close and personal. And I bet a few million more folks want to do the
same.
Marx was concerned with the struggle between the owners of productive assets and those who
utilized those assets to create valuable products.
Few realize that neoliberalism (which relies on the capture of government and media)
has allowed capitalist exploitation in ways that never dreamed of: strip-mining future
generations via debt-funded government deficits, fracking society with identity politics,
socializing corporate losses via bailouts and environmental destruction, and misallocation of
resources via militarism/NWO adventurism.
Capitalist-friendly propaganda claim that the will of the market = the will of the people.
As usual, they don't tell you the whole truth: the market is not 'complete' and therefore the
price of extraction seems much less than it is.
Once the true costs of neoliberalism become apparent, the revolution begins.
By Peter Dorman, professor of economics at The Evergreen State College. Originally
published at Econospeak
Not content to follow a news strategy that maximizes
Trump's prospects for re-election , the New York Times leads today with a
story that combines economic illiteracy and reactionary scaremongering in a preview of what
we're likely to see in the 2020 presidential race.
"Budget Deficit Is Set to Surge Past $1 Trillion" screams the headline, and the article
throws around a mix of dollar estimates and vague statements about growth trends, leavened with
quotes from budget scolds from both Republican and Democratic sides of the aisle. (That shows
balance, right?) After terrorizing us with visions of a tide of red ink, the article concludes
with a ray of sunshine in the form of prospects for a Grand Bargain under a lame duck Trump
that would cut benefit programs like Social Security and Medicare to put us once again on a
stable path.
Where to begin? Should we start by mentioning that nowhere in this lead article does it give
the single most relevant statistic, the ratio of the federal budget deficit to the size of the
overall economy -- the money part, GDP. The raw size of the deficit itself is meaningless, and
the trillion dollar line is meaningless squared. As Dean Baker likes to say, the article shows
its respect for our powers of thought by informing us the deficit is a Very Big Number. Scared
yet?
Measurement aside, the article simply assumes that "large" deficits are unsustainable and
bad, and that only irresponsible political motives prevent action on them. In the name of a
nebulous, unspecified Evil of Debt, the population of the US must be subjected to a regime of
austerity, beginning with cuts in the programs many depend on to keep themselves and family
members out of poverty. Worse, it opines, Democrats will run for office next year on a platform
of spending increases, demonstrating they are the party of ruin. We can only hope, goes the
argument, that they are just saying these things to get votes from the gullible public, and
once in power they will join the deficit-cutting crusade.
No reason is given for the assumed Evil of Debt, and it's no surprise, since it's based on
ignorance, willful or otherwise. To begin with, federal debt is denominated entirely in US
dollars, so servicing is not a problem. Countries that borrow in foreign currencies, like
Greece (which had no control over the euro) and Argentina, can default; that's not a problem
for the US. Second, government debt is private wealth, and the relevant question is whether
there are too many or too few government bonds in private portfolios. If private wealth holders
are satiated with public debt and prefer other securities, it would be a problem. But that
would be a world in which interest rates on the debt would be high in order to sell them, and
rates are about as low as they can go without flipping negative (as they have elsewhere).
Meanwhile, government debt is an injection of spending power into the economy that
counterbalances the leakage of a significant, ongoing trade (and current account) deficit.
That's not quite the right way to put it, since private and public net deficits, taken
together, arethe
current account deficit . Once you understand what this means, you can't avoid the economic
shrinkage -- austerity -- aspect of deficit-cutting, since that's what keeps the identity
identical at any point in time. Of course, that doesn't mean the government's deficit is at the
right level, just that the pluses and minuses of adjusting it have to be considered concretely.
Is it difficult to imagine that, at a time when interest rates are very low and the need for
new infrastructure and other public investment is very high, that the current level of
borrowing may well above that terrifying $1 trillion figure?
What we have today is just one article, by itself not very significant. We have seen,
however, that the drumbeat of repeated media misinformation can create a climate of opinion
that makes idiotic policies appear reasonable; just look across the Atlantic at Brexit. The
time to expose ignorance and propaganda is always now.
To tell you the truth, it is hardly worth demolishing the arguments for austerity as even
the World Bank's experts say that it is a shockingly bad idea which always makes things
worse. So, radical times requires radical solutions – or maybe even stupid ones.
Looking online I see that the price of aluminium is about $1.80 cents per kilogram. Now
suppose we took a dime's worth of aluminium which would work out to be about 28 grams –
or about 1 ounce. For context, the biggest US coin – the Half Dollar – weighs
about 11.34 grams. They then took this bit of aluminium to one of the four working Mints in
the US – the Philadelphia Mint, the Denver Mint, the San Francisco Mint or the West
Point Mint – and then had it punched into a coin with some fancy design on it. Maybe
even Trump's profile to get his support. From here they took it over to the US Treasury
Building at 1500 Pennsylvania Avenue in Washington. There they assigned the value of that
newly-minted coin as $1 trillion dollars, deposited it into the Federal accounts, and then
used it to pay a $1 trillion dollars worth of debt. There! Problem solved for all those
austerity fans! And I suspect that my solution is arguably more realistic than the arguments
of those supporting austerity
Under current law, it would be a platinum coin. There's an obscure provision of a '90s era
law concerning the Treasury that (perhaps unintentionally) authorizes the Treasurer to mint
platinum proof coins in unspecified face-value denominations at his discretion.
I suspect that the Fed could be able to fund infrastructure spending by extending its
unconventional asset purchase strategy to new or recently issued infrastructure bonds.
All sorts of things might be possible if there were political will.
Every time I mention trillion dollar platinum coins, I get shouted down with "what about
runaway inflation????" jeers. But, using Sound of the Suburbs equation,
MoneySupply = public debt + private debt + coinage
replacing public debt with platinum coins doesn't change M at all. Is this wrong?
I think that's right (I think one would include "currency in circulation" as part of
"public debt", currency being a zero interest bearer bond issued by the government [treasury
or CB]).
Per the MMT theorists, public debt can be a useful thing -- it provides interest to people
who need income and cannot tolerate risk to principal (retirees, insurers, etc).
The fundamental flaw in the NYT framing is that the public deficit is functioning as a
support to an economy that is not generating enough demand to reach full employment -- but
under current policy the deficit is doing this very inefficiently (tax cuts to people with
low marginal propensity to spend has a low multiplier). Framing it that way changes the
entire tone of the discussion.
this discussion misses the fact that there is still a global shortage of investment grade
debt; witness negative interest rates in Europe and Japan retire any of that debt, and the
shortage gets worse
If Bernie needs a source of funds for his new $16 Trillion climate agenda, I hereby
volunteer to cash out my meager pension, buy a pound of platinum, and deliver it to a mint
facility personally for processing into sixteen one ounce trillion dollar coins.
My bad -- that link suggests that there is more flexibility than "just" platinum proof;
but in any event the constraint is political will rather than the details of the laws.
Austerity evidently benefits those who set the policy.
It is very much worth to demolish arguments for austerity, since the World Bank apologizes
for advocating for it on one day, just so it can sell it one more time as THE solution to a
developing country's woes.
We must not silence until this abhorrent set of policies is banished from everyone's
minds.
Why is it that the runaway unsustainable programs are always Social Security, Medicare,
and Medicaid, but never the ballooning defense department budget? Why is it that day by day I
feel more and more like a subject and less and less like a citizen?
"Government set to inject more than $1 Trillion into US economy this year, but poorly
targeted and still isn't enough to improve the lives of most people".
I was going to re-write the headline, Samuel conner covered me.
"Federal policy makes it rain on 1%, causing torrential flooding in luxury goods and asset
prices. Rest of country remains parched in multigenerational drought"
We have been intentionally taught this hocus pocus 'fake news' interpretation of our
national finances. Why? Because it suits the purposes of capital; the further enrichment of
the billionaire class and the corporations they own. All those Treasuries are owned primarily
by the owners of capital. We are forced to be the borrowers of debt we do not require. The
wealthy become our creditors. How brilliantly evil this is. By issuing them we insure the
safety of their immense savings. That is the true purpose of these Treasuries. It is a
subsidy to the rich. Debt is not intrinsic to funding our federal spending. Congress creates
new currency when it pays a bill. For every deficit dollar spent, a dollar of savings is
created at the same time. One needs to understand who possesses those savings. If you don't
know that, you know next to nothing.
Treasuries have two purposes, neither of which is supply money to a Monetarily Sovereign
government that has the unlimited ability to create its own sovereign currency.
The two purposes are:
1. To provide a safe place to park unused dollars (which helps to stabilize the dollar).
2. To assist the Fed in setting and controlling interest rates.
Rather than calling this "debt" we should more properly call it "deposits." Everyone loves
deposits. Problem solved.
Unless the yields are positive* then we have welfare proportional to account balance.
*Actually non-negative given the overhead costs of sovereign debt. That is, inherently
risk-free sovereign debt should return no more than ZERO percent minus overhead costs.
Spot-on . Whenever I read this nonsense in the NYT or elsewhere I always ask myself the
same question ' Is this deliberate or are they really ignorant ? ' . I suspect the latter,
but I could be wrong.
Something that annoys me to no end is that critics of the size of the US deficit appear to
be unaware that it is largely non-government choices that control where the annual deficit
"lands", for any given set of public policies. The prevailing framing is that the size of the
public deficit is "controlled" by the choices of the government and that is not true.
It's not hard to do thought experiments that illustrate that in fact it is the
non-government actors' savings decisions that determine how large the public deficit will be
(given a defined set of policies). Every private sector spending decision generates private
income (net of taxes) and tax revenue to the public sector. This continues as long as the
private income portion keeps getting spent by successive recipients of the income generated
by the successive private spending choices.
An additional dollar of public spending will result in X cents of private savings and 100
– X cents of increase to the cumulative public deficit. X is determined by the private
sector -- whether it wants to spend or save its income.
(This is all in a two-sector model: domestic public sector and domestic private sector;
inclusion of the external (non-domestic) sector adds a little complexity without changing the
principle that the causality of the magnitude of the public deficit rests more with the
private (and external) sectors than with the policy choices of the public sector)
Those idiotic austerity bean counters need a new spreadsheet. Not debits and credits
declined thru the frenzied consumer economy and denominated in "money", but debits and
credits denominated in units of a clean environment, maybe combined with units of total
resources both those still in the ground and those waiting to be recycled. Another ledger
category besides money spent and environmental health could be a column or two for social
equity showing what we owe toward the well being of civilization. And another for scientific
progress. We have the most simplistic and pointless accounting imaginable. Who gives a
goddamn about a bunch of useless material junk financialized into tyrannical debits and
bribes for credits? Debit and credit cudgels. Jesus.
Not sure you need much more evidence that MMT is a delusion than the fact we have already
"injected" $11 Trillion dollars of debt spending into the economy in the last decade with
only sluggish growth to show for it. Ramping up future deficits from one trillion a year to
$2+ trillion a year in the name of MMT is not going accomplish greater prosperity.
"Faithless elector: A court ruling just changed how we pick our president" [
NBC News ]. "A federal appeals court ruled late Tuesday that presidential electors who cast the actual ballots for president
and vice president are free to vote as they wish and cannot be required to follow the results of the popular vote in their states
. But once the electors are chosen and report in December to cast their votes as members of the Electoral College, they are fulfilling
a federal function, and a state's authority has ended.
'The states' power to appoint electors does not include the power to remove them or nullify their votes,' the court said.
Because the Constitution contains no requirement for electors to follow the wishes of a political party, 'the electors, once appointed,
are free to vote as they choose,' assuming that they cast their vote for a legally qualified candidate."
Readers will recall
this post from December 16, 2016 , where I compared Democrat's scheme of persuading faithless electors to change their (presumed)
voters based on intelligence that would not be shown to the public to the Chilean Constitutional order under Pinochet.
Today, we would use the term "soft coup," but I still think that was a pretty good call.
Marx was concerned with the struggle between the owners of productive assets and those who
utilized those assets to create valuable products.
Few realize that neoliberalism (which relies on the capture of government and media) has
allowed capitalist exploitation in ways that never dreamed of: strip-mining future
generations via debt-funded government deficits, fracking society with identity politics,
socializing corporate losses via bailouts and environmental destruction, and misallocation of
resources via militarism/NWO adventurism.
Capitalist-friendly propaganda claim that the will of the market = the will of the people.
As usual, they don't tell you the whole truth: the market is not 'complete' and therefore the
price of extraction seems much less than it is.
Once the true costs of neoliberalism become apparent, the revolution begins.
"Government set to inject more than $1 Trillion into US economy this year, but poorly
targeted and still isn't enough to improve the lives of most people".
Spot-on . Whenever I read this nonsense in the NYT or elsewhere I always ask myself the
same question ' Is this deliberate or are they really ignorant ? ' . I suspect the latter,
but I could be wrong.
Excuse me, how can the deficit be increasing [with Trump tax cuts]?
I was told that a simple bell curve graph called the 'Laffer Curve' indicates that cutting
taxes increases growth which increases revenue. Its simply mathematics.
Well, Lawrence H. Summers is right to worry when he says "Can central banking as we know
it be the primary tool of macroeconomic stabilization in the industrial world over the next
decade?"
I remember when Qaddafi was murdered and Libya fell. Within the first day or two a central
bank was set up in Libya. And look how well that is working out for them.
"It sure is weird that the labor market is the only place where the magic of the
marketplace -- price! -- doesn't work."
I also hear weirdness about price considerations when I read investment advice for workers
and their 401ks.
"Don't worry about the price. Invest now as much as you can. You can't predict the market
"
(Looks down at Twitter feed).
Haha so right and we mistakenly claim that economists don't know how the real economy
works. They know, and part of that knowledge is that you need to shill the BS for those with
the money if you wanna get your own piece of said pie.
"... The current neoliberal order failed to suppress China development enough to block her from becoming the competitor (and the second largest economy.) ..."
"... That's why a faction of the USA elite decided to adopt "might makes right" policies (essentially piracy instead of international law) in a hope that it will prolong the life of the US-centered neoliberal empire. ..."
"... As much as Trump proved to be inapt politician and personally and morally despicable individual (just his known behavior toward Melania tells a lot about him; we do not need possible Epstein revelations for that) he does represent a faction of the US elite what wants this change. ..."
"... All his pro working class and pro lower middle class rhetoric was a bluff -- he is representative of faction of the US elite that is hell bent on maintaining the imperial superiority achieved after the collapse of the USSR, whatever it takes. At the expense of common people as Pentagon budget can attest. ..."
"... That also explains the appointment of Bolton and Pompeo. That are birds of the feather, not some maniacs (although they are ;-) accidentally brought into Trump administration via major donors pressure. ..."
"... In this sense Russiagate was not only a color revolution launched to depose Trump by neoliberal wing of Democratic Party and rogue, Obama-installed elements within intelligence agencies (Brennan, Comey, McCabe, etc.) , but also part of the struggle between the faction of the US elite that wants "muscular" policy of preservation of the empire (Trump supporters faction so to speak) and the faction that still wants to kick the can down the road via "classic neoliberalism" path (Clinton supporters faction so to speak.) ..."
It is not about the strategy. It's about the agony. The agony of the US centered global
neoliberal empire.
Trump and forces behind him realized that current set of treaties does not favor the
preservation of the empire and allows new powerful players to emerge despite all
institutionalized looting via World Bank and IMF and the imposition of Washington Consensus.
The main danger here are Germany (and EU in general) and, especially, China.
The current neoliberal order failed to suppress China development enough to block her from
becoming the competitor (and the second largest economy.)
That's why a faction of the USA elite decided to adopt "might makes right" policies
(essentially piracy instead of international law) in a hope that it will prolong the life of
the US-centered neoliberal empire.
As much as Trump proved to be inapt politician and personally and morally despicable
individual (just his known behavior toward Melania tells a lot about him; we do not need
possible Epstein revelations for that) he does represent a faction of the US elite what wants
this change.
All his pro working class and pro lower middle class rhetoric was a bluff -- he is
representative of faction of the US elite that is hell bent on maintaining the imperial
superiority achieved after the collapse of the USSR, whatever it takes. At the expense of
common people as Pentagon budget can attest.
That also explains the appointment of Bolton and Pompeo. That are birds of the feather, not
some maniacs (although they are ;-) accidentally brought into Trump administration via major
donors pressure.
In this sense Russiagate was not only a color revolution launched to depose Trump by
neoliberal wing of Democratic Party and rogue, Obama-installed elements within intelligence
agencies (Brennan, Comey, McCabe, etc.) , but also part of the struggle between the faction of
the US elite that wants "muscular" policy of preservation of the empire (Trump supporters
faction so to speak) and the faction that still wants to kick the can down the road via
"classic neoliberalism" path (Clinton supporters faction so to speak.)
Is Big Necessarily Bad?
Antitrust cannot be used as a cudgel based on size. There are other ways of whacking at corporate excess.
By
Marshall Auerback
•
August 19, 2019
Teddy Roosevelt with trust-busting stick, circa 1904. (Image: Library of Congress/Wikimedia Commons)
When it comes to relations between consenting adults, size may not matter (or so one
hears). But it's a different story in regard to companies and the politically fraught area of antitrust law.
Today, a number of
policymakers
,
economists
,
and
legal scholars
connect a host of
problems -- excessive wealth inequality, wage stagnation, political dysfunction, market distortions -- directly to the
corporate
"curse of bigness
," which they argue is a product of lax antitrust
enforcement. But they may be misdiagnosing the cause of these diseases and, in so doing, offering up the wrong cure.
Instead of moving toward a new antitrust paradigm, we might do better to consider a
more robust utility system of regulation that is "function-centric," rather than size-centric. In other words,
regulation that restricts the range of corporate activities (e.g., structural separation so as to prevent companies like
Amazon and Google from owning both the platform as well as participating as a seller on that platform), or the prices
such companies can charge (as regulators often do for utilities or railways). These considerations would be "size
neutral": they would apply independently of corporate size per se. Regulation, rather than antitrust, also better
addresses other issues like privacy protection (via a national model that could replicate
California's Consumer Privacy Act of 2018
),
labor abuses (it shouldn't matter whether workers are employed by Apple or mom-and-pop sweatshops), and controlling
"fake news" dissemination (by placing social media companies under the purview of the Federal Communications
Commission).
"Break 'em up" has great historical resonance in the United States. Yet one of the
nation's earliest trust-busters, President Theodore Roosevelt,
argued that
"the remedy for [corporate] abuse was not mindlessly breaking up big firms, but preventing specific abuses by means of a
strong national regulation of interstate corporations." Likewise, in the early days of the New Deal, his cousin,
Franklin Delano Roosevelt, initially embraced the antitrust philosophy of
Supreme Court Justice Louis
Brandeis
(who, like many of today's modern trust-busters, prioritized power
and business structure over consumer welfare). Ultimately though, frustrated that the incessant focus on corporate
concentration was hindering World War II efforts to mobilize greater industrial production, FDR
concluded
that
optimal outcomes were more likely to be achieved via "prudent government oversight and using antitrust laws to police
abuses -- not to break up every big company simply because it's big."
Advertisement
After World War II, historian Richard Hofstadter
noted a gradual public acceptance of big
business
. In large part, this was due "to the emergence of countervailing
bigness in government and labor" that ultimately led to the "big three tripartite" model among government, business, and
unions exemplified in the Treaty of Detroit agreement between General Motors and the United Auto Workers (UAW).
From the 1950s through the 1970s, "Tripartism" was exceptionally successful at
promoting economic growth and high wages (the wage growth was explicitly linked to rising productivity in the Treaty of
Detroit). Big unions flourished alongside growing conglomerates that emerged as the new face of corporate consolidation
(a prime example being International Telephone and Telegraph -- ITT). Equally significant, as the economist Thomas Piketty
observed in his sweeping account of rising inequality,
Capital in
the Twenty-first Century
, a new wave of corporate consolidation did not
exacerbate prevailing inequalities. To the contrary, this period coincided
with a diminution of wealth inequality
, as
relative wealth gains for the top tier stabilized for the first time in decades.
That all changed in the 1980s with the rise of Ronald Reagan's market fundamentalist
agenda. His presidency was characterized by a
sustained attack on unions
, cuts in public
services, and the ascendancy of the doctrine of "shareholder capitalism," used to legitimize the establishment of
SEC Rule 10b-18
. That rule engendered an
explosion in share buybacks (until it was introduced, companies buying back their own shares was considered a form of
stock manipulation). Rather than focusing on job-creating investment, corporate cash flow was thus directed toward stock
repurchases to fatten executive compensation.
The legacy of Reagan's market fundamentalism persists today. It is the most cogent
explanation we have for growing wealth inequality, wage stagnation, and reduced emphasis on corporate R&D.
This period also coincided with the rise of the
"Bork Doctrine,"
when, citing
Robert Bork, the Supreme Court asserted that the main focus of antitrust law should be on economic efficiency and
consumer welfare, as opposed to granting the government broad discretion to shape the economy. That shift in priorities
is a major source of the
neo-Brandeisians'
criticism of Bork's antitrust
philosophy. It reflects their Jeffersonian vision of a social-economic order organized along the lines of small-scale
businesses, with atomistic competition between a large number of equally advantaged units, in theory producing greater
innovation and economic dynamism.
But that's a highly idealized vision that doesn't comport with reality. Our modern
economy isn't comprised of village blacksmiths, yeoman farmers, and cobblers. A crucial component of the economy today
is big business, including many large multinational corporations that operate globally. And it is questionable whether
their size automatically equates to market power (in the sense of having the ability to manipulate prices at will and
exclude competitors), especially in the context of a global economy featuring a multiplicity of competing national
champions. Seldom do we hear calls to break up Detroit's "Big Three," despite global revenues in the hundreds of
billions. Why? Because there is a widespread recognition that these companies face significant challenges in a global
market dominated by similarly large competitors.
On virtually every meaningful indicator, including wages, productivity,
environmental protection, exporting, innovation, employment diversity and tax compliance, large firms as a group
significantly outperform small firms.
That insight parallels the scholarship of Joseph Schumpeter, the intellectual
godfather of the economics of innovation, who showed that R&D spending and productivity increase with scale. Latterly,
Schumpeter's insights have been validated by a recent study from Professors Ann Marie Knott and Carl Vieregger, who
conclude (emphasis added):
Not only do large firms (using the U.S. Small Business Association definition of
greater than 500 employees) conduct 5.75 more R&D in aggregate than small firms, they have 13% higher productivity
with that R&D. However this merely captures the private returns to their R&D. A further benefit of large firm R&D is
that
it generates the spillovers upon which small firm innovation free-rides
.
Size-centric antitrust proposals also ignore the increasing prevalence of economic
network theory, which suggests that social networks like Facebook or search engines such as Google lend themselves to
becoming natural monopolies in order to function optimally. Here again, function-centric regulation -- i.e., separation
between the control of content and distribution -- makes more sense to rectify market abuse. And this could be achieved via
utility-style regulation,
as no less a figure than right-wing populist Steve Bannon has suggested
,
rather than creating a bunch of new mini-Facebooks or Googles via court-mandated break-ups (especially if the owners of
the newly broken-up companies retain full control of algorithms to determine what people see in their News Feeds, what
privacy settings they can use, and even what messages get delivered to news consumers,
as Mark Zuckerberg does today
).
It is also the case that many businesses characterized by minimal levels of corporate
concentration -- construction, education, entertainment, accommodation, food, business services, transportation,
warehousing -- generally experience sub-standard productivity levels, sluggish growth, and low real wages, according to an
INET-funded study
by Professors Lance Taylor
and Özlem Ömer. Working conditions are generally worse, and wages and employment benefits lower, as small business
owners are often the first to protest increased regulation or "burdensome" mandates, such as health care provisions. The
real point is not to beat up on small businesses, but simply to note that the abuses commonly ascribed to big business
are just as, if not more, likely to manifest themselves in smaller industries less prone to corporate concentration.
What about the claim that corporate consolidation
contributes to a
corrosion of American democracy
? It is true that as companies get bigger, it
maximizes their abilities to "pay to play," as Professor Thomas Ferguson asserts in his seminal work,
Golden Rule
. Ferguson says that powerful blocs of business elites, large
and
small, with durable (largely
economic) interests, are a constant feature of American politics. All have an incentive to get bigger in order to
maximize political leverage. That includes smaller businesses that scale up via trade associations to maximize the
impact of their "political investment." But again, what is needed here is not an antitrust remedy, but a change in the
"pay to play" rules so as to ensure that money and corporate scale have less of a polluting impact on the American
polity.
So it may be time to reconsider the simplistic notion that "big is bad." Yes, we want
a dynamic economy and a thriving democracy. But mindlessly breaking up big businesses may not be the best path to get us
there.
Marshall Auerback is a market analyst and a research associate at the
Levy
Economics Institute
at Bard College.
This article was supported by the Ewing Marion Kauffman Foundation.
I notice that this entire article only once uses the word "monopoly", which AFAIK was the
entire point of America's antitrust laws. Instead the author chooses to focus on corporate
size. Hence the article's title: "Is Big Necessarily Bad?"
That suggests that he is
either missing the point of the antitrust laws or he's choosing to ignore it so as allow
him to bathe large corporations in a rosy glow.
BTW, as an FYI, I notice that this article was supported by Ewing Marion Kauffman
Foundation. As it happens that particular non-profit was founded by Ewing Marion Kauffman
who also founded Marion Laboratories. As it happens, Marion Laboratories was later bought
by Dow Chemicals, one of the top three chemical corporations.
That being the case, one can kinda see why they might support an article arguing that
big corporations aren't "necessarily bad".
The author might be right about attacking vertical domination, but it seems to me that an
important shortcoming of his analysis is failure to define "bigness," except to cite
someone else's definition as any company with more than 500 employees. Such a low bar
prevents the author from seriously grappling with the issue of "bigness." Any discussion
about whether or not "big is bad" must reckon with the extent to which the bigness in
question creates industry consolidation. Potential oligopoly is seen by most analysts and
economists as the major issue with "bigness." Oligopoly means loss of industry
competition, and it is therefore oligopoly that is rightly the target of antitrust law.
Interesting article cover quite a scope of time. Am an American Ex pat working in Canada.
In Canada to avoid total integration with the US aside from controlling the currency
Canada has very successful Oligopolies . I see that with the US airline Industry.
Oligopolies are mandated to work in concert with Government regulations, to retain their
protected status.Biggest example in Canada is the extremely successful 5 big Banks. Our
government doesn't have lawyers with the expertise to challenge the likes of Google,
Facebook, etc.
Antitrust laws aren't enforced because those corps. who are at fault pay generously for
campaigns to ensure they aren't enforced. Besides, the SCOTUS made rulings in the past
allowing monopolies, which is against the Constitution. But, the Constitution gets in the
way of business and profits, doesn't it?
Size isn't the determining factor. It's competition. You need at least 5 companies in a
product category to ensure that a pricing oligarchy won't be formed. I also agree on
breaking up companies horizontally to ensure that they can't create platform monopolies.
Competition is what drives innovation.
There he goes again! with the charge that Reagan was an unabashed union buster, by way of
what could be taken either as the classic push toward GOP monopolism, or nihilistic
competition, take your pick -- we are not clear what the administration stood for by way
of this article.
Just who would defend the behavior of the Teamsters, which earned
itself a forced trusteeship under NY attorney general Guiliani? Or PATCO, whose strike was
illegal under federal law, which warranted the right to fire airline staff? Much criticism
has been leveled against the reorganization of the trucking industry, whereby the
elimination of freight tariffs and also of the mandate to force deadhead backhauling did
lower wages and effectively bust union organizing. But this deregulation was actually
initiated under Carter, and it did have the longterm effect of enlarging national carriers
-- though that had not done Consolidated Freight much good in this century. Similarly, the
creation of CSX under Reagan only followed a huge history of consolidations, mergers, and
rail closures.
What of the villainous Robert Bork? In "The Antitrust Paradox", he raised the issue
that "mush language" attends many legal rationales for government action, such as the
notion that such and such action be "reasonable". We have heard all this again and again
in field after field of American jurisprudence, and there is no reason for conservatives
to disagree.
To this day, the granddaddy of bad antitrust law is the Leow's Theatre case. Had the
chain simply been allowed to keep both its theaters and some of its block booking system,
provided that fair access, booking, and payment be provided to film production
competitors, the monopolism problem would have been solved. But rest assured, chain
theaters could not avoid a massive pruning in the 50's.
I find it ironic that for all our solicitude for trust busting, corrupt unions escape
scrutiny. The fact that they are largely organized along the lines of the former CPUSSR
(that was progress in 1934),have carte blanche in siphoning dark money into political
campaigns in contravention of most campaign laws, and have spent more effort colluding
with employers in back deals to stifle dissenters within truly independent union forces
than actually fighting corrupt corporate boards, says a lot.
Decline of neoliberalism in not a pretty picture. Whom the gods would destroy they first make mad. Greek version of this saying
which appers in Sophocles’ play Antigoneis more
precise: "evil appears as good in the minds of those whom god leads to destruction". Oscar Wilde — 'When the Gods wish to
punish us, they answer our prayers.'
The United States witnessed three mass shootings in one week recently in California, Texas, and Ohio. There have been more than 250
mass shootings so far in 2019, more than one a day. This year in America,
more than 33,000 shooting incidents have killed more than 8,700 people.
America is the richest country in the world, but it has more than half a million homeless and 28 million people without health
insurance – out of a population of around 325 million. The U.S. infant mortality rate places it 33rd out of wealthiest 36 nations.
... ... ...
People from other industrialized countries must think that the United States has simply gone insane. It is a nation of terrible extremes:
grotesque wealth and horrific poverty, brilliant minds and widespread ignorance, high rates of volunteerism and endemic violence.
America seems to be suffering from some kind of bipolar disorder with pockets of manic energy and large areas of deep depression.
It would be tempting to argue that America is only suffering from a bout of temporary insanity. But mass shootings, gross economic
inequality, and corruption didn't begin when Donald Trump became president. He has made matters worse, to be sure. But these trends
are longstanding.
So, why do Americans put up with such violence, economic inequality, and political nonsense?
... ... ...
Moreover, more than half of Americans
have never traveled to another country. One in ten hasn't even
gone outside the state in which he or she was born. Since most of the news about other countries is negative, Americans naturally
believe that life is more dangerous outside their borders. They haven't actually seen what it's like in other countries, so there's
no way for them to compare the craziness of life in America with life anywhere else.
Of course, plenty of countries experience considerable violence, economic inequality, and political corruption. But they are usually
not powerful industrialized nations.
In the 2019 Global Peace Index
, for instance, the United States ranks 128 th in the world, between South Africa and Saudi Arabia. Kosovo, Haiti, and
Bangladesh all rank higher than America. Part of the reason that the United States ranks so poorly is the amount of military violence
that the country inflicts around the world – through war, arms sales, and military bases. But the high homicide rate in the United
States also dragged its score down.
The GINI index measures a country's economic inequality. The United States,
according to OECD figures , is fourth
from the bottom of the wealthiest countries in the world. Only Chile, Turkey, and Mexico have greater income inequality after taxes
and transfers.
On corruption issues, the United States has generally been in the top twenty in terms of transparency. But in 2018, it
dropped six places to number 22 in the Transparency International
rankings. Here, the influence of the Trump administration has been significant. The problem is not ordinary corruption like bribery.
Rather, Trump is challenging the very foundations of the rule of law. He promised to "drain the swamp" of political influence-peddling
in Washington, DC. But he has only made the nation's capital swampier.
Individuals with mental disorders can seek professional help. They can take medications and enter psychotherapy. They can check
themselves into a hospital.
In my eyes the NWO has lost its stamina in its fight to conquer the world. They started
with the dismemberment of Yugoslavia during degenerate Clinton times and continued with the
so called Color Revolutions. That imitation of human being, General Clark, told us it will be
7 countries in 7 years. That would take care of the M.E. After two successes, Libya and Irak,
the Russians gave their ass in their hands in Syria.
Let's take a look at South America. In Brazil they deposed Rousef and installed that
nincampoop Bolsonaro. To me that victory has all the characteristics of Disney cartoon.
Venezouela now. It was January 2018 they told us they are going to invade to restore
democracy (here we laugh) and human rights (more laughter) and they are still invading. They
know if they ever dare the whole South America will be up in arms and that is too big of a
bite to chew.
Add to this a 24 trillion debt economy with 15% of the Americans homeless and their dream
just fizzled.
Mexico is humanistic and civilised and when something dear to them is threatened THEY RUN
AS ONE TO RING THE CHURCH BELLS. They will not only survive they will come out
victorious.
Some other time we will take a look at this monstrous attack against the white race in
Europe through engineered invasion of Afroasians. Planning and management of Soros. The scum
of the earth.
The Classical Economists soon noticed those at the top don't do anything economically
productive, but maintained themselves in luxury and leisure through the hard work of everyone
else.
They couldn't miss it as the European aristocracy never did a stroke of real work.
"The labour and time of the poor is in civilised countries sacrificed to the
maintaining of the rich in ease and luxury. The Landlord is maintained in idleness and luxury
by the labour of his tenants. The moneyed man is supported by his extractions from the
industrious merchant and the needy who are obliged to support him in ease by a return for the
use of his money. But every savage has the full fruits of his own labours; there are no
landlords, no usurers and no tax gatherers." Adam Smith
Economics was a big problem for the powerful vested interests of the 19th century and it
was always far too dangerous to be allowed to reveal the truth about the economy.
How can we protect those powerful vested interests at the top of society?
The early neoclassical economists hid the problems of rentier activity in the economy by
removing the difference between "earned" and "unearned" income and they conflated "land" with
"capital".
They took the focus off the cost of living that had been so important to the Classical
Economists to hide the effects of rentier activity in the economy.
The landowners, landlords and usurers were now just productive members of society
again.
William White (BIS, OECD) talks about how economics really changed over one hundred years
ago as classical economics was replaced by neoclassical economics.
He thinks we have been on the wrong path for one hundred years.
This was the old switcheroo.
Economics, the time line:
Classical economics – observations and deductions from the world of small state,
unregulated capitalism around them
Neoclassical economics – Where did that come from?
Keynesian economics – observations, deductions and fixes for the problems of
neoclassical economics
Neoclassical economics – Why is that back?
We thought small state, unregulated capitalism was something that it wasn't as our ideas
came from neoclassical economics, which has little connection with classical economics.
On bringing it back again, we had lost everything that had been learned in the 1930s and
1940s, by which time it had already demonstrated its flaws.
In the second half of the 20th century, the Mont Pelerin society developed the neoliberal
ideology from neoclassical economics, under the impression that capitalism was a
self-stabilising system that doesn't need regulation.
Their expectations were rather different from the small state, unregulated capitalism that
had been observed and documented by the Classical Economists in the 19th Century.
"The interest of the landlords is always opposed to the interest of every other class
in the community" Ricardo 1815 / Classical Economist
"But the rate of profit does not, like rent and wages, rise with the prosperity and
fall with the declension of the society. On the contrary, it is naturally low in rich and
high in poor countries, and it is always highest in the countries which are going fastest to
ruin." Adam Smith / Classical Economist
Their belief in the markets came from neoclassical economics, which doesn't consider the
elements that ensures markets don't reach stable equilibriums; debt and the money creation of
bank loans.
Richard Vague has studied many of those 19th century financial crises in his book "A Brief
History of Doom" and charts the rollercoaster progress of 19th century small state,
unregulated capitalism.
"Theoretically, neither deflation nor inflation ought to affect long-run growth or
employment. After a while, people and businesses get used to changing prices. If prices fall,
eventually so will wages, and the impact on profits, employment and purchasing power will be
neutral. Borrowers suffer during deflation because their debts are fixed in value, but
creditors benefit because the dollars they get back will buy more. For the economy as a
whole, deflation ought to be a wash."
What has Ben Bernanke got wrong?
He thinks banks are financial intermediaries.
Our knowledge of privately created money has been going backwards since 1856.
Credit creation theory -> fractional reserve theory -> financial intermediation
theory
I like the title. Also, this is one of those cases where the interviewer brings quite a
lot to the table as well as the author. An excellent introduction and a well
carried/developed near metaphor as in, nail on the is a head.
That was a logical thesis to investigate. It seems strange that it has remained out of
sight for so long until Mr. Vague's research and analysis.
The student debt in the USA is currently at $1.5 trillion. That is about 7% of GDP –
and growing. I wonder how this may affect the economy in the US going forward.
As Yogi Berra reminds us, "You can observe a lot by watching."
I don't think it has been "out of sight" so much as "in sight, but ignored". The relation
of private debt to economic downturns has been noticed by others. Irving Fisher in the 20th
Century, Steve Keen today come to mind.
The connection between "over-capacity" and "inability to service" may be new.
I would like to see analysis like this subjected to peer review; I think that there must
be at least a few journals sympathetic to heterodox approaches to economics that would give a
new synthesis like this a fair review process. Going "directly to the people" via popular
writing raises a small concern in my mind.
Steve Keen mathematized the Minsky Hypothesis. The results could be displayed in three
dimensions. The graphs showed that when private debt was included in the calculations, the
recession in 2007 was accurately predicted. Interestingly, there is a period of moderation
which is followed by a rapid crash. During this period of moderation Bernanke was saying that
all the indicators showed that the economy was in good shape. Of course he didn't consider
private debt.
Some points of discussion, I'm not mad if disproven:
: Is the 2.5 Quadrillion dollars in derivatives considered debt? Or is the ability to
create derivatives what drives the excess lending?
: Is the ability to generate excess debt a function of the fractional reserve system, and
thus mostly a benefit for robbers who own banks? The Templars couldn't generate excess debt,
they needed gold on hand to pay the notes, but wasn't there increased trade from their
system, and thus general benefit?
No.
The stupid sums on derivatives are notional principals, and usually grossed up. If I have a
swap with 10m notional with you, it could be worth anything (and most likely the only debt
exposure is any margin-call amount, which would be on 10m swap trivial), but would add 20m to
that dumb number.
I can easily enough generate almost any number for the notional principal w/o increasing
the risk to the system (for example by creating any number of equal-but-opposite trades
between two parties which have a netting agreement)
I can equally (a bit harder, as it requires some thinking) do a few "well placed"
derivatives with notionals in say few billions (but nicely levered) that can sink the whole
system.
No.
In a full reserve system there's no debt, hence no question of "excess debt". As an aside,
"fractional reserve system is a myth". Bank lending is constrained only by capital, not by
any reserves (cf number of banking systems that don't even have any rules on reserves).
I have not read Mr. Vague's book. However, I am curious as to whether he adds anything to
the work of Steve Keen, who predicted the 2007-09 financial crisis, and Hyman Minsky. See,
for example, Keen's "Can We Avoid Another Financial Crisis?" (2017).
Looks like a nice validation of Keen's (and Michael Hudson's) work. That's fine with me,
although a nod in their direction certainly looks warranted since private debt was what led
Keen to predict the Great Recession (and win the Revere Prize for doing so).
Hudson's work on ancient debt jubilees exactly parallels Vague's.
Debt is the only working time machine mankind invented. But the conservation-over-time
still holds.
Technically, for any individual, over their lifetime integral of (income + debt
destruction) >= integral(expenses+ debt creation) [I'm ignoring cases where debt can be
inherited]
So are we heading for a crisis? Right now I(income + debt destruction) < I(expenses +
debt creation) for a large number of indivduals over their lifetime. So unless their income
raises dramatically (expenses for them are often way less discretionary), yes we are, as the
debt destruction will have to compensate.
But to guess the timing – well, that very much depends on the aggregate of those
individuals.A trigger that would further reduce income or increase expense (across the
population) would make it more probable. A small but not sufficient increase in income
(across the population) would postpone it.
"The student debt in the USA is currently at $1.5 trillion."
Thanks to some skillful intervention with the somnolent Congress this debt cannot be
discharged in bankruptcy. That seems to fly in the face of Mr. Vague's conclusions while
redounding to the benefit of the rentier financial class.
@ John -- Please make everyone you know aware that Democrat candidate for president Joe
Biden holds a great deal of responsibility for student debt not being dischargeable in
bankruptcy. This is only one of his high crimes and misdemeanors. Don't let anyone
forget!
That's only one of many reasons that Biden should be defeated. Here's a really good
explanation of how he helped remove educational loans (nearly all of them, not only student
loans) from discharge in bankruptcy.
Biden also strongly supported the Iraq War preventing any opposition views to testify in
his committee. Also a strong supporter of NAFTA anf the TTTP. ( Trump will hammer on this if
he runs against Biden.) His cooperation with southern segregationists resulted in the unequal
drug penalties that fed the prison industrial complex he supported. He had mutiple committee
meeting to rail against black crime when it was expedient. He threw Anita Hill under the bus
and thus aided in putting Clarence Thomas on the Supreme Court. He says he's a union man as
he goes to Comcast, a union buster, for financial aid. He is known as a representative
working for the credit card companies. etc. What's not to like if you're a corporate
democrat?
Duh. That was exactly the purpose. That bankruptcy exempt law for student loans was passed
based upon falsehoods. Its actual purpose was to enslave the college educated youth (make
them debt slaves) so that they don't go on a rampage like they did in the 1960's and 70's
vis-a-vis the Vietnam War.
I think part of the problem is that we treat money as a store of value, as well as a
medium of exchange.
As a medium, it is a contract, with one side an asset and the other a debt, so in order to
store the asset, similar amounts of debt have to be created.
This results in a centripedial effect, as positive feedback draws the asset to the center of
the system, while negative feedback pushes the debt to the edges.
Since money and finance serve as the value circulation mechanism, this is like the heart
telling the hands and feet to go suck dirt, because they don't get any blood.
A medium and a store are distinct functions. Blood is a medium, fat is a store. Roads are a
medium, parking lots are a store.
As a medium, we own money like we own the section of road we are using, or the beer passing
through our bodies. It's functionality is in its fungibility.
If we store value in healthy communities, we wouldn't need banks to mediate every
relationship.
The irony of our individualistic culture, is it leaves us in our atomized cocoons, allowing
more effective top down control and a parasitic feedback mechanism. Sort of like The
Matrix.
good description of the way an ME and a SoV work against each other; I can never think
through what I'm sure is this very contradiction in terms. thanks.
Appears to build on the work of economists Hyman Minsky and Steve Keen. Not as concerned
with developments in "Asia" (China), as there seems to be a policy willingness there to
substitute state money for private sector debt, and to allow currency depreciation as an
adjustment mechanism for the implicit debt writedowns. The policy also plays into China's
exports-driven macro model. Similar to the US government and central bank "foaming the
runway" for the banks and large corporations in the aftermath of the 2008 financial
crisis.
Contemplating the role of compound interest in private sector debt growth in a period of
low economic growth. Recent rapid growth of leveraged loans and junk bonds to fund corporate
stock buybacks, negative real interest rates to push up financial asset and real estate
prices/collateral values, and a lax regulatory environment appear to support an intentional
policy of excessive growth in private sector debt. Whether the GFC is entirely in the
rearview mirror or is till unfolding in terms of ultimately leading to systemic change also
remains open IMO, although neoliberal policies remain firmly entrenched at this time.
The part about the financial sector, including housing, being the main components of US
"industrial policy" shows the country as whole isn't taking the first advice financial
advisors usually give for stability: DIVERSIFY ..
And yet again here is another book/article on the US economy that says nothing about
defense spending.
US Defense spending is not debt. The MMT discussions state that clearly.
One test for "debt" is a simple question: Who can demand the debt be paid?
In the case of USG spending, the only party who could "call the debt" is the USG, and a
single party cannot be both debtor and creditor on a debt, that is: cannot owe oneself
money.
Well all government spending is debt if it spends currency. The dollars are debt. Your
checking account is debt too to the bank. When you write a check, you're assigning a portion
of the bank's debt to the payee. Dollars are just checks made out to "cash" in fixed amounts.
They appear in the Fed's books a liability, too.
What are we owed for a dollar? Answer: relief from a dollar's worth of (inevitable) tax
liability.
Back to the original post: It's even ambiguous whether defense spending is consumption.
After all, the internet is a product of DARPA (the "D" is for "Defense"). Marianna Mazzucato
has a nice TED talk about government as innovator.
" In both cases, the result is about 16% growth to GDP over 15 years. But in the second
case, you don't have a financial crisis."
also in the second case there are not foreclosures and repossessions whereby concentrated
financial power confiscates what they sold so they can sell it again by the way where does
that activity (repos and foreclosures) go in the calculation of GDP
Gosh. Where has Mr. Vague been? If this isn't the understatement of the century, I don't
know what is. Even dear old Ordoliberal Wolfgang Schaeuble said right up front: "We are
overbanked." Steve Keen is still fighting with Krugman about the significance of private
debt. And to imply that we have an unspoken "industrial policy" that uses real estate to get
us out of a slow patch begs the question. It is not industrial policy, it is the blatant
chickenshit avoidance of industrial policy. But never mind all that, the sea change Mr. Vague
is avoiding is that industrial manufacturing is being drastically trimmed back, limited,
maybe even rationed by country for all we know. To forgive debts won't really cut it. Not
that we shouldn't do it. We should simply because debt service is nearly impossible these
days. We need to have massive fiscal infusions; money spent wisely to improve civilization
and save the environment. Please Mr. Vague. You're more like Mr. Vacuous.
" .industrial policy, even though it was largely unstated: namely, support for the
financial and real estate sectors"
I would add the agricultural sector to government supported industry.
The brother needs to have a look a Portland, Oregon. Overcapacity, a housing bubble and a
homeless crisis all at once. It's bound to crash. Yet there're so many boomers retiring from
the first wave of the Tech Era (the folks whose awesome ideas and disruption gave us
Dot-Bomb. So they've run up the price of beer in a town famous for craft brewing to
unaffordability. They never seem to pay the price.
Bush Junior tightened the Bankruptcy laws in his final term before the great recession. I
still don't think that was coincidence.
The smart people with all the money DO know this is how economics works, and execute their
strategies on their behalf accordingly. The rest of us, get the idiot's guide to the galaxy
to work with.
"Debt, the first 5000 years" by David Graeber is on my list of probably-good books that
I'm unlikely to get around to reading. Is that similar to this one?
Yves here. Quelle surprise! Economists engage in groupthink, which sounds a little less bad if you call it
"ideology".
By Mohsen Javdani, Associate Professor of Economics, University of British Columbia –
Okanagan Campus and Ha-Joon Chang, Professor, University of Cambridge. Originally published at the
Institute for New Economic Thinking website
Mainstream (neoclassical) economics has always put a strong emphasis on the positivist conception of the
discipline, characterizing economists and their views as objective, unbiased, and non-ideological. This is
still true today, even after the 2008 economic crisis exposed the discipline to criticisms for lack of open
debate, intolerance for pluralism, and narrow pedagogy.
[1]
Even
mainstream scholars who do not blatantly refuse to acknowledge the profession's shortcomings still resist
identifying ideological bias as one of the main culprits. They often favor other "micro" explanations, such
as individual incentives related to academic power, career advancement, and personal and editorial networks.
Economists of different traditions do not agree with this diagnosis, but their claims have been largely
ignored and the debate suppressed.
Acknowledging that ideology resides quite comfortably in our economics departments would have huge
intellectual implications, both theoretical and practical. In spite (or because?) of that, the matter has
never been directly subjected to empirical scrutiny.
In a
recent study
, we do just that. Using a well-known experimental "deception" technique embedded in an
online survey that involves just over 2400 economists from 19 countries, we fictitiously attribute the
source of 15 quotations to famous economists of different leanings. In other words, all participants
received identical statements to agree or disagree with, but source attribution was randomly changed
without the participants' knowledge
. The experiment provides clear evidence that ideological bias
strongly influences the ideas and judgements of economists. More specifically, we find that changing source
attributions from mainstream to less-/non-mainstream figures significantly reduces the respondents' reported
agreement with statements. Interestingly, this contradicts the image economists have of themselves, with 82%
of participants reporting that in evaluating a statement one should only pay attention to its content and
not to the views of its author.
Moreover, we find that our estimated ideological bias varies significantly by the personal
characteristics of economists in our sample. For example, economists' self-reported political orientation
strongly influences their ideological bias, with estimated bias going up as respondents' political views
move to the right. The estimated bias is also stronger among mainstream than among heterodox economists,
with macroeconomists exhibiting the strongest bias. Men also display more bias than women. Geographical
differences also play a major role, with less bias among economists in Africa, South America, and
Mediterranean countries like Italy, Portugal, and Spain. In addition, economists with undergraduate degrees
in economics or business/management tend to show stronger ideological biases.
We give more details about our methodology and findings in the following sections, but first let us
anticipate some of the conclusions and implications. Theoretically, the implications are upsetting for the
positivist methodology dominating the neoclassical economics. As
Boland (1991)
suggests, "[p]ositive economics is now so pervasive that every competing view has been virtually eclipsed."
Yet, the strong influence of ideological bias on views among economists that is evident in our empirical
results cannot be reconciled with it.
Practically, our results imply that it is crucial to adopt changes in the profession that protect
academic discourse, as well as the consumers of the economic ideas, from the damaging impacts of ideological
bias. In fact, there exists growing evidence that suggests value judgements and political orientation of
economists affect not just research (
Jelveh
et al. 2018
,
Saint-Paul
2018
), but also citation networks (
Önder
and Terviö 2015
), faculty hiring (
Terviö
2011
), as well as economists' positions on positive and normative issues related to public policy (e.g.
Beyer and Pühringer
2019
;
Fuchs, Krueger and
Poterba 1998
;
Mayer
2001
;
van
Dalen 2019
;
Van Gunten, Martin, and Teplitskiy 2016
). It is therefore not a long stretch to imagine that ideological
bias could play an important role in suppressing plurality, narrowing pedagogy, and delineating biased
research parameters in economics.
One important step that helps identify the appropriate changes necessary to minimize the influence of
ideological biases is to understand their roots.
As argued by prominent social scientists (e.g.
Althusser 1976
,
Foucault 1969
,
Popper 1955
,
Thompson 1997
), the main source of ideological bias is knowledge-based, influenced by the institutions
that produce discourses. Mainstream economics, as the dominant and most influential institution in
economics, propagates and shapes ideological views among economists through different channels.
Economics education, through which economic discourses are disseminated to students and future
economists, is one of these important channels. It affects the way students process information, identify
problems, and approach these problems in their research. Not surprisingly, this training may also affect the
policies they favor and the ideologies they adhere to. In fact, there already exists strong evidence that,
compared to various other disciplines, students in economics stand out in terms of views associated with
greed, corruption, selfishness, and willingness to free-ride (e.g.
Frank and Schulze 2000
,
Frank et al.
1993
and
1996
,
Frey et al. 1993
,
Marwell and Ames 1981
,
Rubinstein 2006
,
Want et al. 2012
).
[2]
Another important channel through which mainstream economics shapes ideological views among economists is
by shaping the social structures and norms in the profession. While social structures and norms exist in all
academic disciplines, economics seems to stand out in at least several respects, resulting in the
centralization of power and the creation of incentive mechanisms for research, which in turn hinder
plurality, encourage conformity, and adherence to the dominant (ideological) views.
Our own exposure to different parts of this social structure while working on this project has in fact
been an unpleasant yet eye-opening experience, and a testament to dominant biases in the discipline that
strongly impede critical thinking, new perspectives, and plurality. We have been threatened, accused, and
insulted for simply asking an important and legitimate question. We have also had first-hand experience with
the Top Five journals in economics and some of their (associate) editors' exertion of their strong
prejudiced views, which is often disguised under the vail of "inevitably subjective nature of editors'
decision-making process," which is supported by the absolute and unaccountable power that is at their
disposal. In some cases, the decision regarding our submission blatantly lacked professionalism and respect
for plurality of views.
Our world today is characterized by critical issues that economics has a lot to say about, such as
inequality, austerity, the future of work, and climate change. However, relying on one dominant discourse
which ignores or isolates alternative views will make the economics profession ill-equipped to engage in
balanced conversations regarding these issues. This also makes the consumers of economic ideas skeptical
about economists and the views and policies they advocate for. We believe that addressing the issue of
ideological bias in economics first requires economists to find out about their own biases. Persistent
denial of these biases is going to be more harmful than being aware of their presence and influence, even if
mainstream economists do not necessarily change their views. Moreover, the economics profession needs to
have an in-depth introspection and a real and open debate about the factors underpinning these biases,
including economics training and social structures within the discipline that centralize power, encourage
group thinking and conformity, dampen innovative thinking and creativity, and hinder plurality.
Experimental Design
Examining issues such as the impact of bias, prejudice, or discrimination on individual views and
decisions is very challenging, given the complex nature of these types of behaviour. This has given rise to
a field experimentation literature in economics that has relied on the use of deception -- for example, through
sending out fictitious resumes and applications, to examine the prevalence and consequences of
discrimination against different groups in the labor market.
[3]
We
take a similar approach, namely using fictitious source attributions, in order to investigate the effect of
ideological bias on economists (See Section 4 in our
online appendix
for a more detailed discussion on the use of deception in economics). More specifically,
we employ a randomized controlled experiment embedded in an online survey. Economists from 19 different
countries were invited to complete an online survey where they were asked to evaluate fifteen statements
from prominent economists on a wide range of topics. We received just over 2,400 responses, with the
majority of responses (around 92%) from academics with a PhD degree in economics. As reported in our
online appendix
, our sample includes a very diverse group of economists from a diverse set of
institutions. While all participants received identical statements in the same order, source attribution for
each statement was randomly changed
without the participants' knowledge
. For each statement,
participants either received the name of a mainstream economist as the source (Control Group), or an
ideologically different less-/non-mainstream economist (Treatment 1), or no source attribution (Treatment
2). See Table A8 in our
online appendix
for a complete list of statements and sources.
The Findings, in Detail
Our analysis of the experimental results reveals several important findings. First, examining the
probability of different agreement levels for each statement as well as their comparative degree of
consensus (using relative entropy index derived from information theory), we find evidence of clear dissent
among economists on the wide variety of topics evaluated (see Figure 1 below). Given that our statements
either deal with different elements of the mainstream economics paradigm -- including its methodology,
assumptions, and the sociology of the profession -- or issues related to economic policy, the significant
disagreement evident in our results highlights the lack of paradigmatic and policy consensus among
economists on evaluated issues.
Figure 1: Probability of different agreement levels – By statement
Note: See Table A8 in our
online appendix
for a complete list of statements and sources.
Second, we find evidence of a strong ideological bias among economists. More specifically, we find that
for a given statement, the agreement level is 7.3% (or 22% of a standard deviation) lower among economists
who were told that the statement was from a less-/non-mainstream source. Examining statements individually
also reveals that in all but three statements, agreement level drops significantly (both quantitatively and
statistically, ranging from 3.6% to 16.6%) when the source is less-/non-mainstream.
For example, when a statement criticizing "symbolic pseudo-mathematical methods of formalizing a system
of economic analysis" is attributed to its real source, John Maynard Keynes, instead of its fictitious
source, Kenneth Arrow, the agreement level among economists drops by 11.6%. Similarly, when a statement
criticizing intellectual monopoly (i.e. patent, copyright) is attributed to Richard Wolff, the American
Marxian economist at the University of Massachusetts, Amherst, instead of its real source, David Levine,
professor of economics at the Washington University in St. Louis, the agreement level drops by 6.6%.
Interestingly, these results stand in sharp contrast with the image economists project of themselves in
our survey. In an accompanying questionnaire that appears at the end of the survey, a strong majority of
participants (around 82%) agreed that in evaluating a statement, one should
only
pay attention to
its content, rather than its author. Only 18% of participants agreed that both the content of the statement
as well as the views of the author matter, and only a tiny minority (around 0.5%) reported the views of the
author should be the sole basis to evaluate a statement.
Third, we find that economists' self-reported political orientation strongly influences their views. More
specifically, our results suggest that
even when we focus on statements with mainstream sources
attributed to them
, there exists a very significant difference in average agreement level among
economists with different political orientations. For example, for a given statement, the average agreement
level among economists self-identified as left is 8.4% lower than those self-identified as far left. This
already large difference widens
consistently
as we move to the far right, reaching a difference of
19.6% between the far right and the far left, which is an increase of 133%. This strong effect of political
orientation on economists' evaluation of our statements, which does not change after controlling for a wide
set of observed characteristics, is another clear manifestation of ideological bias.
The effect of political orientation on economists' views is even more drastic when we examine how changes
in attributed sources affects economists with different political orientations. More specifically, for those
on the far left, altering the sources only reduces the average agreement level by 1.5%, which is less than
one-fourth of the overall effect of 7.3% we discussed before. However, moving from the far left to the far
right of the political orientation
consistently and significantly
increases the effect of changing
the source to a 13.3% reduction in agreement level, which is almost 8 times (780%) larger compared to the
far left. Interestingly, this is despite the fact that relative to the far left, those at the far right are
17.5% more likely to agree that in evaluating a statement one should only pay attention to its content.
Fourth, our results uncover striking differences by gender. More specifically, we find that the estimated
ideological bias is 44% larger among male economists as compared to their female counterparts, even after
controlling for potential gender differences in observed characteristics including political orientation and
political/economic typology. Moreover, our results highlight a startling difference between male and female
economists in their perception of gender problems in the profession. When faced with the statement "
Unlike
most other science and social science disciplines, economics has made little progress in closing its gender
gap over the last several decades. Given the field's prominence in determining public policy, this is a
serious issue. Whether explicit or more subtle, intentional or not, the hurdles that women face in economics
are very real.
", the agreement level was a whopping 26% higher among female economists than among their
male peers.
In addition, when participants were told that the statement was made by the left-wing British feminist
economist Diane Elson (rather than the real source, Carmen Reinhart, a mainstream economist at Harvard),
male economists showed ideological biases -- their agreement level fell by 5.8%. Interestingly, however, it
stayed unchanged for female economists. This seems to suggest that the gender problem in economics is so
severe that female economists, who exhibited ideological biases on many other issues (although less than did
their male colleagues), put aside their biases in this particular case and focused on the content of the
statement.
The discussion around the gender problem in economics has recently taken the center stage. During the
recent 2019 AEA meeting, and in one of the main panel discussions titled "How can economics solve its gender
problem?" several top female economists talked about their own struggles with the gender problem in
economics. In another panel discussion, Ben Bernanke, the current president of the AEA, suggested that the
discipline has "unfortunately, a reputation for hostility toward women ." This is following the appointment
of an Ad Hoc Committee by the Executive Committee of the AEA in April 2018 to explore "issues faced by women
[ ] to improve the professional climate for women and members of underrepresented groups." AEA also
conducted a climate survey recently to "provide more comprehensive information on the extent and nature of
these [gender] issues." It is well-understood that approaching and solving the gender problem in economics
first requires a similar understanding of the problem by both men and women. However, our results suggest
that unfortunately there exists a very significant divide between male and female economists in their
recognition of the problem.
Fifth, we find systematic and significant heterogeneity in our estimated effect of ideological bias by
country, area of research, country where PhD was completed, and undergraduate major, with some groups of
economists exhibiting little or no ideological bias and some others showing very strong bias.
For example, we find that economists with a PhD degree from Asia, Canada, Scandinavia, and the U.S.
exhibit the strongest ideological bias. On the opposite end we find that economists with PhD degrees from
South America, Africa, Italy, Spain, and Portugal exhibit the smallest ideological bias. Similarly, our
results suggest that there is the smallest ideological bias from economists whose main area of research is
history of thought, methodology, heterodox approaches; cultural economics, economic sociology, economic
anthropology, or economic development. On the other hand, we find that economists whose main area of
research is macroeconomics, public economics, international economics, and financial economics are among
those with the largest ideological bias.
We also find that undergraduate training in economics has a strong effect on our estimated effect of
ideological bias. We find that those economists with an undergraduate major in economics, or
business/management, exhibit the strongest bias, while those who studied law; history, language and
literature; or anthropology, sociology, and psychology show no ideological bias. These results are
consistent with the growing evidence that suggests economic training, either directly or indirectly, induces
ideological views in students (e.g.
Allgood
et al. 2012
,
Colander and Klamer 1987
,
Colander 2005
,
Rubinstein 2006
).
Discussion
Scholars hold different views on whether economics can be a "science" in the strict sense and be free
from ideological biases. However, perhaps it is possible to have a a consensus that the type of ideological
bias that could result in endorsing or denouncing an argument on the basis of (one's interpretation of) its
author's views rather than its substance is unhealthy and in conflict with scientific tenor and the
subject's scientific aspiration,
especially when the knowledge regarding rejected views is limited
.
Some economists might object that economists are human beings and therefore these biases are inevitable.
But economists cannot have their cake and eat it too! Once you admit the existence of ideological bias, the
widely-held view that "positive economics is, or can be, an 'objective' science, in precisely the same sense
as any of the physical sciences" (Friedman 1953) must be rejected.
Furthermore, the differences we find in the estimated effects across personal characteristics such as
gender, political orientation, country, and undergraduate major clearly suggest that there are ways to limit
those ideological effects, and ways to reinforce them.
Our finding that those with an undergraduate degree in economics exhibit the strongest ideological bias
highlights the importance of economic training in shaping ideological views. In doing so, our study
contributes to the literature on economic education, suggesting that ideology can be at least limited by
changes in the curricula at earlier stages.
Rubinstein (2006)
argues that "students who come to us to 'study economics' instead become experts in
mathematical manipulation" and that "their views on economic issues are influenced by the way we teach,
perhaps without them even realizing."
Stiglitz (2002)
also argues that "[economics as taught] in America's graduate schools bears testimony
to a triumph of ideology over science."
Economics teaching not only influences students' ideology in terms of academic practice but also in terms
of personal behavior.
Colander and Klamer (1987)
and
Colander (2005)
survey
graduate students at top-ranking graduate economic programs in the U.S. and find that, according to these
students, techniques are the key to success in graduate school, while understanding the economy and
knowledge about economic literature only help a little. This lack of depth in knowledge acquired, not only
in economics but in any discipline or among any group of people, makes individuals lean more easily on
ideology.
Frank et al. (1993)
similarly highlight the importance of economics training in shaping behavior among
students by criticizing the exposure of economics students to the self-interest model in economics where
"motives other than self-interest are peripheral to the main thrust of human endeavor, and we indulge them
at our peril." They also provide evidence that such exposure does have an impact on self-interested
behavior.
But education is not the only problem: social structures and norms within the profession also deeply
influence economists' adherence to dominant ideological views.
For example, in his comprehensive analysis of pluralism in economics,
Wright (2019)
highlights several features of the discipline that make the internal hierarchical system in economics
"steeper and more consequential" compared to most other academic disciplines. These features include: (1)
particular significance of journal ranking, especially the Top Five, in various key aspects of academic life
including receiving tenure (
Heckman
and Moktan 2018)
, securing research grants, invitation to seminars and conferences, and request for
professional advice; (2) dominant role of "stars" in the discipline (
Goyal
et al. 2006
,
Offer and Söderberg 2016
); (3) governance of the discipline by a narrow group of economists (
Fourcade
et al. 2015
); (4) strong dominance of both editorial positions and publications in high-prestige
journals by economists at highly ranked institutions (
Colussi
2018
,
Fourcade et al. 2015
,
Heckman & Moktan 2018
;
Wu
2007
); and the strong effect of the ranking of one's institution, as a student or as an academic, in
career success (
Han
2003
,
Oyer 2006
).
As another example, in a
2013 interview
with the World Economic Association, Dani Rodrik highlights the role of social structure
in economics by suggesting that "there are powerful forces having to do with the sociology of the profession
and the socialization process that tend to push economists to think alike. Most economists start graduate
school not having spent much time thinking about social problems or having studied much else besides math
and economics. The incentive and hierarchy systems tend to reward those with the technical skills rather
than interesting questions or research agendas. An in-group versus out-group mentality develops rather early
on that pits economists against other social scientists." Interestingly, a very similar picture of the
profession was painted in 1973 by Axel Leijonhufvud in his light-hearted yet insightful article titled "
The
life among the Econ
."
It is hard to imagine that the biased reactions we find in our study only emerge in a low-stakes
environment, such as our experiment, without spilling over to other areas of academic life. After all, as we
discussed at the beginning, there already exists growing evidence which suggests that the political leanings
and the personal values of economists influence different aspects of their academic lives. It is also not a
long stretch to imagine that such ideological biases impede economists' engagement with alternative views,
narrow the pedagogy, and delineate biased research parameters. We believe that recognizing their own biases,
especially when there exists evidence suggesting that they could operate through implicit or unconscious
modes, is the first step for economists who strive to be objective and ideology-free. This is also
consistent with the standard to which most economists in our study hold themselves. To echo the words of
Alice Rivlin in her 1987 American Economic Association presidential address, "economists need to be more
careful to sort out, for ourselves and others, what we really know from our ideological biases."
Notes
[1]
Several scholars have highlighted the connection between ideological views and the lack of plurality
in economics and the failure of the profession to predict the 2008 crisis, or to even have an honest and
in-depth retrospective explanation that would help develop accountable counter-measures against future
crises (e.g.
Barry
2017
;
Cassidy 2009
;
Dow 2012
;
Freeman 2010
;
Heise
2016
;
Lawson 2009
;
Stilwell 2019
). There are also those who believe the 2008 crisis was not predictable, but fault the
profession, as
Colander (2010)
puts it, "for failing to develop and analyze models that, at least, had the possibility
of such a failure occurring" (e.g.
Cabalerro
2010
;
Colander et al. 2013
).
[2]
Even if this relationship is not strictly casual, it suggests that there exists something about
economic education that leads to a disproportionate self-selection of such students into economics.
20 years ago Dr Sam Tsemberis conducted a double-blind trial of chronically homeless mentally ill people
in an effort to learn whether being housed first led to better medical outcomes then placing barriers of
compliance before getting housed would produce.
Happily, the common sense proposition that having a secure roof improves people's health or medication
adherence was proven, and the concept of Housing First as a best practice is accepted today.
Economics is always political economy no matter how hard they try to pretend its algebra.
If ideology is dead then good riddance to it. I have seen and read about too many ideologues that have
caused massive damage and deaths over the centuries and economics is no different. Personally I am of the
school of thought of doing things in an empirical way and ignoring labels but just seeing what works. If it
works, adopt it. If it does not, try something else. The economics of today does not do that. It does not
work. It never saw the 2008 crisis coming and it has never proposed and backed reforms so that it will not
happen again. It is used to justify a world economy that is causing climate change as it refuses to include
most factors into their equations. I find it fascinating too how modern economics makes use of labels to
stop discussions of possible paths to explore. Ideological labels has itself proven a huge hindrance. Here
is what I mean.
"We should have health care for all."
"That is socialism that!"
"Well I guess that we can't do that then!
I think that Blair Fix's article "No, Productivity Does Not Explain Income" (
https://www.nakedcapitalism.com/2019/08/no-productivity-does-not-explain-income.html
)
shows you how modern economists work. You juggle around processes like you do mathematical formulas and
expect that it still reflects the real world. In scientific discussion you throw out a theory in a journal.
Ideally it should be reproducible in the real world and should be picked apart for any flaws in data or
reasoning. But like in Blair Fix's article. the outcome is designated first and then you work you way back
to justify it. It fails blind tests like mentioned here which shows it's flawed processes. In Washington DC
there is the Victims of Communism Memorial but I do think that there should also be a Victims of
Neoliberalism Memorial to reflect current economic thought. In the former there is the Goddess of Democracy
statue as a centerpiece. For a statue for the Victims of Neoliberalism I would suggest another statue but
based on the acronym BOHICA.
The more you see yourself as beyond ideology, the more likely it is that you are a victim of ideology.
That's what the post shows: it's the very fields such as business management that see themselves as
non-ideological, "common sense" and empirical which are the most ideological, least common sense and
least empirical.
If you are aware of your bias, you can minimize (but not eliminate) those affects. But if you believe
that you have *perfect* vision, no measurement can show you that you have an astigmatism.
Remember, Obama and Merkel see themselves as pragmatists -- but an objective observer can be assured of
finding deep ideological biases and assumption underlying their thought process.
aye.
the position of Ignorance .Socratic Perplexity is hard.
but i reckon it' the only way to avoid the mental traps this talks about.
I'm the only one i know in meatspace that even attempts to begin an investigation there("I know that i
don't know").
the idea that economics is just like Physics was always suspect, and i think it's pretty amazing that
it's taken this long and this many economic disasters to get to the point that the idea of econ=hard
science is challenged more or less in the open.
I'd add to this that i figure that the break in Philosophy, early in the last century, between
Anglo-American and "Continental" probably precedes and enables this strange phenomena in
economics(logical positivism, etc avoiding all that messy humanity attempting to shoehorn everything
into a neat equation)
there's a similar phenomenon in a lot of the Humanities anthropology, for instance: taking into
account the inherent and largely unconscious bias of the anthropologist embedded with the "savages"
he's studying.
"Orthodoxy is Unconsciousness"-Orwell
A general observation: Economics without ideology or politics is only a rather peculiar way of using
math. Without a reference what positive or negative actually means it is impossible to render jugdement or
make policy. While economic outcomes are at the same time always political outcomes and vice versa. That is
why the discipline used to call itself political economy.
About the experiment: If I understand it correctly all participants receive the questions only once. How
then is it possible to attribute a specific answer towards bias regarding the source? Given that the
questions are not of a clear 2+2=4 varietiy but at least somewhat open. Intuitively it seems far more likely
that the specific answer is determined by the respondents own beliefs than by their bias regarding the
source.
"The willingness to indulge in ideological thinking -- that is, in thinking that by definition is not one's
own, which is blind to experience and to the contradictions that arise when broader fields of knowledge are
consulted -- is a capitulation no one should ever make. It is a betrayal of our magnificent minds and of all
the splendid resources our culture has prepared for their use."
Robinson, Marilynne.
What Are We Doing Here?
(p. 2). Farrar, Straus and Giroux. Kindle Edition.
Towards the end of my final year of econ education I pointed out to a professor that the claim that
economics should be a positive science, as opposed to a normative one, was itself a normative claim and
hence self-contradictory. He looked at me like I was a crazy person and he was one of the 'leftists' in the
department.
Haha are you sure that the source of "crazy person" look was your view itself, or rather was it that
in your young naivete you spoke what anybody who needs to put food on the table as a working economist
would not dare?
I had a similar experience, diptherio. It was at the beginning of semester picnic, and one of the
profs was holding forth on how the mathematical and analytical methodology would allow us to find the
solutions to business questions. Probably because I had drunk too much wine, I piped up, but don't we
first have to define what are the critical questions? Deafening silence.
It is crazy, is it not, that "Life among the Econ" is still locked behind a paywall, despite being
written 46 years ago. Thankfully, there is sci-hub .
Reminds me of my counselor journey when therapist became aware of the blinders and prejudices that one's
theories of behavior imposed (good & bad) on clients. The admonition became, "don't marry your theory" which
another fellow revised that to "it's best only to flirt with your theory."
A friend of mine was an IT Director for a large Insurance company. After the crash in '08, he said in one
meeting an executive said "you know why we employ Economists, to lend credibility to the Astrologers"
The fact that this article has a reason to exist at all shows how poorly educated our highly trained
economists are. It's not just that they reject the better portion of the core concepts and practices of the
humanities and social sciences as being somewhere between useless and harmful. It's also that, as this
article illustrates without quite saying, pretenses aside, most economists are worse than clueless with
regards to the basics of conducting research in the "hard" sciences.
For family blog's sake, they don't even know how to pretend to be scientists. I'm not practicing
researcher, but I know enough about research methods and questions to be pretty sure that robust empirical
positivist economic research should look a lot more like something from the medical sciences than like
something out of a cut rate theoretical physics or math journal. That would have serious epistemological
problems of it's own, but sheesh, at least it might be mildly convincing to people with a modicum of a
liberal arts education who couldn't be bothered to look under the hood.
The only thing that shocks me more than the shoddyness of work from "superstar" economists is their
undying faith that their methods make them experts not just on economics, but on basically anything that you
can slap a mathematical model on.
What economics lacks is an arbiter. In the physical sciences, nature will bitch slap anyone getting out
of line. Economists need to come up with an agreed-upon set of test or natural experiments or something that
constitutes independent feedback on the merit of an idea. There is nothing more important for the future of
the discipline than this.
Well, the historical data refutes the Phillip's Curve but I bet they still teach that. 2008 was a
natural experiment that refuted the Efficient Market Hypothesis, as well as the idea that the Federal
Reserve could stop a major economic catastrophe through monkeying with interest rates but I'm sure those
things are still being taught. Which is to say that economics does not lack an arbiter -- rather, most
economists simply refuse to give it any credence.
Given that theories in economics are not testable, an application of group think would result in
"everybody was predicting that," and the consequent "who could have know" blame avoidance, coupled with the
economist selecting the analytic method that best confirmed the answers the management wanted.
The only thing missing is a display of the set of Chrystal Balls.
Do Economists speak truth to power, or just confirm what power wants?
the rest of the social scientists at least test their theories against these standards (or make an
appearance of doing so). econ seems to get around them by use of "definitions" so specific that in the end
they are describing tautologies.
An interesting study to supplement this one is of funding sources for economics departments and the
extent to which the funding is tied to hiring and model building. Then reanalize the date in this study for
correlations with the influence of funding sources.
"... Now one can probably understand Russiagate (among other things) as both of "Hail Mary" pass to unify those two factions on the base of common external enemy (Russophobia or, better, Russophenia does represent the lowest common denominator between two parties), as well as the attempt to misdirect people away from the fact that Trump's election represents an irreconcilable split in the US elite. ..."
"... Trump faction which can roughly be described as one related to extractive and heavy manufacturing industries (energy, agriculture, mining, construction, steel, aluminum industries, etc.) went to war against FIRE sector, media and tech sectors. Currently they are undergunned and undermanned: MSM and intelligence agencies control is in the hands of the New Class. "Trumpists" can rely only on military intelligence and some MSM outlets (Fox). Moreover Trump himself was quickly neutered and now represents a shadow (or caricature) of former, election time, self. ..."
"... Also "Trumpists" have the intensity and ferocity of people who fight for the right cause (or at least against well-defined enemy -- classic neoliberalism), which is lacking in "classic neoliberals" camp. They also have (temporary and tactical) support of the resurgent nationalist movement. The latter is the natural result of more then 40 year on neoliberal domination (if we count from Carter, who and not Reagan was the first neoliberal president and who started Wall Street deregulation.) ..."
"... That's why the color revolution was launched against Trump camp (nothing personal here, just business) by Dems who represent those three sectors politically. They do not want to lose political power. Which is completely understandable, but let then eat cakes does not work. ..."
"Speaker Nancy Pelosi (D-Calif.) on Wednesday called Senate Majority Leader Mitch
McConnell (R-Ky.) "Moscow Mitch" while attacking him for blocking House Democrats'
legislation, including election security measures."...
I like "Moscow Mitch" nickname. It reflects that depth of the split between two factions of
the US elite. The equivalent for Pelosi would probably be to call her "Insurance industry
prostitute." That means war propaganda mode: anybody who does not fully conform to the
classic neoliberal dogma is now Russian stooge and anti-Semite (attack on Corbin and his
faction in the UK)
Now one can probably understand Russiagate (among other things) as both of "Hail Mary"
pass to unify those two factions on the base of common external enemy (Russophobia or,
better, Russophenia does represent the lowest common denominator between two parties), as
well as the attempt to misdirect people away from the fact that Trump's election represents
an irreconcilable split in the US elite.
Trump faction which can roughly be described as one related to extractive and heavy
manufacturing industries (energy, agriculture, mining, construction, steel, aluminum
industries, etc.) went to war against FIRE sector, media and tech sectors. Currently they are
undergunned and undermanned: MSM and intelligence agencies control is in the hands of the New
Class. "Trumpists" can rely only on military intelligence and some MSM outlets (Fox).
Moreover Trump himself was quickly neutered and now represents a shadow (or caricature) of
former, election time, self.
But still he was able to unleash trade war with China which really hurt opposing faction
of the elite.
Also "Trumpists" have the intensity and ferocity of people who fight for the right
cause (or at least against well-defined enemy -- classic neoliberalism), which is lacking in
"classic neoliberals" camp. They also have (temporary and tactical) support of the resurgent
nationalist movement. The latter is the natural result of more then 40 year on neoliberal
domination (if we count from Carter, who and not Reagan was the first neoliberal president
and who started Wall Street deregulation.)
That's why the color revolution was launched against Trump camp (nothing personal
here, just business) by Dems who represent those three sectors politically. They do not want
to lose political power. Which is completely understandable, but let then eat cakes does not
work.
So the real danger for "Clintonists" now is that tech monopolies like Google will be split
and neutered and some investment banks who were too cozy to Clintons might soon have
problems.
In this sense it is prudent to view Elisabeth Warren with her anti-Wall Street stance as a
variation of Trump theme (Trump very quickly folded and became kind of parody on Obama).
Which means that she might have a chance.
I apologize for posting yet another crazy conspiracy story being spread by Trump Supporter
Media
...read this to see how truly crazy the Right Reality is...
Moscow Mitch fits right in with these loonies...'I know the truth, I'm protecting you,
THEY are out to get me, The truth will come out you'll see, it's a secret conspiracy of the
Left', yada, yada, yada
"James O’Keefe’s Google ‘Whistleblower’ Loves QAnon, Accused
‘Zionists’ of Running the Government"
'The former YouTube software engineer believes Google is now trying to “off”
him'
by Will Sommer...08.14.19...3:56PM ET
"Right-wing provocateur James O’Keefe published his latest video on tech giants on
Wednesday, touting an interview with former YouTube software engineer and self-proclaimed
“whistleblower” Zach Vorhies. In the video, Vorhies claims that Google’s
search algorithms are riddled with political bias, and touted a cache of internal Google
files he alleges prove his case.
Vorhies complains that Google doesn’t surface conspiracy theory websites like
InfoWars in one of its news search algorithms. He insists that his information is so valuable
that he has a credible fear that Google could be “trying to off me.”
“Some say that you’re a hero, some are going to say that you have extreme
moral courage,” O’Keefe told the former Googler in the video.
“I always thought that when the time came to do the right thing, in a big way, that
I would always be the one that stood up and did the right thing,” Vorhies replied.
What O’Keefe’s video leaves out, though, is that his much-hyped insider is not
as credible as he claims. On social media, Vorhies is an avid promoter of anti-Semitic
slanders that banks, the media, and the United States government are controlled by
“Zionists.” He’s also pushed conspiracy theories like QAnon, Pizzagate, and
the discredited claim that vaccines cause autism.
On Wednesday, O’Keefe defended Vorhies on Twitter. “Not every source is a
perfect angel,” he tweeted. “Good journalists know this is true.” Vorhies
and Google didn’t respond to requests for comment.
On his Twitter account, @Perpetualmaniac, Vorhies repeatedly attacks Jewish people and
accuses them of a wide range of crimes. (Both O’Keefe and his group, Project Veritas,
promoted Vorhies’s Twitter account in tweets on Monday.)
He even alleges that “Zionists” killed conservative publisher and
O’Keefe mentor Andrew Breitbart, who died of heart failure in 2012.
“It’s very simple, either you go along with the zionists or you end up like
Andrew Breitbart,” Vorhies wrote in January.
In a May tweet, Vorhies accused Israel of plotting the 9/11 attacks, and encouraged
Twitter users to look up 9/11-related conspiracy theory content, providing no evidence of his
claims.
“Israel and the zionist cabal planned 9/11 and its going to all come out,”
Vorhies wrote."..l.
The establishment just can’t handle it when people begin to figure things about neoliberalism out for themselves, so the
desperate attempts to control the narrative once again surface...
Notable quotes:
"... "This country is filled with a patronage network of well off established people including Democrats who believe everything's fine as it is and are willing to shut their eyes to what's not working – the financial crisis of the working class, the racism underlying the for profit prison system and immigration system, the horrific endless regime change wars and the massive deregulation of banks on Bill Clinton's watch and much more, including the Climate Crisis." ..."
"... Like the Wolfowitz explanation of the Iraq War, Russiagate is the idea around which varied interests can be organized. Cold Warriors like to hate on Russia. It justifies arms spending and their own importance. Clintonistas need an excuse to distract from her being a loser. The DNC needs an excuse for manipulating the candidate selection in favor of donor interests. "Moderates" need a distraction from their ongoing refusal to address the interests of voters. ..."
"... Each generation of Americans frets that they will be the ones who fritter the republic away. At least once every decade, it is the sad lot of some journalist to draw strained parallels between the state of the nation and the last days of the Roman Republic ..."
"... If anything "Russophobia" (Or Russophenia, to be exact) is the sign that the US neoliberal elite feels that it is losing the level of control they are accustomed since Carter. They are panicking and are ready to the slide of governance model from the current "inverted totalitarism" model toward a more repressive regime. ..."
"... Although the question whether the postwar democratic republic model of governance (with the New Deal as the cornerstone in the USA) is compatible with the existence of Wall Street oligarchy and powerful intelligence agencies which serve them as much if not more then the state was probably answered in November, 1963. ..."
Degradation of the elite is probably inevitable with the degradation of the social system
that ensured their rise -- neoliberalism.
As in Roman saying: "Those whom the gods would like to destroy they first make mad".
But the deep, existential crisis of neoliberalism is real and is not going away, no matter
how many times you chant Russia, Russia, Russia. Or China, China, China.
"This country is filled with a patronage network of well off established people including
Democrats who believe everything's fine as it is and are willing to shut their eyes to what's
not working – the financial crisis of the working class, the racism underlying the for
profit prison system and immigration system, the horrific endless regime change wars and the
massive deregulation of banks on Bill Clinton's watch and much more, including the Climate
Crisis."
And even more lemmings of the "rentier class" just check their account in Vanguard or
Fidelity and are satisfied when they are rising.
There are serious arguments in favor of viewing "Russophenia" as a defensive reaction on
the crisis on neoliberalism which provides an easy explanation of the country ills.
In this sense it is similar to the propaganda of Iraq war, which was also designed as the
kludge to cement cracks in the US society -- as in "war is the health of the state" (
although the desire to expropriate Iraq oil was strong too )
Like the Wolfowitz explanation of the Iraq War, Russiagate is the idea around which
varied interests can be organized. Cold Warriors like to hate on Russia. It justifies
arms spending and their own importance. Clintonistas need an excuse to distract from her
being a loser. The DNC needs an excuse for manipulating the candidate selection in favor
of donor interests. "Moderates" need a distraction from their ongoing refusal to address
the interests of voters.
"A republic, madam -- if you can keep it." That was supposedly Benjamin Franklin's reply to
a woman who asked him the result of the Constitutional Convention after it adjourned, in
1787.
Each generation of Americans frets that they will be the ones who fritter the republic away.
At least once every decade, it is the sad lot of some journalist to draw strained parallels
between the state of the nation and the last days of the Roman Republic. Since the election of
Donald Trump in 2016, this has become more like an annual ritual. ...
I am afraid that nothing, or very little is left to preserve.
If anything "Russophobia" (Or Russophenia, to be exact) is the sign that the US neoliberal
elite feels that it is losing the level of control they are accustomed since Carter. They are
panicking and are ready to the slide of governance model from the current "inverted
totalitarism" model toward a more repressive regime.
Witch hunts are always a sign of "tightening the screws" by the ruling elite.
Although the question whether the postwar democratic republic model of governance (with the
New Deal as the cornerstone in the USA) is compatible with the existence of Wall Street
oligarchy and powerful intelligence agencies which serve them as much if not more then the
state was probably answered in November, 1963.
Global market power and its macroeconomic implications
By Federico Diez, Daniel Leigh and Suchanan Tambunlertchai
The rise in the market power of large firms is assumed to affect economic activity, but
measuring either market power or its effects is challenging. Based on firm-level data for 74
countries, this column shows that market power has increased around the world, driven mostly
by 'superstar' firms. Higher markups are initially associated with increasing investment and
innovation, but the reverse is true when market power becomes too strong. The share of income
paid to workers also declines with rising market power.
Economy Adds 164,000 Jobs in July, Employment Rate Hits New High for Recovery
By Dean Baker
Total hours in manufacturing is down by 0.2 percent over the last year.
The Bureau of Labor Statistics reported that the economy added 164,000 jobs in July, with
the employment-to-population ratio (EPOP) inching up to 60.7 percent, a new high for the
recovery. The unemployment rate was unchanged at 3.7 percent. There were downward revisions
of 41,000 to the prior two months' data, bringing the average rate of job growth for the last
three months to 140,000.
The big job gainers in July were professional and technical services, which added 30,800
jobs, and health care, which added 30,400 jobs. The former is slightly above the 25,000
average of the last 12 months, while the latter is somewhat below the average of 33,800.
The goods-producing sector fared poorly in July. Mining and logging lost 5,000 jobs. Coal
mining was especially hard hit, losing 800 jobs, which is 1.5 percent of employment in the
industry. Construction added just 4,000 jobs, well below its average of 16,800 over the last
year.
Manufacturing added 16,000 jobs, slightly above its average gain of 13,100, but this was
accompanied by a decline of 0.3 hours in the length of the average workweek. The index of
aggregate hours in manufacturing is now down by 0.2 percent over the last year. For
production workers, it is down by 0.7 percent.
Manufacturing wages have also lagged. The average hourly wage is up just 2.5 percent over
the last year. With the decline in hours, the average weekly wage in manufacturing is up just
1.0 percent over the last year.
Restaurants added 15,400 jobs, down from an average of 21,100 over the last year. Hotel
employment fell by 5,200, possibly reflecting the drop in foreign tourism. Retail employment
fell 3,600, bringing its drop to 59,900 (0.4 percent of total employment) over the last
year.
Employment in insurance jumped 11,400 in July, compared to an average of just 2,800 over
the last year. There was also an anomalous jump in local education employment of 11,700,
likely reflecting changes in the timing of the school year.
Year-over-year wage growth was up slightly at 3.2 percent, but the annualized rate of wage
growth comparing the last three months (May, June, July) with prior three months (February,
March, April), is just 2.8 percent.
... ... ...
Involuntary part-time employment fell by 363,000 and is now well below its prerecession
share of employment. By contrast, voluntary part-time employment is lower in the first seven
months of 2019 than the year-round average for 2018. Voluntary part-time had jumped in 2014,
following the implementation of the ACA, as workers were no longer as dependent on employers
for health insurance. However, it is now falling as a share of total employment.
Another discouraging item is a drop of 0.9 percentage points in the share of unemployment
due to quits. The current 13.8 percent share is low given the 3.7 percent unemployment rate
and suggests workers are reluctant to quit jobs without a new job lined up.
On the whole, this is clearly a positive employment report. However, it does indicate job
growth is slowing and it is not clear that wage growth is picking up steam.
A legacy of 'free' trade deals, pitting US labor against slave labor abroad while the
profiteers stuck their windfall profits into tax havens offshore.
Lol, free trade my ass. US has been doing "free trade" since 1934. John, my advice, stop the
sheet. The entire goods part of the economy crested in 1979 and that has little to do with
trade, considering pre 1934 economy had vast inequality, even worse in some respect than now.
That is what happens when the rest of the world recovers from war. You either do free
trade and develop a financial stranglehold,, or socialize the means of production and consume
less.Your free lunch posts sicken me.
Nearly 23,000 people died by firearm suicide in 2016.
Gun homicides get far more attention in the popular press, but most gun deaths are the
result of suicide. In 2016, the last year for which the CDC provides numbers, 22,938 people
committed suicide by firearm, while 14,415 people died in gun homicides. ...
[ Thinking through this Brad DeLong post, I am left with the same feeling I had after
reading "The End of History" by Francis Fukuyama. History did not end with the division of
the Soviet Union and evidently neither did the Cold War since the United States from at least
as early as the presidency of George Bush was treating Russia as though the Cold War was
continuing and this continued with Obama and Trump and now China is being openly included
though this too can be traced easily back to the Clinton presidency.
DeLong is wrong, the Cold War is unfortunately not over and won. ]
IMHO both major parties in the Cold war lost and the USA is just another loser like now
defunct the USSR. It is China and Germany which won the Cold War, emerging as two major
economic (and in case of China political) powers.
The USSR was a theocratic state, a self-destructing utopia which nevertheless served a
very useful role -- as a protection mechanism against cannibalistic instincts of the USA
elite.
The key here is that after its dissolution the USA elite stated looting its own people.
Which they were afraid of doing while the USSR was present of the world arena.
But Bolshevism was dead after WWII and eventually Soviet Nomenklatura (and first of all
KGB brass) changed sides and adopted neoliberalism, privatizing the country resources. The
USA helped in this process (bribing considerable part of the elite and first of all Party and
KGB elite including some members of Politburo), but the writing was on the wall.
But after that the stupidity of the USA neoliberal elite ruled supreme. Instead of
cultivating former USSR as a strategic ally by adopting something like Marshall plan, a war
criminal and sex addict Bill Clinton pursued the short sited policy of trying to loot and
kick a Russia into the vassal state sowing the dragon's teeth.
Looting Russia after the dissolution (via Harvard mafia; http://www.softpanorama.org/Skeptics/Pseudoscience/harvard_mafia.shtml
) closed the opportunity of having strategic ally and eventually created a determined
adversary. Which will patiently wait when due to its own stupidity the USA will show the
vulnerable side and then strike.
And that alone is a huge geopolitical defeat of a war criminal (by Nuremberg standards
https://en.wikipedia.org/wiki/Nuremberg_principles)
Bill Clinton and his administration making him one of the most stupid and destructive USA
president in the country history.
He essentially adopted British empire stance toward Russia. Now we have emerging potential
alliance of Russia and China which complicates the efforts for the preservation of the
USA-centered global neoliberal empire. The USA no longer can dictate it will against this
alliance and that creates additional cracks in the empire façade visible in how EU
reacts to China tariffs and Iran sanctions.
The USA dominance will not evaporate in one year or even in a decade, but it is in decline
and now is really tested by China. Trump dysfunctional attempt to fight for the perseveration
of the empire on three fronts (against Russia, China and Iran) is not very successful, to say
the least.
And people whom he hired ( or who were hired by his handlers) are just a continuation of
the line of Cold War warriors from three previous administration (starting from unforgettable
Madeleine "not so bright" Albright). That's a real gallery of dinosaurs, if you ask me. Looks
like Washington elite lives in its own kingdom of illusions and this echo chamber became
completely disconnected with the reality. Attempt to push despicable and corrupt stooges of
neoliberal status quo like Kamala Harris as a Democratic Party candidate in 2020 is just
another manifestation of the same trend.
Also "neoliberal greed" (TM) destroyed the country manufacturing and without strong
manufacturing capabilities research capabilities are hampered.
For example, the USA neoliberals managed substantially undermine the USA lead in IT and
hardware.
Also using primarily financial instruments to ensure its dominance is a sign of the empire
in decline. The same it true about the existence of huge parasitic, rent oriented finance.
That also suggests that the dollar dominance can't last forever.
Much depends when the regime of "cheap oil" (let's say below $100 per barrel) ends. In any
case, even with $50-$60 oil the secular stagnation is fact of the USA economic life. People
just do not discuss it much anymore, but that's another strategic threat to neoliberalism and
to the USA-centered neoliberal empire. Attempt to grab Venezuela resources is a demonstration
that this treat is taken seriously.
As a side note, Neoliberalism as a social system, surprisingly managed to survive 2008
crisis largely intact converting itself into sudo-theocratic regime ( despite the fact that
ideology was destroyed). It also successfully counterattacked in Argentina, Brazil, and
France. Merkel, who is hard core neoliberal, managed to survive in Germany...
So it looks like it does have some staying power.
See "The Strange Non-Death of Neoliberalism" by Colin Crouch for an introduction to this
strange phenomenon.
Still with the collapse of neoliberal ideology (essentially Trotskyism for the rich) the
USA faces very uncertain future and supersized military expenses (essentially another form of
looting of common people) does not changed the precarious situation the USA elite got the
county. Neoliberal elite is not longer can rule as usual and the USA people want change. In
other words we have what Marxists used to call a "revolutionary situation". It very much
reminds me the USSR -- empire in 1970th with its stupid, degenerated and cannibalistic
elite.
[ This assertion by DeLong, then leaves me wondering what winning the Cold War then or now
would mean. We have, for instance, now arbitrarily set aside 2 Cold War nuclear arms treaties
since 2001, and are building more nuclear capability when we have weaponry enough to decimate
much of the earth, as does Russia.
Since Russia is now routinely considered a strategic adversary or threatening, we could
not of course have won the Cold War. We routinely accuse supposed political opponents of
being Russian sympathizers.
DeLong must be mistaken, unless there is a meaning of Cold War winning that is unclear to
me. ]
More damage from the white working class, this time at the state level.
"Meet The Right-Wing Consultant Who Goes From State To State Slashing Budgets
A few days after a powerful earthquake hit the state last November, Alaska Gov. Mike
Dunleavy (R) issued an order increasing the power of the state's budget office, led by a
woman who had lived in Alaska a mere two weeks at the time.
In her newly empowered role, Donna Arduin -- an infamous budget-slashing expert -- and
Dunleavy went on cut to hundreds of millions from the state budget. They aim to trim even
more in her second year in the remote state.
It's hardly Arduin's first rodeo. The budget consultant has served in several
Republican-led governor's offices, slashing state expenses while cutting or resisting efforts
to increase tax revenue.
She's also one of three leaders of the right-wing consulting firm Arduin Laffer &
Moore Econometrics. Her partners are "Trumponomics" co-authors Arthur Laffer, the
trickle-down economics evangelist, and Stephen Moore, who in May ruefully wished there was a
"statute of limitations on saying stupid things" so he could've had a shot at joining the
Federal Reserve Board.
Moore never made it to the Fed, but his and Laffer's histories as public figures offer
some insight into Arduin's typically more behind-the-scenes roles.
Laffer made his name as the "father of supply-side economics" during the Reagan years and
was just awarded a presidential medal of freedom. He was also one of the architects of former
Kansas Gov. Sam Brownback's so-called "Kansas experiment," a massive tax cut effort passed by
the state's Republican-dominated legislature in 2012. By 2017, the "experiment" had caused
such devastation in the state that the GOP-led legislature voted to hike taxes back up and
then overrode Brownback's veto. Moore also contributed to Brownback's failed plan.
A study from Laffer and Moore at the time lauding the potential effect of eliminating
Oklahoma's income tax was found to have "fundamental flaws" in its math, three leading
economists in the state found in separate papers. Each of the economists, the Oklahoma Policy
Institute wrote, "cautions strongly against using it as the basis for public policy
decisions."
"ince arriving in Alaska last year, Arduin has led the governor's attempt to cut a
whopping $1.6 billion in spending from education, social services, the arts, and nearly every
other corner of state government. Between legislative cuts and line-item vetoes, Dunleavy has
so far cut "almost $700 million" from the budget in his first year, Arduin said in an
interview earlier this month, despite a failed recent attempt by the legislature to override
his vetoes.
"We're about halfway solved," she said. "We're going to be looking towards reducing the
budget another $700 million next year."
The University of Alaska's Board of Regents, at a meeting in which they declared financial
exigency last week, sounded less enthusiastic. The institution has been "crippled," its
president said, by the governor cutting roughly 40% of the school's state funding -- over
$130 million. Thousands of students across the state found their state-funded scholarships
suddenly defunded with the school year looming. "We will not have a university after February
if we don't make a move," one regent noted.
Another Alaskan who had scheduled a dentures appointment four weeks after having his teeth
extracted was left with gums flapping in the wind, after the governor eliminated Medicaid
dental coverage for adults. That saved the state $27 million."
If one is prohibited for religious reasons from blaming the Democratic Party then the only
scapegoat left is the white working class voter. Racism is part and parcel to white working
class anger, but it is not the whole enchilada by a long shot. Perhaps the romanticism
surrounding "The Cause" and related notorious individuals such as formed the James Gang is
inappropriate, but that romanticism owes more to Bacon's Rebellion and the Whiskey Rebellion
than to the landing of the Isabella in Philadelphia in 1684. Not many of the Southern lads
that fought in the Civil War were even able to afford to have slaves. Even more ironically
many of those first slaves on the Isabella were bought by Quakers, later leading advocates of
emancipation after machines had made slaves obsolete for their purposes.
In the summer of 1970, Roger Ailes, then a consultant to then President Richard Nixon, in a
memo entitled "A Plan for Putting the GOP on TV News," wrote, "Today television news is
watched more often than people read newspapers, than people listen to the radio, than people
read or gather any other form of communication. The reason: People are lazy. With television
you just sit -- watch -- listen. The thinking is done for you." Ailes, as media consultant to
Reagan and Bush I, was there for the most effective: 'Southern Strategy'; via a protege,
'Willie Horton' ad; character assassination of Michael Dukakis; Fox News, with Roger Ailes as
CEO, was launched in 1996 by Rupert Murdoch to appeal to a conservative audience, and, to
offset the liberal bias of the other outlets.
American politics, the Southern strategy was a Republican Party electoral strategy to
increase political support among white voters in the South by appealing to racism against
African Americans.[1][2][3] As the civil rights movement and dismantling of Jim Crow laws in
the 1950s and 1960s visibly deepened existing racial tensions in much of the Southern United
States, Republican politicians such as presidential candidate Richard Nixon and Senator Barry
Goldwater developed strategies that successfully contributed to the political realignment of
many white, conservative voters in the South who had traditionally supported the Democratic
Party rather than the Republican Party. It also helped to push the Republican Party much more
to the right.[4]
The "Southern Strategy" refers primarily to "top down" narratives of the political
realignment of the South which suggest that Republican leaders consciously appealed to many
white Southerners' racial grievances in order to gain their support.[5] This top-down
narrative of the Southern Strategy is generally believed to be the primary force that
transformed Southern politics following the civil rights era.[6][7] This view has been
questioned by historians such as Matthew Lassiter, Kevin M. Kruse and Joseph Crespino, who
have presented an alternative, "bottom up" narrative, which Lassiter has called the "suburban
strategy". This narrative recognizes the centrality of racial backlash to the political
realignment of the South,[8] but suggests that this backlash took the form of a defense of de
facto segregation in the suburbs rather than overt resistance to racial integration and that
the story of this backlash is a national rather than a strictly Southern
one.[9][10][11][12]
The perception that the Republican Party had served as the "vehicle of white supremacy in
the South", particularly during the Goldwater campaign and the presidential elections of 1968
and 1972, made it difficult for the Republican Party to win back the support of black voters
in the South in later years.[4] In 2005, Republican National Committee chairman Ken Mehlman
formally apologized to the National Association for the Advancement of Colored People
(NAACP), a national civil rights organization, for exploiting racial polarization to win
elections and ignoring the black vote.[13][14]
Introduction
Although the phrase "Southern Strategy" is often attributed to Nixon's political
strategist Kevin Phillips, he did not originate it[15] but popularized it.[16] In an
interview included in a 1970 New York Times article, Phillips stated his analysis based on
studies of ethnic voting:
From now on, the Republicans are never going to get more than 10 to 20 percent of the Negro
vote and they don't need any more than that... but Republicans would be shortsighted if they
weakened enforcement of the Voting Rights Act. The more Negroes who register as Democrats in
the South, the sooner the Negrophobe whites will quit the Democrats and become Republicans.
That's where the votes are. Without that prodding from the blacks, the whites will backslide
into their old comfortable arrangement with the local Democrats.[1]
While Phillips sought to increase Republican power by polarizing ethnic voting in general,
and not just to win the white South, the South was by far the biggest prize yielded by his
approach. Its success began at the presidential level. Gradually, Southern voters began to
elect Republicans to Congress and finally to statewide and local offices, particularly as
some legacy segregationist Democrats retired or switched to the GOP.[who?] In addition, the
Republican Party worked for years to develop grassroots political organizations across the
South, supporting candidates for local school boards and city and county offices as examples,
but following the Watergate scandal Southern voters came out in support for the "favorite
son" candidate, Southern Democrat Jimmy Carter.
From 1948 to 1984, the Southern states, for decades a stronghold for the Democrats, became
key swing states, providing the popular vote margins in the 1960, 1968 and 1976 elections.
During this era, several Republican candidates expressed support for states' rights, a
reversal of the position held by southern states prior to the Civil War. Some political
analysts said this term was used in the 20th century as a "code word" to represent opposition
to federal enforcement of civil rights for blacks and to federal intervention on their
behalf; many individual southerners had opposed passage of the Voting Rights Act.[3]
*
[I love being schooled on this stuff as if I had not been there politically active
supporting MLK and SCLC at the time. I had never even heard of Roger Ailes until his
association with Rupert Murdoch. Of course that was because what mattered back then was
happening on the ground. There was no Internet whipping people up into a frenzied stupor, a
psychological condition of metaphorically being all dressed up with no where to go.
BTW, both narratives, i.e. top down and bottom up, were simultaneously correct and true.
It is simple minded to think in only one way and one dimension of thought at a time. Forces
aggregate and enough smaller vectors pushing in roughly the same direction will collectively
overcome a more powerful opposition that has ignored the coming forces.]
"...enough smaller vectors pushing in roughly the same direction will collectively overcome a
more powerful opposition that has ignored the coming forces.]"
[The story of the Democratic Party ever since Thomas Jefferson. Apparently the Democratic
Party invented naïve arrogance or at least patented it.]
"Thus we see how the neoliberal utopia tends to embody itself in the reality of a kind of infernal machine, whose necessity imposes
itself even upon the rulers. Like the Marxism of an earlier time, with which, in this regard, it has much in common, this utopia
evokes powerful belief - the free trade faith - not only among those who live off it, such as financiers, the owners and managers
of large corporations, etc., but also among those, such as high-level government officials and politicians, who derive their justification
for existing from it.
For they sanctify the power of markets in the name of economic efficiency, which requires the elimination of administrative or
political barriers capable of inconveniencing the owners of capital in their individual quest for the maximisation of individual
profit, which has been turned into a model of rationality. They want independent central banks.
And they preach the subordination of nation-states to the requirements of economic freedom for the masters of the economy, with
the suppression of any regulation of any market, beginning with the labour market, the prohibition of deficits and inflation, the
general privatisation of public services, and the reduction of public and social expenses."
Excellent article, I agree.
As regards clear language and definitions, I much prefer Michael Hudson's insistence that, to
the liberal economists, free markets were markets free from rent seeking, while to the
neoliberals free markets are free from government regulation.
"As governments were democratized, especially in the United States, liberals came to endorse
a policy of active public welfare spending and hence government intervention, especially on
behalf of the poor and disadvantaged. neoliberalism sought to restore the centralized
aristocratic and oligarchic rentier control of domestic politics." http://michael-hudson.com/2014/01/l-is-for-land/
– "Liberal"
Neoliberalism is an amazing ideological construct: secular religion designed for the rich. The level of brainwashing of
population under neoliberalism probably exceeds achievable in a long run under Bolshevism and Nazism.
Notable quotes:
"... Neoliberalism's premise is that free markets can regulate themselves; that government is inherently incompetent, captive to special interests, and an intrusion on the efficiency of the market; that in distributive terms, market outcomes are basically deserved; and that redistribution creates perverse incentives by punishing the economy's winners and rewarding its losers. So government should get out of the market's way. ..."
"... By the 1990s, even moderate liberals had been converted to the belief that social objectives can be achieved by harnessing the power of markets. Intermittent periods of governance by Democratic presidents slowed but did not reverse the slide to neoliberal policy and doctrine. The corporate wing of the Democratic Party approved. ..."
"... Now, after nearly half a century, the verdict is in. Virtually every one of these policies has failed, even on their own terms. Enterprise has been richly rewarded, taxes have been cut, and regulation reduced or privatized. The economy is vastly more unequal, yet economic growth is slower and more chaotic than during the era of managed capitalism. Deregulation has produced not salutary competition, but market concentration. Economic power has resulted in feedback loops of political power, in which elites make rules that bolster further concentration. ..."
"... The grand neoliberal experiment of the past 40 years has demonstrated that markets in fact do not regulate themselves. Managed markets turn out to be more equitable and more efficient. Yet the theory and practical influence of neoliberalism marches splendidly on, because it is so useful to society's most powerful people -- as a scholarly veneer to what would otherwise be a raw power grab. The British political economist Colin Crouch captured this anomaly in a book nicely titled The Strange Non-Death of Neoliberalism . Why did neoliberalism not die? As Crouch observed, neoliberalism failed both as theory and as policy, but succeeded superbly as power politics for economic elites. ..."
"... As the great political historian Karl Polanyi warned, when markets overwhelm society, ordinary people often turn to tyrants. In regimes that border on neofascist, klepto-capitalists get along just fine with dictators, undermining the neoliberal premise of capitalism and democracy as complements. Several authoritarian thugs, playing on tribal nationalism as the antidote to capitalist cosmopolitanism, are surprisingly popular. ..."
"... The theory of maximizing shareholder value was deployed to undermine the entire range of financial regulation and workers' rights. Cost-benefit analysis, emphasizing costs and discounting benefits, was used to discredit a good deal of health, safety, and environmental regulation. Public choice theory, associated with the economist James Buchanan and an entire ensuing school of economics and political science, was used to impeach democracy itself, on the premise that policies were hopelessly afflicted by "rent-seekers" and "free-riders." ..."
"... Human capital theory, another variant of neoliberal application of markets to partly social questions, justified deregulating labor markets and crushing labor unions. Unions supposedly used their power to get workers paid more than their market worth. Likewise minimum wage laws. But the era of depressed wages has actually seen a decline in rates of productivity growth. Conversely, does any serious person think that the inflated pay of the financial moguls who crashed the economy accurately reflects their contribution to economic activity? In the case of hedge funds and private equity, the high incomes of fund sponsors are the result of transfers of wealth and income from employees, other stakeholders, and operating companies to the fund managers, not the fruits of more efficient management. ..."
"... Financial deregulation is neoliberalism's most palpable deregulatory failure, but far from the only one. Electricity deregulation on balance has increased monopoly power and raised costs to consumers, but has failed to offer meaningful "shopping around" opportunities to bring down prices. We have gone from regulated monopolies with predictable earnings, costs, wages, and consumer protections to deregulated monopolies or oligopolies with substantial pricing power. Since the Bell breakup, the telephone system tells a similar story of re-concentration, dwindling competition, price-gouging, and union-bashing. ..."
"... As regards clear language and definitions, I much prefer Michael Hudson's insistence that, to the liberal economists, free markets were markets free from rent seeking, while to the neoliberals free markets are free from government regulation. ..."
"... In a political system where the reputedly "labor" party would rather lose with their bribe-taking warmongering Goldwater girl than win with a people's advocate, Houston we have a problem. ..."
"... "Growth for the sake of growth is the ideology of the cancer cell." ..."
"... Neoliberalism gave liberals an excuse to sell out in the name of "fresh thinking." Meanwhile the vast working class had become discredited Archie Bunkers in the eyes of the intellectuals after Vietnam and the Civil Rights struggles. ..."
"... I'd add two other consequences of neoliberalism. One is the increasing alienation of citizens from the mechanism for provision of the basic necessities of life. ..."
"... As Phillip Mirowski patiently explains in Never Let a Serious Crisis Go to Waste, neoliberalism is not laissez faire. Neoliberal desire a strong government to implement their market based nirvana, as long as they control government. ..."
Since the late 1970s, we've had a grand experiment to test the claim that free markets
really do work best. This resurrection occurred despite the practical failure of laissez-faire
in the 1930s, the resulting humiliation of free-market theory, and the contrasting success of
managed capitalism during the three-decade postwar boom.
Yet when growth faltered in the 1970s, libertarian economic theory got another turn at bat.
This revival proved extremely convenient for the conservatives who came to power in the 1980s.
The neoliberal counterrevolution, in theory and policy, has reversed or undermined nearly every
aspect of managed capitalism -- from progressive taxation, welfare transfers, and antitrust, to
the empowerment of workers and the regulation of banks and other major industries.
Neoliberalism's premise is that free markets can regulate themselves; that government is
inherently incompetent, captive to special interests, and an intrusion on the efficiency of the
market; that in distributive terms, market outcomes are basically deserved; and that
redistribution creates perverse incentives by punishing the economy's winners and rewarding its
losers. So government should get out of the market's way.
By the 1990s, even moderate liberals had been converted to the belief that social objectives
can be achieved by harnessing the power of markets. Intermittent periods of governance by
Democratic presidents slowed but did not reverse the slide to neoliberal policy and doctrine.
The corporate wing of the Democratic Party approved.
Now, after nearly half a century, the verdict is in. Virtually every one of these policies
has failed, even on their own terms. Enterprise has been richly rewarded, taxes have been cut,
and regulation reduced or privatized. The economy is vastly more unequal, yet economic growth
is slower and more chaotic than during the era of managed capitalism. Deregulation has produced
not salutary competition, but market concentration. Economic power has resulted in feedback
loops of political power, in which elites make rules that bolster further concentration.
The culprit isn't just "markets" -- some impersonal force that somehow got loose again. This
is a story of power using theory. The mixed economy was undone by economic elites, who revised
rules for their own benefit. They invested heavily in friendly theorists to bless this shift as
sound and necessary economics, and friendly politicians to put those theories into
practice.
Recent years have seen two spectacular cases of market mispricing with devastating
consequences: the near-depression of 2008 and irreversible climate change. The economic
collapse of 2008 was the result of the deregulation of finance. It cost the real U.S. economy
upwards of $15 trillion (and vastly more globally), depending on how you count, far more than
any conceivable efficiency gain that might be credited to financial innovation. Free-market
theory presumes that innovation is necessarily benign. But much of the financial engineering of
the deregulatory era was self-serving, opaque, and corrupt -- the opposite of an efficient and
transparent market.
The existential threat of global climate change reflects the incompetence of markets to
accurately price carbon and the escalating costs of pollution. The British economist Nicholas
Stern has aptly termed the worsening climate catastrophe history's greatest case of market
failure. Here again, this is not just the result of failed theory. The entrenched political
power of extractive industries and their political allies influences the rules and the market
price of carbon. This is less an invisible hand than a thumb on the scale. The premise of
efficient markets provides useful cover.
The grand neoliberal experiment of the past 40 years has demonstrated that markets in fact
do not regulate themselves. Managed markets turn out to be more equitable and more
efficient. Yet the theory and practical influence of neoliberalism marches splendidly on,
because it is so useful to society's most powerful people -- as a scholarly veneer to what
would otherwise be a raw power grab. The British political economist Colin Crouch captured this
anomaly in a book nicely titled The Strange Non-Death of Neoliberalism . Why did
neoliberalism not die? As Crouch observed, neoliberalism failed both as theory and as policy,
but succeeded superbly as power politics for economic elites.
The neoliberal ascendance has had another calamitous cost -- to democratic legitimacy. As
government ceased to buffer market forces, daily life has become more of a struggle for
ordinary people. The elements of a decent middle-class life are elusive -- reliable jobs and
careers, adequate pensions, secure medical care, affordable housing, and college that doesn't
require a lifetime of debt. Meanwhile, life has become ever sweeter for economic elites, whose
income and wealth have pulled away and whose loyalty to place, neighbor, and nation has become
more contingent and less reliable.
Large numbers of people, in turn, have given up on the promise of affirmative government,
and on democracy itself. After the Berlin Wall came down in 1989, ours was widely billed as an
era when triumphant liberal capitalism would march hand in hand with liberal democracy. But in
a few brief decades, the ostensibly secure regime of liberal democracy has collapsed in nation
after nation, with echoes of the 1930s.
As the great political historian Karl Polanyi warned, when markets overwhelm society,
ordinary people often turn to tyrants. In regimes that border on neofascist, klepto-capitalists
get along just fine with dictators, undermining the neoliberal premise of capitalism and
democracy as complements. Several authoritarian thugs, playing on tribal nationalism as the
antidote to capitalist cosmopolitanism, are surprisingly popular.
It's also important to appreciate that neoliberalism is not laissez-faire. Classically, the
premise of a "free market" is that government simply gets out of the way. This is nonsensical,
since all markets are creatures of rules, most fundamentally rules defining property, but also
rules defining credit, debt, and bankruptcy; rules defining patents, trademarks, and
copyrights; rules defining terms of labor; and so on. Even deregulation requires rules. In
Polanyi's words, "laissez-faire was planned."
The political question is who gets to make the rules, and for whose benefit. The
neoliberalism of Friedrich Hayek and Milton Friedman invoked free markets, but in practice the
neoliberal regime has promoted rules created by and for private owners of capital, to keep
democratic government from asserting rules of fair competition or countervailing social
interests. The regime has rules protecting pharmaceutical giants from the right of consumers to
import prescription drugs or to benefit from generics. The rules of competition and
intellectual property generally have been tilted to protect incumbents. Rules of bankruptcy
have been tilted in favor of creditors. Deceptive mortgages require elaborate rules, written by
the financial sector and then enforced by government. Patent rules have allowed agribusiness
and giant chemical companies like Monsanto to take over much of agriculture -- the opposite of
open markets. Industry has invented rules requiring employees and consumers to submit to
binding arbitration and to relinquish a range of statutory and common-law rights.
Neoliberalism as Theory, Policy, and Power
It's worth taking a moment to unpack the term "neoliberalism." The coinage can be confusing
to American ears because the "liberal" part refers not to the word's ordinary American usage,
meaning moderately left-of-center, but to classical economic liberalism otherwise known as
free-market economics. The "neo" part refers to the reassertion of the claim that the
laissez-faire model of the economy was basically correct after all.
Few proponents of these views embraced the term neoliberal . Mostly, they called
themselves free-market conservatives. "Neoliberal" was a coinage used mainly by their critics,
sometimes as a neutral descriptive term, sometimes as an epithet. The use became widespread in
the era of Margaret Thatcher and Ronald Reagan.
To add to the confusion, a different and partly overlapping usage was advanced in the 1970s
by the group around the Washington Monthly magazine. They used "neoliberal" to mean a
new, less statist form of American liberalism. Around the same time, the term
neoconservative was used as a self-description by former liberals who embraced
conservatism, on cultural, racial, economic, and foreign-policy grounds. Neoconservatives were
neoliberals in economics.
Beginning in the 1970s, resurrected free-market theory was interwoven with both conservative
politics and significant investments in the production of theorists and policy intellectuals.
This occurred not just in well-known conservative think tanks such as the American Enterprise
Institute, Heritage, Cato, and the Manhattan Institute, but through more insidious investments
in academia. Lavishly funded centers and tenured chairs were underwritten by the Olin, Scaife,
Bradley, and other far-right foundations to promote such variants of free-market theory as law
and economics, public choice, rational choice, cost-benefit analysis,
maximize-shareholder-value, and kindred schools of thought. These theories colonized several
academic disciplines. All were variations on the claim that markets worked and that government
should get out of the way.
Each of these bodies of sub-theory relied upon its own variant of neoliberal ideology. An
intensified version of the theory of comparative advantage was used not just to cut tariffs but
to use globalization as all-purpose deregulation. The theory of maximizing shareholder value
was deployed to undermine the entire range of financial regulation and workers' rights.
Cost-benefit analysis, emphasizing costs and discounting benefits, was used to discredit a good
deal of health, safety, and environmental regulation. Public choice theory, associated with the
economist James Buchanan and an entire ensuing school of economics and political science, was
used to impeach democracy itself, on the premise that policies were hopelessly afflicted by
"rent-seekers" and "free-riders."
Market failure was dismissed as a rare special case; government failure was said to be
ubiquitous. Theorists worked hand in glove with lobbyists and with public officials. But in
every major case where neoliberal theory generated policy, the result was political success and
economic failure.
For example, supply-side economics became the justification for tax cuts, on the premise
that taxes punished enterprise. Supposedly, if taxes were cut, especially taxes on capital and
on income from capital, the resulting spur to economic activity would be so potent that
deficits would be far less than predicted by "static" economic projections, and perhaps even
pay for themselves. There have been six rounds of this experiment, from the tax cuts sponsored
by Jimmy Carter in 1978 to the immense 2017 Tax Cuts and Jobs Act signed by Donald Trump. In
every case some economic stimulus did result, mainly from the Keynesian jolt to demand, but in
every case deficits increased significantly. Conservatives simply stopped caring about
deficits. The tax cuts were often inefficient as well as inequitable, since the loopholes
steered investment to tax-favored uses rather than the most economically logical ones. Dozens
of America's most profitable corporations paid no taxes.
Robert Bork's "antitrust paradox," holding that antitrust enforcement actually weakened
competition, was used as the doctrine to sideline the Sherman and Clayton Acts. Supposedly, if
government just got out of the way, market forces would remain more competitive because
monopoly pricing would invite innovation and new entrants to the market. In practice, industry
after industry became more heavily concentrated. Incumbents got in the habit of buying out
innovators or using their market power to crush them. This pattern is especially insidious in
the tech economy of platform monopolies, where giants that provide platforms, such as Google
and Amazon, use their market power and superior access to customer data to out-compete rivals
who use their platforms. Markets, once again, require rules beyond the benign competence of the
market actors themselves. Only democratic government can set equitable rules. And when
democracy falters, undemocratic governments in cahoots with corrupt private plutocrats will
make the rules.
Human capital theory, another variant of neoliberal application of markets to partly social
questions, justified deregulating labor markets and crushing labor unions. Unions supposedly
used their power to get workers paid more than their market worth. Likewise minimum wage laws.
But the era of depressed wages has actually seen a decline in rates of productivity growth.
Conversely, does any serious person think that the inflated pay of the financial moguls who
crashed the economy accurately reflects their contribution to economic activity? In the case of
hedge funds and private equity, the high incomes of fund sponsors are the result of transfers
of wealth and income from employees, other stakeholders, and operating companies to the fund
managers, not the fruits of more efficient management.
There is a broad literature discrediting this body of pseudo-scholarly work in great detail.
Much of neoliberalism represents the ever-reliable victory of assumption over evidence. Yet
neoliberal theory lived on because it was so convenient for elites, and because of the inertial
power of the intellectual capital that had been created. The well-funded neoliberal habitat has
provided comfortable careers for two generations of scholars and pseudo-scholars who migrate
between academia, think tanks, K Street, op-ed pages, government, Wall Street, and back again.
So even if the theory has been demolished both by scholarly rebuttal and by events, it thrives
in powerful institutions and among their political allies.
The Practical Failure of Neoliberal Policies
Financial deregulation is neoliberalism's most palpable deregulatory failure, but far from
the only one. Electricity deregulation on balance has increased monopoly power and raised costs
to consumers, but has failed to offer meaningful "shopping around" opportunities to bring down
prices. We have gone from regulated monopolies with predictable earnings, costs, wages, and
consumer protections to deregulated monopolies or oligopolies with substantial pricing power.
Since the Bell breakup, the telephone system tells a similar story of re-concentration,
dwindling competition, price-gouging, and union-bashing.
Air travel has been a poster child for advocates of deregulation, but the actual record is
mixed at best. Airline deregulation produced serial bankruptcies of every major U.S. airline,
often at the cost of worker pay and pension funds. Ticket prices have declined on average over
the past two decades, but the traveling public suffers from a crazy quilt of fares, declining
service, shrinking seats and legroom, and exorbitant penalties for the perfectly normal sin of
having to change plans. Studies have shown that fares actually declined at a faster rate in the
20 years before deregulation in 1978 than in the 20 years afterward, because the prime source
of greater efficiency in airline travel is the introduction of more fuel-efficient planes. The
roller-coaster experience of airline profits and losses has reduced the capacity of airlines to
purchase more fuel-efficient aircraft, and the average age of the fleet keeps increasing. The
use of "fortress hubs" to defend market pricing power has reduced the percentage of nonstop
flights, the most efficient way to fly from one point to another.
In addition to deregulation, three prime areas of practical neoliberal policies are the use
of vouchers as "market-like" means to social goals, the privatization of public services, and
the use of tax subsides rather than direct outlays. In every case, government revenues are
involved, so this is far from a free market to begin with. But the premise is that market
disciplines can achieve public purposes more efficiently than direct public provision.
The evidence provides small comfort for these claims. One core problem is that the programs
invariably give too much to the for-profit middlemen at the expense of the intended
beneficiaries. A related problem is that the process of using vouchers and contracts invites
corruption. It is a different form of "rent-seeking" -- pursuit of monopoly profits -- than
that attributed to government by public choice theorists, but corruption nonetheless. Often,
direct public provision is far more transparent and accountable than a web of contractors.
A further problem is that in practice there is often far less competition than imagined,
because of oligopoly power, vendor lock-in, and vendor political influence. These experiments
in marketization to serve social goals do not operate in some Platonic policy laboratory, where
the only objective is true market efficiency yoked to the public good. They operate in the
grubby world of practical politics, where the vendors are closely allied with conservative
politicians whose purposes may be to discredit social transfers entirely, or to reward
corporate allies, or to benefit from kickbacks either directly or as campaign
contributions.
Privatized prisons are a case in point. A few large, scandal-ridden companies have gotten
most of the contracts, often through political influence. Far from bringing better quality and
management efficiency, they have profited by diverting operating funds and worsening conditions
that were already deplorable, and finding new ways to charge inmates higher fees for necessary
services such as phone calls. To the extent that money was actually saved, most of the savings
came from reducing the pay and professionalism of guards, increasing overcrowding, and
decreasing already inadequate budgets for food and medical care.
A similar example is the privatization of transportation services such as highways and even
parking meters. In several Midwestern states, toll roads have been sold to private vendors. The
governor who makes the deal gains a temporary fiscal windfall, while drivers end up paying
higher tolls often for decades. Investment bankers who broker the deal also take their cut.
Some of the money does go into highway improvements, but that could have been done more
efficiently in the traditional way via direct public ownership and competitive bidding.
Housing vouchers substantially reward landlords who use the vouchers to fill empty houses
with poor people until the neighborhood gentrifies, at which point the owner is free to quit
the program and charge market rentals. Thus public funds are used to underwrite a privately
owned, quasi-social housing sector -- whose social character is only temporary. No permanent
social housing is produced despite the extensive public outlay. The companion use of tax
incentives to attract passive investment in affordable housing promotes economically
inefficient tax shelters, and shunts public funds into the pockets of the investors -- money
that might otherwise have gone directly to the housing.
The Affordable Care Act is a form of voucher. But the regulated private insurance markets in
the ACA have not fully lived up to their promise, in part because of the extensive market power
retained by private insurers and in part because the right has relentlessly sought to sabotage
the program -- another political feedback loop. The sponsors assumed that competition would
lower costs and increase consumer choice. But in too many counties, there are three or fewer
competing plans, and in some cases just one.
As more insurance plans and hospital systems become for-profit, massive investment goes into
such wasteful activities as manipulation of billing, "risk selection," and other gaming of the
rules. Our mixed-market system of health care requires massive regulation to work with
tolerable efficiency. In practice, this degenerates into an infinite regress of regulator
versus commercial profit-maximizer, reminiscent of Mad magazine's "Spy versus Spy," with
the industry doing end runs to Congress to further rig the rules. Straight-ahead public
insurance such as Medicare is generally far more efficient.
An extensive literature has demonstrated that for-profit voucher schools do no better and
often do worse than comparable public schools, and are vulnerable to multiple forms of gaming
and corruption. Proprietors of voucher schools are superb at finding ways of excluding costly
special-needs students, so that those costs are imposed on what remains of public schools; they
excel at gaming test results. While some voucher and charter schools, especially nonprofit
ones, sometimes improve on average school performance, so do many public schools. The record is
also muddied by the fact that many ostensibly nonprofit schools contract out management to
for-profit companies.
Tax preferences have long been used ostensibly to serve social goals. The Earned Income Tax
Credit is considered one of the more successful cases of using market-like measures -- in this
case a refundable tax credit -- to achieve the social goal of increasing worker take-home pay.
It has also been touted as the rare case of bipartisan collaboration. Liberals get more money
for workers. Conservatives get to reward the deserving poor, since the EITC is conditioned on
employment. Conservatives get a further ideological win, since the EITC is effectively a wage
subsidy from the government, but is experienced as a tax refund rather than a benefit of
government.
Recent research, however, shows that the EITC is primarily a subsidy of low-wage employers,
who are able to pay their workers a lot less than a market-clearing wage. In industries such as
nursing homes or warehouses, where many workers qualified for the EITC work side by side with
ones not eligible, the non-EITC workers get substandard wages. The existence of the EITC
depresses the level of the wages that have to come out of the employer's pocket.
Neoliberalism's Influence on Liberals
As free-market theory resurged, many moderate liberals embraced these policies. In the
inflationary 1970s, regulation became a scapegoat that supposedly deterred salutary price
competition. Some, such as economist Alfred Kahn, President Carter's adviser on deregulation,
supported deregulation on what he saw as the merits. Other moderates supported neoliberal
policies opportunistically, to curry favor with powerful industries and donors. Market-like
policies were also embraced by liberals as a tactical way to find common ground with
conservatives.
Several forms of deregulation -- of airlines, trucking, and electric power -- began not
under Reagan but under Carter. Financial deregulation took off under Bill Clinton. Democratic
presidents, as much as Republicans, promoted trade deals that undermined social standards.
Cost-benefit analysis by the Office of Information and Regulatory Affairs (OIRA) was more of a
choke point under Barack Obama than under George W. Bush.
"Command and control" became an all-purpose pejorative for disparaging perfectly sensible
and efficient regulation. "Market-like" became a fashionable concept, not just on the
free-market right but on the moderate left. Cass Sunstein, who served as Obama's
anti-regulation czar,uses the example of "nudges" as a more market-like and hence superior
alternative to direct regulation, though with rare exceptions their impact is trivial.
Moreover, nudges only work in tandem with regulation.
There are indeed some interventionist policies that use market incentives to serve social
goals. But contrary to free-market theory, the market-like incentives first require substantial
regulation and are not a substitute for it. A good example is the Clean Air Act Amendments of
1990, which used tradable emission rights to cut the output of sulfur dioxide, the cause of
acid rain. This was supported by both the George H.W. Bush administration and by leading
Democrats. But before the trading regime could work, Congress first had to establish
permissible ceilings on sulfur dioxide output -- pure command and control.
There are many other instances, such as nutrition labeling, truth-in-lending, and disclosure
of EPA gas mileage results, where the market-like premise of a better-informed consumer
complements command regulation but is no substitute for it. Nearly all of the increase in fuel
efficiency, for example, is the result of command regulations that require auto fleets to hit a
gas mileage target. The fact that EPA gas mileage figures are prominently disclosed on new car
stickers may have modest influence, but motor fuels are so underpriced that car companies have
success selling gas-guzzlers despite the consumer labeling.
Politically, whatever rationale there was for liberals to make common ground with
libertarians is now largely gone. The authors of the 2017 Tax Cuts and Jobs Act made no attempt
to meet Democrats partway; they excluded the opposition from the legislative process entirely.
This was opportunistic tax cutting for elites, pure and simple. The right today also abandoned
the quest for a middle ground on environmental policy, on anti-poverty policy, on health policy
-- on virtually everything. Neoliberal ideology did its historic job of weakening intellectual
and popular support for the proposition that affirmative government can better the lives of
citizens and that the Democratic Party is a reliable steward of that social compact. Since
Reagan, the right's embrace of the free market has evolved from partly principled idealism into
pure opportunism and obstruction.
Neoliberalism and Hyper-Globalism
The post-1990 rules of globalization, supported by conservatives and moderate liberals
alike, are the quintessence of neoliberalism. At Bretton Woods in 1944, the use of fixed
exchange rates and controls on speculative private capital, plus the creation of the IMFand
World Bank, were intended to allow member countries to practice national forms of managed
capitalism, insulated from the destructive and deflationary influences of short-term
speculative private capital flows. As doctrine and power shifted in the 1970s, the IMF, the
World Bank, and later the WTO, which replaced the old GATT, mutated into their ideological
opposite. Rather than instruments of support for mixed national economies, they became
enforcers of neoliberal policies.
The standard package of the "Washington Consensus" of approved policies for developing
nations included demands that they open their capital markets to speculative private finance,
as well as cutting taxes on capital, weakening social transfers, and gutting labor regulation
and public ownership. But private capital investment in poor countries proved to be fickle. The
result was often excessive inflows during the boom part of the cycle and punitive withdrawals
during the bust -- the opposite of the patient, long-term development capital that these
countries needed and that was provided by the World Bank of an earlier era. During the bust
phase, the IMFtypically imposes even more stringent neoliberal demands as the price of
financial bailouts, including perverse budgetary austerity, supposedly to restore the
confidence of the very speculative capital markets responsible for the boom-bust cycle.
Dozens of nations, from Latin America to East Asia, went through this cycle of boom, bust,
and then IMF pile-on. Greece is still suffering the impact. After 1990, hyper-globalism also
included trade treaties whose terms favored multinational corporations. Traditionally, trade
agreements had been mainly about reciprocal reductions of tariffs. Nations were free to have
whatever brand of regulation, public investment, or social policies they chose. With the advent
of the WTO, many policies other than tariffs were branded as trade distorting, even as takings
without compensation. Trade deals were used to give foreign capital free access and to
dismantle national regulation and public ownership. Special courts were created in which
foreign corporations and investors could do end runs around national authorities to challenge
regulation for impeding commerce.
At first, the sponsors of the new trade regime tried to claim the successful economies of
East Asia as evidence of the success of the neoliberal recipe. Supposedly, these nations had
succeeded by pursuing "export-led growth," exposing their domestic economies to salutary
competition. But these claims were soon exposed as the opposite of what had actually occurred.
In fact, Japan, South Korea, smaller Asian nations, and above all China had thrived by
rejecting every major tenet of neoliberalism. Their capital markets were tightly regulated and
insulated from foreign speculative capital. They developed world-class industries as state-led
cartels that favored domestic production and supply. East Asia got into trouble only when it
followed IMFdictates to throw open capital markets, and in the aftermath they recovered by
closing those markets and assembling war chests of hard currency so that they'd never again
have to go begging to the IMF. Enthusiasts of hyper-globalization also claimed that it
benefited poor countries by increasing export opportunities, but as the success of East Asia
shows, there is more than one way to boost exports -- and many poorer countries suffered under
the terms of the global neoliberal regime.
Nor was the damage confined to the developing world. As the work of Harvard economist Dani
Rodrik has demonstrated, democracy requires a polity. For better or for worse, the polity and
democratic citizenship are national. By enhancing the global market at the expense of the
democratic state, the current brand of hyper-globalization deliberately weakens the capacity of
states to regulate markets, and weakens democracy itself.
When Do Markets Work?
The failure of neoliberalism as economic and social policy does not mean that markets never
work. A command economy is even more utopian and perverse than a neoliberal one. The practical
quest is for an efficient and equitable middle ground.
The neoliberal story of how the economy operates assumes a largely frictionless marketplace,
where prices are set by supply and demand, and the price mechanism allocates resources to their
optimal use in the economy as a whole. For this discipline to work as advertised, however,
there can be no market power, competition must be plentiful, sellers and buyers must have
roughly equal information, and there can be no significant externalities. Much of the 20th
century was practical proof that these conditions did not describe a good part of the actual
economy. And if markets priced things wrong, the market system did not aggregate to an
efficient equilibrium, and depressions could become self-deepening. As Keynes demonstrated,
only a massive jolt of government spending could restart the engines, even if market pricing
was partly violated in the process.
Nonetheless, in many sectors of the economy, the process of buying and selling is close
enough to the textbook conditions of perfect competition that the price system works tolerably
well. Supermarkets, for instance, deliver roughly accurate prices because of the consumer's
freedom and knowledge to shop around. Likewise much of retailing. However, when we get into
major realms of the economy with positive or negative externalities, such as education and
health, markets are not sufficient. And in other major realms, such as pharmaceuticals, where
corporations use their political power to rig the terms of patents, the market doesn't produce
a cure.
The basic argument of neoliberalism can fit on a bumper sticker. Markets work;
governments don't . If you want to embellish that story, there are two corollaries: Markets
embody human freedom. And with markets, people basically get what they deserve; to alter market
outcomes is to spoil the poor and punish the productive. That conclusion logically flows from
the premise that markets are efficient. Milton Friedman became rich, famous, and influential by
teasing out the several implications of these simple premises.
It is much harder to articulate the case for a mixed economy than the case for free markets,
precisely because the mixed economy is mixed. The rebuttal takes several paragraphs. The more
complex story holds that markets are substantially efficient in some realms but far from
efficient in others, because of positive and negative externalities, the tendency of financial
markets to create cycles of boom and bust, the intersection of self-interest and corruption,
the asymmetry of information between company and consumer, the asymmetry of power between
corporation and employee, the power of the powerful to rig the rules, and the fact that there
are realms of human life (the right to vote, human liberty, security of one's person) that
should not be marketized.
And if markets are not perfectly efficient, then distributive questions are partly political
choices. Some societies pay pre-K teachers the minimum wage as glorified babysitters. Others
educate and compensate them as professionals. There is no "correct" market-derived wage,
because pre-kindergarten is a social good and the issue of how to train and compensate teachers
is a social choice, not a market choice. The same is true of the other human services,
including medicine. Nor is there a theoretically correct set of rules for patents, trademarks,
and copyrights. These are politically derived, either balancing the interests of innovation
with those of diffusion -- or being politically captured by incumbent industries.
Governments can in principle improve on market outcomes via regulation, but that fact is
complicated by the risk of regulatory capture. So another issue that arises is market failure
versus polity failure, which brings us back to the urgency of strong democracy and effective
government.
After Neoliberalism
The political reversal of neoliberalism can only come through practical politics and
policies that demonstrate how government often can serve citizens more equitably and
efficiently than markets. Revision of theory will take care of itself. There is no shortage of
dissenting theorists and empirical policy researchers whose scholarly work has been vindicated
by events. What they need is not more theory but more influence, both in the academy and in the
corridors of power. They are available to advise a new progressive administration, if
that administration can get elected and if it refrains from hiring neoliberal
advisers.
There are also some relatively new areas that invite policy innovation. These include
regulation of privacy rights versus entrepreneurial liberties in the digital realm; how to
think of the internet as a common carrier; how to update competition and antitrust policy as
platform monopolies exert new forms of market power; how to modernize labor-market policy in
the era of the gig economy; and the role of deeper income supplements as machines replace human
workers.
The failed neoliberal experiment also makes the case not just for better-regulated
capitalism but for direct public alternatives as well. Banking, done properly, especially the
provision of mortgage finance, is close to a public utility. Much of it could be public. A
great deal of research is done more honestly and more cost-effectively in public, peer-reviewed
institutions such as the NIHthan by a substantially corrupt private pharmaceutical industry.
Social housing often is more cost-effective than so-called public-private partnerships. Public
power is more efficient to generate, less prone to monopolistic price-gouging, and friendlier
to the needed green transition than private power. The public option in health care is far more
efficient than the current crazy quilt in which each layer of complexity adds opacity and cost.
Public provision does require public oversight, but that is more straightforward and
transparent than the byzantine dance of regulation and counter-regulation.
The two other benefits of direct public provision are that the public gets direct evidence
of government delivering something of value, and that the countervailing power of democracy to
harness markets is enhanced. A mixed economy depends above all on a strong democracy -- one
even stronger than the democracy that succumbed to the corrupting influence of economic elites
and their neoliberal intellectual allies beginning half a century ago. The antidote to the
resurrected neoliberal fable is the resurrection of democracy -- strong enough to tame the
market in a way that tames it for keeps.
Excellent article and very much appreciated so I can share with confused Liberal friends
(mostly older) who think that they are now, somehow, Neoliberal. As far as market failure is
concerned: I think Boeing is an incredible case in point. When one of the nation's flagship
enterprises captures regulatory processes so completely that it produces a product that
cannot accomplish its one aim: to fly. Btw: I am seeing a lot of use of the "populist" to
describe what might be more correctly described as nativist, xenophobic, anti-democratic,
authoritarian, or even outright fascist leaders. Keep the language clear and insist on
precise definitions.
Excellent article, I agree. As regards clear language and definitions, I much prefer Michael Hudson's insistence that, to
the liberal economists, free markets were markets free from rent seeking, while to the
neoliberals free markets are free from government regulation.
"As governments were democratized, especially in the United States, liberals came to endorse
a policy of active public welfare spending and hence government intervention, especially on
behalf of the poor and disadvantaged. neoliberalism sought to restore the centralized
aristocratic and oligarchic rentier control of domestic politics."
"The economic collapse of 2008 was the result of the deregulation of finance. It cost the
real U.S. economy upwards of $15 trillion (and vastly more globally), depending on how you
count, far more than any conceivable efficiency gain that might be credited to financial
innovation ."
That High Priest of neo-Liberalism Alan Greenspan once said,
"The only thing useful banks have invented in 20 years is the ATM "
Hard to see how the federal government can be gotten back from the cartels at this point-
the whole thing is so corrupt. And the "socialism is bad" mantra has captured a lot of easily
led brains.
In a political system where the reputedly "labor" party would rather lose with their
bribe-taking warmongering Goldwater girl than win with a people's advocate, Houston we have a
problem.
As with anthropogenic climate change, the cause is systemic- the political system is based
on money control and the economic system is based on unsustainable energy use. Absent a
crash, crisis, systematic chaos and destruction I don't see much changing other than at the
margins- the corruption is too entrenched.
The following is a portion of an op-ed piece that appeared in the New
York Times On April 4, 1944 . It was written by Henry Wallace, FDR's vice president;
If we define an American fascist as one who in case of conflict puts money and power
ahead of human beings, then there are undoubtedly several million fascists in the United
States. There are probably several hundred thousand if we narrow the definition to include
only those who in their search for money and power are ruthless and deceitful. Most
American fascists are enthusiastically supporting the war effort. They are doing this even
in those cases where they hope to have profitable connections with German chemical firms
after the war ends. They are patriotic in time of war because it is to their interest to be
so, but in time of peace they follow power and the dollar wherever they may lead.
American fascism will not be really dangerous until there is a purposeful coalition
among the cartelists, the deliberate poisoners of public information, and those who stand
for the K.K.K. type of demagoguery.
The European brand of fascism will probably present its most serious postwar threat to
us via Latin America. The effect of the war has been to raise the cost of living in most
Latin American countries much faster than the wages of labor. The fascists in most Latin
American countries tell the people that the reason their wages will not buy as much in the
way of goods is because of Yankee imperialism. The fascists in Latin America learn to speak
and act like natives. Our chemical and other manufacturing concerns are all too often ready
to let the Germans have Latin American markets, provided the American companies can work
out an arrangement which will enable them to charge high prices to the consumer inside the
United States. Following this war, technology will have reached such a point that it will
be possible for Germans, using South America as a base, to cause us much more difficulty in
World War III than they did in World War II. The military and landowning cliques in many
South American countries will find it attractive financially to work with German fascist
concerns as well as expedient from the standpoint of temporary power politics.
Fascism is a worldwide disease. Its greatest threat to the United States will come after
the war, either via Latin America or within the United States itself.
The full text is quite useful in understanding that there is no question as to how and why
we find ourselves in the present predicament, it is the logical outcome of a process that was
well understood during FDR's tenure.
That understanding has since been deliberately eradicated by the powerful interests that
control our media.
There was a lot of wisdom put forth during and shortly after WWII in both politics (see
above) and economics.
For example, there was a Treasury official, whose name I can't remember right now, who
understood that the Federal government has no real need to collect taxes. And, Keynesianism
prevailed until Milton Friedman and the Chicago School came along and turned everything
upside down with Monetarism.
"absent a crash " I reckon "unsustainable" is an important word to remember. None of it is sustainable all those spinning plates and balls in the air .and the grasshopper
god demands that they keep adding more and more plates and balls.
All based on a bunch of purposefully unexamined assumptions.
Or Edward Abbey: "Growth for the sake of growth is the ideology of the cancer cell."
I did an A-level (UK exam for 18 year olds) in economics years ago, and despite passing with
an A, I not only couldn't understand this underlying assumption of continued exponential
growth forever, I also couldn't understand why anyone couldn't understand its obvious
absurdity.
Sustainability was a bit of a new word in those days, but when I discovered it, it summed up
my problems with (over-) developed economies.
To add to the confusion, a different and partly overlapping usage was advanced in the
1970s by the group around the Washington Monthly magazine. They used "neoliberal" to mean a
new, less statist form of American liberalism. Around the same time, the term
neoconservative was used as a self-description by former liberals who embraced
conservatism, on cultural, racial, economic, and foreign-policy grounds. Neoconservatives
were neoliberals in economics.
This commenter has been scolded in the past for invoking Charlie Peters and the Washington
Monthly rather than Friedman, Hayek etc. But what Peters' highly influential magazine (and
the transformed New Republic that followed) did was to bring the Democrats into the
neoliberal fold and that may be the real reason it's a beast that can't be killed.
Neoliberalism gave liberals an excuse to sell out in the name of "fresh thinking." Meanwhile
the vast working class had become discredited Archie Bunkers in the eyes of the intellectuals
after Vietnam and the Civil Rights struggles.
It's possible that what really changed the
country was the rise of that middle class that Kuttner now mourns. Suggesting that it was all
the result of a rightwing plan is too easy although that was certainly part of it.
I'd add two other consequences of neoliberalism. One is the increasing alienation of
citizens from the mechanism for provision of the basic necessities of life. Before the 1980s,
for example, water, gas, electricity etc. were provided by publicly-owned utilities with
local offices, recognisable local and national structures, and responsible to an elected
Minister.
If you had a serious problem, then in the final analysis you could write a letter
to your MP, who would take it up with the Minister. Now, you are no longer a citizen but a
consumer, and your utilities are provided by some weird private sector thing, owned by
another company, owned by some third company, frequently based abroad, and with its customer
services outsourced to yet another company which could be anywhere in the world all. All this
involves significant transaction costs for individuals, who are expected to conduct
sophisticated cost-effectiveness comparisons between providers, when in fact they just want
to turn on the tap and have water come out.
The other is that government (and hence the citizen) loses any capacity for strategic
planning. Most nationalized industries in Britain were either created because the private
sector wasn't interested, or picked up when the private sector went bankrupt (the railways
for example). But without ownership, the capacity to decide what you want and get it is much
reduced. You can see that with the example of the Minitel – a proto-internet system
given away free by the French government through the state-owned France Telecom in the early
1980s, and years ahead of anything else. You literally couldn't do anything similar now.
Taking Michael Hudson's work into account, there is a much deeper and older dynamic at
work, of which neoliberalism is just the latest itineration.
A possible explanation goes to the nature of money.
As the accounting device that enables mass societies to function, it amounts to a contract
between the individual and the community, with one side an asset and the other a debt. Yet as
we experience it as quantified hope, we try to save and store it.
Consequently, in order to store the asset, similar amounts of debt have to be created.
Which results in a centripedial effect, as positive feedback draws the asset side to the
center of the social construct, while negative feedback pushes the debt to the edges. It
could be argued this dynamic is the basis of economic hierarchy, not just a consequence.
Yet money and finance function as the economic blood and arteries, circulating value around
the entire community, so the effect of this dynamic is like the heart telling the hands and
feet they don't need so much blood and should work harder for what they do get.
Basically we have to accept that while money is an effective medium of exchange, it is not a
productive store of value. We wouldn't confuse blood with fat, or roads with parking lots, so
it should be possible to learn to store value in tangibles, like the strong communities and
healthy environments that will give us the safety and security we presumably save money
for.
As a medium, we own money like we own the section of road we are using, or the fluids passing
through our bodies.
Let the neoliberals chew on that.
Yet money and finance function as the economic blood and arteries, circulating value
around the entire community, so the effect of this dynamic is like the heart telling the
hands and feet they don't need so much blood and should work harder for what they do
get.
Thanks.
Political persuasion is about keeping it simple.
How about; Government was once private. It was called monarchy. Do we want to go back there,
or do we need to better understand the balance between public and private? Even houses have
spaces that are public and spaces that are private.
This is, indeed, an excellent historical overview, evoking some of Kuttner's best writing
over the decades. I would recommend it with no hesitation.
On the other hand, Kuttner's American Prospect has also provided cover for some damaging
faux-progressive enablers of neoliberalism over those decades (IMHO). A puzzlement.
I must remind everyone that Bob Kuttner is no longer what he used to be. Bob Kuttner was
against progressive Dem candidates like Bernie in 2016, and was in bed with THE neoliberal
candidate ..With the passage of time, Kuttner has evolved into a partisan for the sake of
partisanship, instead of being principled.
after reading your comment I went through the post again and found these suspicious
points
"The failure of neoliberalism as economic and social policy does not mean that markets
never work. A command economy is even more utopian and perverse than a neoliberal one. The
practical quest is for an efficient and equitable middle ground. "
so, get in front of the riot and call it a parade? Maybe a little bit.
Also
"Nonetheless, in many sectors of the economy, the process of buying and selling is close
enough to the textbook conditions of perfect competition that the price system works
tolerably well. Supermarkets, for instance, deliver roughly accurate prices because of the
consumer's freedom and knowledge to shop around. Likewise much of retailing . However, when
we get into major realms of the economy with positive or negative externalities, such as
education and health, markets are not sufficient. And in other major realms, such as
pharmaceuticals, where corporations use their political power to rig the terms of patents,
the market doesn't produce a cure."
Probably not working so well for the employees or the farm workers who get food on the
shelf
I guess maybe not practical to change that dynamic? That said, as history the post is as good
as anything else I've seen, and reads well, but maybe does need a grain of salt to make it
more palatable.
"Neoliberalism's premise is that free markets can regulate themselves; that government is
inherently incompetent, captive to special interests, and an intrusion on the efficiency of
the market; that in distributive terms, market outcomes are basically deserved; and that
redistribution creates perverse incentives by punishing the economy's winners and rewarding
its losers. So government should get out of the market's way."
In an otherwise good article the author makes a fundamental error. As Phillip Mirowski
patiently explains in Never Let a Serious Crisis Go to Waste, neoliberalism is not laissez
faire. Neoliberal desire a strong government to implement their market based nirvana, as long
as they control government.
The entire point of the Ukraine conflict was to drive a wedge between natural allies in
Europe: Russia and Germany. Together they would form the most powerful economic block on earth.
This is USA greatest fear. Luckily for USA, they succeeded in blocking this alliance...
It all began during what I think of as the " Kristallnacht of international law," 30
August September 1995, when the Empire attacked the Bosnian-Serbs in a direct and total
violation of all the most fundamental principles of international law. Then there was 9/11,
which gave the Neocons the "right" (or so they claimed) to threaten, attack, bomb, kill, maim,
kidnap, assassinate, torture, blackmail and otherwise mistreat any person, group or nation on
the planet simply because " we are the indispensable nation " and " you either are
with the terroristsor with us ". During these same years, we saw Europe become a
third-rate US colony incapable of defending even fundamental European geopolitical interests
while the US became a third-rate colony of Israel equally incapable of defending even
fundamental US geopolitical interests. Most interestingly looking back, while the US and the EU
were collapsing under the weight of their own mistakes, Russia and China were clearly on the
ascend; Russia mostly in military terms (see here and here
) and China mostly economically. Most crucially, Russia
and China gradually agreed to become symbionts which, I would argue, is even stronger
and more meaningful than if these two countries were united by some kind of formal alliance:
alliances can be broken (especially when a western nation is involved), but symbiotic
relationships usually last forever (well, nothing lasts forever, of course, but when a lifespan
is measured in decades, it is the functional equivalent of "forever", at least in geostrategic
analytical terms). The Chinese have now developed an official, special, and unique
expression to characterize that relationship with Russia. They speak of a "Strategic,
comprehensive partnership of coordination for the new era."
... ... ...
Empires cannot only trade. Trade alone is simply not enough to remain a viable empire.
Empires also need military force, and not just any military force, but the kind of military
force which makes resistance futile. The truth is that NO modern country has anywhere near the
capabilities needed to replace the US in the role of World Hegemon: not even uniting the
Russian and Chinese militaries would achieve that result since these two countries do not
have:
1) a worldwide network of bases (which the US have, between 700-1000 depending on how you
count)
2) a major strategic air-lift and sea-lift power projection capability
3) a network of so-called "allies" (colonial puppets, really) which will assist in any
deployment of military force
...
neither China nor Russia have any interests in policing the planet or imposing some regime
change on other countries. All they really want is to be safe from the US, that's it.
This new reality is particularly visible in the Middle-East where countries like the United
States, Israel or Saudi Arabia (this is the so-called "Axis of Kindness") are currently only
capable of deploying a military capable of massacring civilians or destroy the infrastructure
of a country, but which cannot be used effectively against the two real regional powers with a
modern military: Iran and Turkey.
But the most revealing litmus test was the US attempt to bully Venezuela back into
submission. For all the fire and brimstone threats coming out of DC, the entire "Bolton
plan(s?)" for Venezuela has/have resulted in a truly embarrassing failure: if the Sole
"Hyperpower" on the planet cannot even overpower a tremendously weakened country right in its
backyard, a country undergoing a major crisis, then indeed the US military should stick to the
invasion of small countries like Monaco, Micronesia or maybe the Vatican (assuming the Swiss
guard will not want to take a shot at the armed reps of the "indispensable nation"). The fact
is that an increasing number of medium-sized "average" countries are now gradually acquiring
the means to resist a US attack.
So if the writing is on the wall for the AngloZionist Empire, and if no country can replace
the US as imperial world hegemon, what does that mean?
It means the following: 1000 years of European imperialism is coming to an end
!
This time around, neither Spain nor the UK nor Austria will take the place of the US and try
to become a world hegemon. In fact, there is not a single European nation which has a military
even remotely capable of engaging the kind of "colony pacification" operations needed to keep
your colonies in a suitable state of despair and terror. The French had their very last hurray
in Algeria, the UK in the Falklands, Spain can't even get Gibraltar back, and Holland has no
real navy worth speaking about. As for central European countries, they are too busy
brown-nosing the current empire to even think of becoming an empire (well, except Poland, of
course, which dreams of some kind of Polish Empire between the Baltic and the Black Sea; let
them, they have been dreaming about it for centuries, and they will still dream about it for
many centuries to come ).
Now compare European militaries with the kind of armed forces you can find in Latin America
or Asia? There is such a knee-jerk assumption of superiority in most Anglos that they
completely fail to realize that medium and even small-sized countries can develop militaries
sufficient enough to make an outright US invasion impossible or, at least, any occupation
prohibitively expensive in terms of human lives and money (see here
, here and
here ). This
new reality also makes the typical US missile/airstrike campaign pretty useless: they will
destroy a lot of buildings and bridges, they will turn the local TV stations ("propaganda
outlets" in imperial terminology) into giant piles of smoking rubble and dead bodies, and they
kill plenty of innocents, but that won't result in any kind of regime change. The striking fact
is that if we accept that warfare is the continuation of politics by other means, then we also
have to admit, that under that definition, the US armed forces are totally useless since they
cannot help the US achieve any meaningful political goals.
The truth is that in military and economic terms, the "West" has already lost. The fact that
those who understand don't talk, and that those who talk about this (denying it, of course)
have no understanding of what is taking place, makes no difference at all.
...Indeed, if the Neocons don't blow up the entire planet in a nuclear holocaust, the US and
Europe will survive, but only after a painful transition period which could last for a decade
or more. One of the factors which will immensely complicate the transition from Empire to
"regular" country will be the profound and deep influence 1000 years of imperialism have had on
the western cultures, especially in the completely megalomaniac United States ( Professor
John Marciano's "Empire as a way of life" lecture series addresses this topic superbly
– I highly recommend them!): One thousand years of brainwashing are not so easily
overcome, especially on the subconscious (assumptions) level.
Well, the number one factor keeping empire in a hegemonic stance is the hegemonic U.S. dollar.
The empire isn't going anywhere as long as the dollar remains as the worlds reserve currency.
Most of planetary trade goes through Brussels and Wall Street denoted in dollars. Most of the
credit cards carried and used around the world are SWIFT creations.
How and where this will change will be more telling than where the military loses its last
battle.
A usual tour de force by the Saker. But one can see things also very differently.
– Western Imperialism: the Holy Roman Empire never had any colonies. Nor did any of
the Eastern European states. Nor did the Italians states save for the farcical attempts of
Mussolini
– Whas the Turkish empire also due to the Frankish imperialistic popish impulse?
– What the Saker is talking about here are basically GB, France and Holland.
– What about the Russian Empire? What was it but a colonial enterprise? And will rump
Russia endure? I have my doubts. Putin ended the Chechen war by giving Chechnya de facto if not
de jure self governance. Right now things are okey dokey as Russia is bribing Kadyrov and
Kadyrov and Putin having a special personal relationship. But what if circumstances change?
Putin not being there any more and some new Russian government tries to enforce its writ in
Chechnya? On top there is the birthrate in the Caucasus which is two times the Russian
birthrate. Will all those different nationalities still feel bound to Russia in the future? And
will Russians be willing to subsidise the Caucasus for ever?
– The "symbiosis" between Russia and China is laughable. As soon as the Anglo-Zionist
empire really collapses the differences between Russia and China will come to the fore.
To get China´s help after the Ukraine crisis Russia had to give China a free hand in
Mongolia. Before Russia had always seen to it that Mongolia didn´t get too dependent on
China. Half of the foreign exchange of Mongolia was earned by the Russian-Mongolian copper mine
of Erdenet. Three years ago Russia sold its share in Erdenet. By now Erdenet has been pledged
by Mongolias venal politicians as collateral for Chinese loans.
Also China has certainly never forgot that the Russian far East was part of the Qing empire
until the 1850s.Tthis will be brought up again as soon as Russia is sufficiently weak.
Russia was forced into the alliance with China by the West. The only industrial sphere where
Russia does indeed have world class expertise is in armaments. After Ukraine Russia was forced
to share its technology with China. And China will definately put this new knowledge to good
use and in the not so far future overtake Russia in this particular field of expertise. Then
watch what will happen.
– China not interested in old fashioned imperial politics. That is laughable as well.
China has a base in Ceylon now that they got as collateral for a loan that Ceylon
couldn´t repay. China is laying claim to the whole South China sea and even parts of the
200 mile zones of countries like the Philipines, Indonesia and Vietnam. To back up these claims
with military muscle they build navy bases all over the Spratley islands
– China is getting more and more carbon hydrates through pipelines from Central Asia.
At the same time it is mass imprisoning its Turkic population (Uyghus, Kazakhs and Kirgiz). The
way the Chinese treat those people is exactly racist in the way the Saker has described the
European relationship to the rest of the world. If you are a businessman in any one of those
countries you will not be allowed to interact with people of the same faith, culture and almost
the same language who live just across the border in Xinjiang.
The Chinese government has seen to the fact that any member of those minorities lives in
mortal fear of any contact with foreigners. Any business must now be conducted only with ethnic
Chinese. And as as a Kirghiz or Kazakh national you are not distuingishable from a Kirgiz or
Kazakh from Xinjiang you will suffer the same indignities as them when you travel to
Xinjiang.
As venal and corrupt as the elites of the "Stans" might be: even they perceive Chinese
actions in neighbouring Xinjiang as so grossly offensive that they hardly hide their disdain
anymore. In fact I talked to a journalist last week who was present at the latest SCO gathering
in Bishkek. She was astonished at the level of Sinophobia she accountered.
So on the one hand China is in the process of acquiring more and more of the ressources of
the Stans. But on the other hand it is worsening its relationship with the peoples of these
countries.
The Stans are still ruled by the same Soviet nomenklatura. There has been no real change.
The question is how stable this arrangement is. It definately fits the requirement of the
Chinese but the longer this lasts the more the elites of the Stans are coming between China and
their own population.
China is well aware of this. To protect its investment it might have to use force in the
future. And that is what I expect to happen in case one of those pipelines is interrupted. Not
so different from what the West is doing in the Middle East. All that talk of the Saker about
"good" and "bad" civilisations and promised land once the Anglo-Zionist ascendancy is over is
just that: empty words.
In reality Nitzsche is still right: States are the coldest of cold monsters.
It is incredibly , wickedly absurd and naïve to even think that , what you call an
empire
will go down without a world shattering fight.
It is mindless ignorance not to notice the handwriting on the wall.
This entity you call empire , has been preparing for this event for centuries.
They are telling it in our face directly , " new world order", " full spectrum domination"
They have what nobody else has , a proactive plan, a global network of military bases, and
the scariest part is the fact , that they have no moral barriers to say that, it is not going
to be a fair fight. No hold barred ! No laws ! No rules of engagement! The end justifies the
means !
On the end they will not win in fact nobody will .
But the old must die for the new to be .
Our desire to become brought us to this point , it was an exiting ride , but the new humans
will have a " climate change " of consciousness .
That is not a silly hope , that is logic based clearly on design.
Both US Americans and Europeans will, for the very first time in their history, have to
behave like civilized people, which means that their traditional "model of development"
(ransacking the entire planet and robbing everybody blind) will have to be replaced by one in
which these US Americans and Europeans will have to work like everybody else to accumulate
riches.
Most Americans don't get to collect welfare. Most Americans have to get jobs and pay for
stuff. Most Americans who work do NOT accumulate riches – they go broke. Probably the
elite .01% – guys like Jeff Bezos and Jeff Epstein and Bernie Madoff – can get rich
and accumulate riches. That is not "AngloZionist." It's just Zionist.
"... US President Trump does not do that in order to dismantle the dollar or US hegemony because of so called isolationism, as some may think. Trump does that in order to save US hegemony, implementing policies, in my opinion, devised by the US military/intelligence/science community. They now want to hamper globalisation and create fortress US, in order to bring back manufacturing and save as much as possible of the US Empire. Chaos and lack of cooperation in the world benefit the US. They now realise globalisation no longer serves the US as it leads to the rise of developing nations. Thus they no longer support it and even sabotage it." ..."
"... Trump and his trade negotiators continue to insist on China agreeing to an unequal trade treaty. ..."
"... IMO, China can continue to refuse and stand up for its principles, while the world looks on and nods its head in agreement with China as revealed by the increasing desire of nations to become a BRI partner. ..."
"... It should be noted that Trump's approach while differing from the one pushed by Obama/Kerry/Clinton the goal is the same since the Empire needs the infusion of loot from China to keep its financial dollarized Ponzi Scheme functioning. ..."
"... Russia's a target too, but most of its available loot was already grabbed during the 1990s. ..."
"... I keep going back to believing that multilateralism is a code word for no longer allowing empire global private finance hegemony and fiat money. ..."
"... The continuing practice of Neoliberalism by the Outlaw US Empire and its associated corporations and vassal nations checkmates what you think Trump's trying to accomplish. Hudson has explained it all very well in a series of recent papers and interviews: Neoliberalism is all about growing Financial Capitalism and using it to exert control/hegemony on all aspects of political-economy. ..."
"... Trump hasn't proposed any new policy to accomplish his MAGA pledge other than engaging in economic warfare with most other nations. His is a Unilateral Pirate Ship out to plunder all and sundry, including those that elected him. ..."
I will mention this again, to see what people here think, as they are intelligent people. I sent mails to Russian and Chinese
authorities about this.
"I will provide you with possible reasons behind the current trade wars and rejection of globalisation by the US. In short,
they think that they will save their hegemony, to a certain degree, that way.
There are long term GDP Growth and Socioeconomic Scenarios developed by the Intergovernmental Panel on Climate Change, the
OECD, and the world scientific community. They are generally used to measure the impact of Climate change on the World. In order
to measure it, Socioeconomic Scenarios were developed, as the level of economic growth in the world is very important for determining
the impact of Climate Change in the future. High growth levels will obviously affect Climate Change, so these GDP estimates are
important. The scenarios are with time horizon 2100.
For more on this you can check these studies here, some of the many dealing with this topic. They describe the scenarios for
the world.
There are 5 main scenarios, or "Shared Socioeconomic Pathways". All of them describe different worlds.
SSP 1 - Green World, economic cooperation, reduced inequality, good education systems. High level of economic growth, fast
catch up of the developing world with the developed world. High level of multipolarity.
SSP 2 - More of the same/ Muddling through - continuation of the current trends. Relatively high level of economic growth,
relatively fast catch up of the developing world with the developed world. Good level of multipolarity.
SSP 3 - Regional Rivalry - nationalisms, trade wars, lack of global cooperation, fragmentation of the word, environmental
degradation. Low levels of economic growth everywhere, the developing world remains poor and undeveloped. Low level of multipolarity,
West retains many positions.
SSP 4 Inequality - depicts a world where high-income countries use technological advances to stimulate economic growth;
leading to a high capacity to mitigate. In contrast, developments in low income countries are hampered by very low education
levels and international barriers to trade. Growth is medium, the catch up process between the developing world and the developed
world is not fast. Medium level of multipolarity.
SSP 5 Economic growth and fossil fuels take priority over green world - High levels of economic growth, fast catch up of
the developing world with the developed world. High level of multipolarity.
See SSP 3. A world of rivalry, trade wars, trade barriers, lack of global cooperation, and fragmentation, will lead to lower
level of growth in the developing world, and thus a slow catch up process. Multipolarity in such a world is weak as the developing
world is hampered.
In other words, a world of cooperation between countries will lead to higher economic growth in the developing world, faster
catch up process, and thus stronger multipolarity.
Low cooperation, fragmented world, high conflict scenarios consistently lead to low growth in the developing world and thus
to the US and the West retaining some of its positions - a world with overall bad economy and low level of multipolarity.
Basically, globalisation is key. The developing world (ex West) was growing slowly before globalisation (before 1990). Globalisation
means sharing of technology and knowledge, and companies investing in poorer countries. Outsourcing of western manufacturing.
Etc. After globalisation started in 1990, the developing world is growing very well. It is globalisation that is weakening the
relative power of the West and empowering the developing world. The US now needs to kill globalisation if it is to stop its relative
decline.
So what do we see: exactly attempts to create the SSP 3 scenario. Trade wars, sanctions, attacks on multilateral institutions
- the WTO, on international law, on the Paris Climate Change Agreement (which if accepted would put constraints on the US economy),
on the UN, bullying of Europe, lack of care for european energy needs, support for Brexit (which weakens Europe), crack down on
chinese students and scientists in the US, crack down on chinese access to western science data, demands to remove the perks for
poor countries in the WTO, etc. This is hitting economic growth in the whole world and the global economy currently is not well.
By destroying the world economy, the US benefits as it hampers the rise of the developing nations.
US President Trump does not do that in order to dismantle the dollar or US hegemony because of so called isolationism,
as some may think. Trump does that in order to save US hegemony, implementing policies, in my opinion, devised by the US military/intelligence/science
community. They now want to hamper globalisation and create fortress US, in order to bring back manufacturing and save as much
as possible of the US Empire. Chaos and lack of cooperation in the world benefit the US. They now realise globalisation no longer
serves the US as it leads to the rise of developing nations. Thus they no longer support it and even sabotage it."
You ask, "The concept of multilateralism is not completely clear to me in relation to the global public/private finance issue
and I am not of faith but of questions...."
"In international relations, multilateralism refers to an alliance of multiple countries pursuing a common goal."
The key point for the Chinese during negotiations as I understand them via their published White Paper on the subject is
development and the international rules put in place at WTO for nations placed into the Developing category, which
get some preferential treatment to help their economies mature. As China often reminds the global public--and officials of the
Outlaw US Empire--both the BRI and EAEU projects are about developing the economies of developing economies, that the process
is designed to be a Win-Win for all the developing economies involved. This of course differs vastly from what's known as the
Washington Consensus, where all developing economies kowtow to the Outlaw US Empire's diktat via the World Bank and IMF and thus
become enslaved by dollar dependency/debt. Much is written about the true nature of the Washington Consensus, Perkins Confessions
of an Economic Hit Man and Klein's Disaster Capitalism being two of the more recent and devastating, and many nations
are able to attest to the Zero-sum results. The result is very few nations are willing to subject their economies to the pillaging
via Washington Consensus institutions, which Hudson just recently reviewed.
The Empire is desperate and is looking for ways to keep its Super Imperialism intact and thus continue its policy aimed at
Full Spectrum Dominance. But the Empire's abuse of the dollar-centric institutions of international commerce has only served to
alienate its users who are openly and actively seeking to form parallel institutions under genuine multilateral control.
However as Hudson illustrates, Trump doesn't know what he's doing regarding his trade and international monetary policies. Today's
AP above the fold headline in Eugene's The Register Guard screamed "Trump threatens 10% tariffs;" but unusually for such
stories, it explains that the 10% is essentially a tax on US consumers, not on Chinese companies, which provides a message opposite
of the one Trump wants to impart--that he's being tough on the Chinese when the opposite's true. China will continue to resist
the attempts to allow the international financial sharks to swim in Chinese waters as China is well aware of what they'll attempt
to accomplish--and it's far easier to keep them out than to get them out once allowed in, although China's anti-corruption laws
ought to scare the hell out of the CEOs of those corps.
The Empire wants to continue its longstanding Open Door policy in the realm of target nations opening their economies to the
full force of Imperial-based corps so they can use their financial might to wrestle the market from domestic players and institute
their Oligopoly. China already experienced the initial Open Door (which was aimed at getting Uncle Sam's share of China during
the Unequal Treaties period 115 years ago) and will not allow that to recur. China invokes its right under WTO rules for developing
economies to protect their financial services sector from predation; the Empire argues China is beyond a developing economy and
must drop its shields. We've read what Hudson advised the Chinese to do--resist and develop a publicly-based yuan-centered financial
system that highly taxes privatized rent-seekers while keeping and enhancing state-provided insurance--health, home, auto, life,
etc--while keeping restrictions on foreign land ownership since it's jot allowed to purchase similar assets within the domestic
US market.
The Outlaw US Empire insists that China give so it can take. Understandably, China says no; what we allow you to do, you should
allow us to do. Trump and his trade negotiators continue to insist on China agreeing to an unequal trade treaty. Obviously,
the latest proposal was merely a repetition of what came before and was rejected as soon as the meeting got underway, so it ended
as quickly as it started. IMO, China can continue to refuse and stand up for its principles, while the world looks on and
nods its head in agreement with China as revealed by the increasing desire of nations to become a BRI partner.
It should be noted that Trump's approach while differing from the one pushed by Obama/Kerry/Clinton the goal is the same
since the Empire needs the infusion of loot from China to keep its financial dollarized Ponzi Scheme functioning.
Russia's a target too, but most of its available loot was already grabbed during the 1990s. D-Party Establishment
candidates have yet to let it be known they'll try to do what Trump's failing to do, which of course has nothing to do with aiding
the US consumer and everything to do with bolstering Wall Street's Ponzi Scheme.
Good comment, karlof1 , i think that the attack against China is attack against the heart of multipolarity. It will be good
if b could post about the escalation of the trade war. This is important. The US clearly intends to resist multipoarity, and tries
to stop it.
If I would have had my act together last night I would have posted another link fro Xinhuanet (can't find now) about how
China wants to retain developing nation status and provides as data that the (I think) per capita GDP had gone down....gotten
worse in relation to the US per capita GDP.
I keep going back to believing that multilateralism is a code word for no longer allowing empire global private finance
hegemony and fiat money.
Passer by @30--
The continuing practice of Neoliberalism by the Outlaw US Empire and its associated corporations and vassal nations checkmates
what you think Trump's trying to accomplish. Hudson has explained it
all very well in a series of recent papers and interviews: Neoliberalism is all about growing Financial Capitalism and using it
to exert control/hegemony on all aspects of political-economy.
Thus, there's no need to sponsor the reindustrialization that would lead to MAGA. Indeed, Trump hasn't proposed any new
policy to accomplish his MAGA pledge other than engaging in economic warfare with most other nations. His is a Unilateral Pirate
Ship out to plunder all and sundry, including those that elected him.
In your outline, it's very easy to see why BRI is so attractive to other nations as it forwards SSP1. Awhile ago during a discussion
of China's development goals, I posted links to its program that's very ambitious and doing very well with its implementation,
the main introduction portal
being here .
psychohistorian @11 asked: "The concept of multilateralism is not completely clear to me in relation to the global public/private
finance issue and I am not of faith but of questions...."
karlof1 @31 covered it pretty well I think, but I want to try to answer in just a couple sentences (unusual for me).
Global private finance is driven by one thing and one thing only: making maximum profits for the owners quarter by financial
quarter. Global public finance is driven by the agendas of the nations with the public finance, with profits being a secondary
or lesser issue.
This boils down to private finance being forever slave to the mindless whims of "The Market™" (hallowed be Its name),
while public finance is, by its nature, something that is planned and deliberated. Nobody can guess where "The Market™"
(hallowed be Its name) will lead society, though people with the resources like placing bets in stock markets on the direction
It is taking us. On the other hand, if people have an idea which direction society should be heading in, public control
over finance is a precondition to making it so.
"The continuing practice of Neoliberalism by the Outlaw US Empire"
I'm not sure this will be the case anymore -
Former heads of DHS and NSA explain how the U.S. can keep Huawei at bay
"Perhaps more importantly, this proposal demonstrates one way the U.S. can reinforce elements of what the government calls
the “national technology and industrial base” (NTIB), the collection of companies who design, build and supply the U.S. with vital
national-security related technologies."
@ Posted by: Hor, Jennifer | Aug 3 2019 11:33 utc | 77
The Nordic nations became rich welfare states in the post-war for different reasons.
Sweden already was a rich kingdom/country since the end of the 18th Century. In both WW it
managed to stay neutral, so it went through them relatively unscathed.
Norway was a very poor country until North Sea oil was discovered at the beginning of the
1980s.
I don't know the case of Denmark.
Finland was a poor country which was basically rebuild from zero in the aftermath of WWII,
thanks to the neutrality pact between the USA and the USSR. It was decided that Finland would
be a very prosperous country, without many inner social contradictions, in exchange for
absolute neutrality during the Cold War.
Iceland was very frugal, simple and classless village of fishermen that suddenly became
very prosperous after the 1990s thanks to the sudden expansion of the world banking
sector.
You see, all these countries became prosperous for different reasons. But what they all
had in common was:
1) they all had relatively strong socialist parties/well-organized working classes in the
aftermath of the WWII (except Iceland); and
2) all of them were insignificant countries in a very significant geographic location
(frontier between Iron Curtain and Western Europe). Iceland's case is emblematic in this
aspect, since it won the Cod Wars against a much more powerful enemy (the UK) solely on its
geography (as the main outpost of the GIUK gap).
To put it simply, the countries which managed to create "welfare states" were countries
usually at the cordon sanitaire area that, in a very smart and eventful way, managed to
successfully use both superpowers to extract maximum wealth from an USA that, at the time,
still had the material means to make small countries rich and prosperous (Taiwan and South
Korea were the most emblematic cases in this aspect: both begun their respective
industrialization essentially by blackmailing the USA and the USA/Japan, respectively).
As we well know now, the welfare state quickly evaporated when:
a) the USA begun to degenerate economically after the "stagflation" crisis (triggered by
the oil crisis of 1974-5) that effectively destroyed the prestige of Keynesianism in the West
and paved the way to the rise of Neoliberalism as the new main capitalist doctrine
(Neoliberalism existed since the 1930s). According to the Keynesian "theory", stagflation was
impossible, since supply should always equal demand (so, when unemployment falls, inflation
goes up and vice versa). Stagflation saw both high unemployment and high inflation.
Capitalism's "lifeblood" is the profit rate, and as those begun to fall, America begun to
impose a series of financial weapons which undermined the spreading of the social-democrat
consensus of the post-war, in a process that culminated with the Plaza Accord (1985) –
which killed Japanese and German industrialization.
b) the USSR was destroyed from within in 1991, ending the menace from without and, thus,
the working classes of the cordon sanitaire area main leverage against the capitalists of
their own country. The USA now is the world solitary superpower and can do what it
pleases.
Hongkong is no longer of great importance for bejing as a financial and trading locus. up and
down the south china sea coast are many cities of far greater importance than Hongkong.
perhaps when the PLA finish in hongkong they can come over here and deal with antifa since
our government at any level does not appear to have the sense or spine to do it
themselves
Some of the other stuff we've encouraged, such as The EU, ETFs, Hi-Frequency Trading, Neil
Woodford and Deutsche Bank look likely to be highly effective vectors of short-term economic
destruction and destabilization
(Edited version of the speech given by the TJ Wormwood, Chief Demonic Officer –
Finance, Lord of 3rd Ring of the 7th Circle, to invited audience at Davos.)
Dear Colleagues,
As you all know, I've been wrecking finance for millennia. [Pause for effect]
Nearly every major big idea, evolutionary leap forward, invention and discovery has improved
the miserable lot of mankind only through their ability to monetise it. Forget the theft of
fire – being able to monetise fire by attracting pretty and willing mates around a warm
campfire, or cooking the food others have hunted, is what mattered. Strip out the noise, and
the rise of mankind is largely due to improvements in the efficiency and ease of means of
exchange.
From the realisation hunters could barter their furs for other goods, to the rise of complex
products to finance global growth – the innovation of financial markets has been a major
driver of success for the Other Side in raising the wellbeing and prosperity of mankind. Pretty
much anything that holds back or disrupts trade, increases costs and holds back services is
naturally positive for our goal of global destabilisation.
So, here is the big plan:
Since 2007 we've been turning the Other Side's successful innovation of financial markets
against them. Global Financial Markets are incredibly rich in opportunities to distort truth,
hide lies, and undermine mankind – generating immediate greed, envy, suspicion and anger.
We've uncovered previously unimaginable ways in which to financially screw the World with
consequences that impact everyone.
We've overlaid the programme with our mastery and understanding of temptation, human greed,
avarice and pride, while adding subtlety and cunning. We merely suggest and advise. We are
facilitating the train-wreck of the global economy by destroying asset values while confounding
their understanding of money and wealth – the pillars of their society.
At its simplest form we are manipulating and driving constant market instability to keep
mankind distracted. Uncertainty clouds their future expectations – so we keep it raining.
A Mortgage crisis one year, followed by a Sovereign Debt crisis the next, spiced with a couple
of bank failures, and threats of global trade war. Overlay with confusion and distraction such
as social media, fake news, Bitcoin and populism, and it all works rather well.
Keep their leaders arguing. Keep the blame game going.
Our success can be seen in current financial asset prices. These are now hopelessly inflated
and distorted by foolish post financial crisis policy decisions. They are bubbles set to pop.
Empower the regulators and bureaucrats to compromise finance through zealous over-regulation,
making banking safer by destroying it. Usher in a new era of trade protectionism, the end of
Free Trade and increase the suspicion some countries are manipulating their currencies for
economic advantage. Sprinkle some dust of political catastrophe, the collapse of law, undo the
fair, just and caring society, while adding some eye of newt and complex environmental threats.
Make the rich so rich they don't notice, and the poor so poor they become invisible. If the
markets remain uncertain, then it distracts mankind from addressing these issues, making
society less stable!
There as some things we're really proud of, including the Euro, Social Media, Investment
Banks, the Tech Boom, and especially Quantitative Easing (which is still delivering confusion
and pain). New Monetary Theory could prove even better – it shows tremendous potential to
thoroughly unsettle confidence in money. Cybercurrencies are particularly fun – despite
coming up with the idea, neither we, nor even the distinguished members of our panel of eternal
guests, understand the why of them. They are libertarian nonsense – so, naturally we
continue to encourage them as get-rich-quick schemes, but they also further undermine
confidence in money and government. We made something up in a bar one night and called it a
Distributed Ledger - the humans ran with it and invented Blockchain, whatever that might
be..
Some of the other stuff we've encouraged, such as The EU, ETFs, Hi-Frequency Trading, Neil
Woodford and Deutsche Bank look likely to be highly effective vectors of short-term economic
destruction and destabilisation, triggering systemic market events and regulatory backlashes
across markets. We are only now exploring the full potential of market illiquidity to rob
billions of pensioners of their savings.
We've persuaded investors to overturn proven tried and tested investment strategies and
wisdoms, nurturing a whole range of overpriced unprofitable US Tech "Unicorn" companies which
we are confident will prove utterly over-hyped and largely worthless. The success of social
media, data mining and new tech has increased levels of dissatisfaction and envy –
especially in our target younger demography.
The way we successfully pinned the blame on banks for the Global Financial Crisis –
despite the fact it was people who wanted mortgages to buy houses and fast cars - ensured
global regulators would over-react. We've allowed regulators to focus on banks while we target
the next financial crisis in other parts of the financial ecosystem.
Regulators forced the banks to de-risk. But risk does not disappear - it just goes somewhere
else. While banks understood risk and had massive staffs to manage risk, risk is now
concentrated in the hands of "investment managers" who are singularly ill-equipped to withstand
the next credit crunch and global recession, (which we've planned for next October – Save
the Date cards have been sent).
We are particularly pleased that many banks now exceed the 2.3 compliance officers for every
profitable banker ratio. Compliance and regulatory costs now exceed 10% of income at some
European banks – a stunning success and substantially decreasing the efficiency of
banking and exchanges.
We've some great new financial ideas we are still experimenting with, some of which show
great promise for further weakening society. Facebook Money is going to be a cracker, and I
particularly like the Spaceship to Mars project if only they knew what awaits them
By hiding inflation in the stock market, we assisted the accumulation of massive wealth by a
tiny percentage of the population to ferment income inequality dissatisfaction. When capital is
concentrated and the workers under the cosh, it creates all the right conditions for weak
disjointed government to aid and abet the rise of destabilising populism.
It's highly satisfying to watch the instability we've created in financial markets drive
fear and distrust across society. The debt crisis we engineered led to global financial
austerity, job insecurity, and rising inequality. We were surprised how easily we pushed the
Gig economy concept to further exploit and cow workers through regulators and authorities
– they barely noticed. Over this we've layered whole new levels of anxiety such as the
unknowns of data theft, the rise in envy coefficients through social media, fake news while
fuelling social distrust through resentment.
We've managed to persuade Governments to follow damaging and contradictory policies. As
society reeled in the wake of the financial crisis, we persuaded policy makers to cut back
spending through "austerity" spending programmes, simultaneously bailing out bankers while
flooding the financial economy with free money through Quantitative Easing.
Effectively we've split the world into two economies. A real economy which is sad, miserable
and deflating, and a financial economy that's insanely optimistic, massively inflated and ripe
to pop on the back of free money.
The resentment, instability, fear and general sense of decay has paid dividends in our drive
to break society by undermining the credibility of the political classes. Our approach to
politics has been simple – deskill the political classes, reduce their effectiveness as
leaders, while engineering economic, social and financial instability to drive rampaging
populist politics – just like in 1932! Populism may ultimately prove short-lived, but
it's difficult to see how the political classes will recover their power in time to reverse the
damages being done to the global environment.
While markets have burned, society become increasingly riven, and politics has failed, we've
distracted the humans from the rising levels of carbon dioxide in the atmosphere which
threatens to create global warming and rising sea levels, while plastics poison the oceans and
soil erosion threatens agriculture.
Now I love the ravenous hunger and sharp pointy teeth of polar bears as much as the next
demon, but needs must... needs must. I was also rather fond of the dinosaurs...
Our approach to ensuring destructive climate change has proved very effective. We've
supported, financed and advised the loudest green lobbies to ensure their message looks
ill-considered, wrong and economic suicide. We also paid big bucks to fund the loudest climate
change deniers. Our innovation of fake news to discredit and mitigate anything positive means
climate change remains a crank topic – even as our polar bears drown.
Meanwhile, through our dominance of global boardrooms and investment firms, we've made sure
that large corporates have bought-out and stifled new technologies that could solve the
environmental crisis.
Our future looks great – because their future is bleak!
The overwhelming correlation between austerity and Brexit
Jeff Spross
July 22, 2019
Across the pond, the Brexit disaster continues to unfold in newly disastrous ways. Theresa
May has resigned as prime minister, and the Trump-esque Boris Johnson looks like a lock to
replace her. Parliament members -- up to and including Johnson's own fellow Conservatives --
are panicking that the new prime minister may try hardline tactics to force Brexit through,
plan or no plan.
At this point, predicting how this mess will end is a fool's errand. But there are still
lessons to be learned from how it began.
In particular, the Conservatives might want to look in the mirror -- and not just because
it was their government that called the Brexit vote in the first place. It turns out the
brutal austerity they imposed on Britain after the global 2008 financial crisis probably goes
a long way towards explaining why Brexit is happening at all.
In the run-up to the Brexit referendum in 2016, much of the campaigning in favor of
"Leave" was unabashedly racist. Hard-right political groups like the U.K. Independence Party
(UKIP) painted a picture of native Britons overrun by hordes of foreign immigrants that were
straining the country's health care, housing, public services, jobs and wages to the breaking
point. The thing is, the racism was a particular poisonous way of framing a very real
underlying economic fear: all those necessities really had become harder to come by.
Yet, as it is in America, actual evidence linking influxes of immigrants to rising
scarcity in jobs and wages and other services is scarce. But something else had also recently
happened that could explain why hospitals and schools were closing and why public aid was
drying up: massive cuts to government spending.
A decade ago, the aftershocks of the global financial crisis had shrunk Britain's economy
by almost 3 percent, kicking unemployment up from 5 percent to 8 percent by 2010. Under
then-Prime Minister David Cameron, the Conservatives in power concluded that "confidence"
among investors was necessary to restore economic growth -- and that meant cuts to government
spending to balance the budget.
Thus the Conservatives pushed through a ferocious austerity package: Overall government
spending fell 16 percent per person. Schools, libraries, and hospitals closed; public
services like garbage collection ground to a halt; poverty shot up; and homelessness doubled.
Despite unemployment staying stubbornly high and GDP growth staying stubbornly low -- in
defiance of their own economic theory -- the Conservatives crammed through even more
reductions in 2012. "It is hard to overestimate how devastating Cameron's austerity plan was,
or how fast it happened," the British journalist Laurie Penny observed. A United Nations
report from last year called the cuts "punitive, mean-spirited, and often callous."
But the damage was not evenly distributed across the country. At the district level --
Britain's units of local governance -- the reductions in spending ranged from 6.2 percent to
an astonishing 46.3 percent from 2010 to 2015. The districts that were already the poorest
were generally the hardest hit.
These differences across districts allowed Thiemo Fetzer, an associate professor of
economics at the University of Warwick, to gauge the correlation between the government cuts
and whether a district voted Leave or Remain. "Austerity had sizable and timely effects,
increasing support for UKIP across local, national, and European elections," Fetzer wrote in
a recent paper. He found that UKIP's share of a district's vote jumped anywhere from 3.5 to
11.9 percentage points in correlation with austerity's local impact. "Given the tight link
between UKIP vote shares and an area's support for Leave, simple back-of-the-envelope
calculations suggest that Leave support in 2016 could have been easily at least 6 percentage
points lower," Fetzer continued. As tight as the Brexit referendum was, that alone could have
been enough to swing it.
Other studies have shown links between how a local British community's economic fortunes
fared and how it voted for Brexit as well. Economists Italo Colantone and Piero Stanig found
that support for Leave was "systematically higher" in the regions of the country hit hardest
by trade with China over the last three decades. Another analysis by Torsten Bell showed a
strong correlation between British income inequality as of 2015 and Brexit support, with
higher local vote shares for Leave the lower the local incomes were. (It's worth noting the
Bell didn't find a correlation with Brexit when he looked at how local incomes changed from
2002 to 2015, but that's also a weird time frame to choose, as it mashes together a period of
wage growth before 2008 with a major drop afterwards.)
Inequality in Britain had been worsening for decades, as the upper class in the City of
London pulled further and further ahead of the largely rural working class, setting the stage
for Brexit. And then austerity fell hardest on the shoulders of the latter group, compounding
the effect.
"Individuals tend to react to the general economic situation of their region, regardless
of their specific condition," Colantone and Stanig wrote. But Fetzer was able to break out
some individual data in his analysis of austerity, and he found a correlation with Brexit
votes there as well. Individual Britons who were more exposed to welfare state cuts -- in
particular a reduction in supports for housing costs -- were again more likely to vote for
UKIP. "Further, they increasingly perceive that their vote does not make a difference, that
they do 'not have a say in government policy' or that 'public officials do not care,'" Fetzer
observed.
It isn't that the economic dislocation of the 2008 crisis and the ensuing austerity crunch
made Britons more racist. By all accounts, half or more of the country has consistently
looked askance on immigration going back decades. (Indeed, international polling suggests a
certain baseline dislike for immigration is a near-universal human condition.) What changed
in the last few years was the willingness of certain parts of British society to act
politically on those attitudes. And that, arguably, is where the economics come in.
Work from the Harvard economist Benjamin Friedman is instructive here. He found that
periods of economic growth, where people feel the future is bright, make national populations
more open, generous, and liberal. Times of economic contraction and stagnation have the
opposite effect.
The British people, like everyone everywhere, are a mix of good and evil impulses. But by
decimating public investment in a self-destructive quest for investor-led growth, the British
government created a monster from those impulses. And the reckoning for that terrible error
is still unfolding.
if - what should I call them? centerists? - like Krugman, Kurt and EMike really cared about
racism they'd be in favor of ambitious programs so that voters' living standards rise.
Instead they push incrementalism and make excuses about Dems never having any power.
Tut! Tut! Tut! It's not politically correct for Democrats to talk about the economy,
inequality, and dislocation, is it? If people keep raising the issue, Democrats might be
forced into acknowledging problems they helped to create. Worse, they might have to craft a
coherent economic message that their Big Money puppeteers might not like! OMG!!!
Armageddon!!!
He presented no evidence, just pundicizing based on priors.
Well I looked and could find no change in growth, it has been declining steadily since
1990, and the ten years has been correspondingly dropping since 1980.
So, I I am supposed to see evidence, then cite the chart I am supposed to look at. We are
tired of useless pundicizers.
No, he would have cited evidence.
If he had any brains he would have recognized that we got the secstags going around, meaning
the one cannot just look at the eight year recession cycle, one has to look at the full
monetary cycle.
It is easy to tell the dufas among economists, they never look at nor cite any data.
For example, Krugman ignored the fact that Obamacare raised monthly taxes about $500 per
household, lost four elections, proved himself a dolt and now want to write off Obamacare.
Never once did Krugman make any attempt to correlate the Obamacare taxes with election
losses, not once. He preferred the delusion, same as most of our favorite economists, I can
count the one who actually look.
As Kurt said, being delusional hysterical freaks who send hundreds of billions to wealthy
people then complain? Stupid,stupid stupid.
You are exactly right here - Obamacare subsidies should have tapered off or been taxed away
around the top 20% of income rather than the top 60. Big mistake - but it was a compromise to
get several republicans to vote yes, but they (the Rs) negotiated in bad faith and then
didn't do what they promised. But hey - when have the H brothers let facts get in the way of
what they know, know, know about me.
Does the New York Times Have an Editing Program that Automatically Puts "Free" Before
"Trade?"
By Dean Baker
Readers must be wondering because it happens so frequently in contexts where it is clearly
inappropriate. The latest example is in an article * about the state of the race for the
Democratic presidential nomination following the second round of debates.
The piece told readers:
"After a few candidates used the Detroit debate to demand that Mr. Biden account for Mr.
Obama's record on issues such as deportations and free trade, Mr. Biden was joined by some of
the former president's advisers, who chastised the critics for committing political
malpractice."
The word "free" in this context adds nothing and is in fact wrong. The Obama
administration did virtually nothing to promote free trade in highly paid professional
services, like physicians services, which would have reduced inequality. It only wanted to
reduce barriers that protected less educated workers, like barriers to trade in manufactured
goods.
And, it actively worked to increase patent and copyright protections, which are the
complete opposite of free trade. These protections also have the effect of increasing
inequality.
Given the reality of trade policy under President Obama it is difficult to understand why
the New York Times felt the need to modify "trade" with the adjective "free." Maybe it needs
to get this editing program fixed.
The Democratic leadership and their megaphones in the media refuse to consider the
possibility that 'free' trade deals had anything to do with rising income inequality and the
resentment that led to Trump's election. It's much easier to promote the notion that hapless
Hillary's loss could be pinned on Putin or on racism and to dismiss Trumps voters as hopeless
deplorables.
However, Dean Baker noted last week: "The basic point is a simple one that has a long
pedigree in economics dating back to the famous Stolper-Samuelson trade theorem. The United
States has relatively more highly-educated workers (college degree or more) than developing
countries and relatively fewer less-educated workers (less than a college degree). This means
that when we open trade to China and other developing countries, we would expect to see more
highly educated workers benefit and less highly educated workers lose.
We saw this story in action in the last decade in a really big way. From 2000 to 2007 we
lost 20 percent of all manufacturing jobs in the United States. (This is before the Great
Recession; the job loss was due to the explosion of the trade deficit in these years, not the
collapse of the housing bubble.) We lost 40 percent of the jobs held by union members in
manufacturing in these years.
It is important to remember that the Stolper-Samuelson prediction on non-college educated
workers being losers (roughly two-thirds of the labor force) is a balanced trade story. The
picture is of course worse when the U.S. runs a large trade deficit, since most of what we
import is manufactured goods, a sector which employs a disproportionate number of non-college
educated workers." http://cepr.net/blogs/beat-the-press/the-u-s-china-trade-war-will-workers-lose
This theory is bolstered by a Brookings report: In "The Decline of the U.S. Labor Share,"
authors Michael Elsby of the University of Edinburgh, Bart Hobijn of the Federal Reserve Bank
of San Francisco, and Aysegul Sahin of the Federal Reserve Bank of New York find that the
decline of the labor share, which has been driven by a decline in the share of payroll
compensation in national income over the last 25 years, is likely due to the offshoring of
the labor-intensive component of the US supply chain. https://www.brookings.edu/bpea-articles/the-decline-of-the-u-s-labor-share/
Back in 1992 many Democrats opposed NAFTA, but Bill Clinton triangulated with Republicans
to get it passed. Then Clinton signed China PNTR, granting China full access to WTO,
whereupon the great sucking sound of jobs going to China began at full throttle.
It was a neat trick that Republicans played--let Democrats take the fall for the eventual
unpopularity and resulting resentment for the adverse effects of 'free' trade. Surprisingly
enough, the corrupt, sclerotic Team Pelosi still embraces 'free' trade, basically serving up
the Rust Belt to Trump on a silver platter.
And people who should know better, think Krugman, still find little to criticize about the
way 'free' trade was implemented, despite rising inequality and right-wing populism that it
engendered. Back in 2000 Krugman even had the chutzpah to claim that 'free' trade would be
good for labor! Such behavior tends to beg the question of whose side the Democratic
leadership and Krugman and his ilk are really on hint: Wall Street really loves 'free'
trade.
The political economic establishment is replete with diverse but largely complementary
motives. Global humanists raise the standard of living in poor countries while wealthy
capitalists collect rents from the arbitrage of lower standards of living in poor countries.
Establishment elites all have their price, but not all have the same price.
Yet, diverse elites hanging out together is more fun than a backyard barbeque with factory
workers no matter how good the barbeque and coleslaw is. Coleslaw does not pair well with
caviar, at least not real caviar, the kind made of fish roe. Cowboy and cowgirl caviar is
another thing entirely, pairing well with barbeque and coleslaw as long as you have some
tortilla chips too.
It is a rainy day here today and I have not had brunch yet.
"Global humanists raise the standard of living in poor countries "
maybe b/c it takes very little to raise up the global poor, but have you seen what
happened in Greece and Puerto Rico?
These places like Mexico should have moved to first world status after the Cold War ended
but are still stuck and getting worse.
I think the global situation is more of a mixed back. Countries are going authoritarian
b/c of neoliberalism: Putin, Turkey, Trump, Brexit, Hungary, etc.
I like to say about immigrants and refugees. At least the jobs they're working are here
and not in China. Which means they're spending the money they earn here and not in China.
'Free' trade was not advertised as being a zero sum game. It was supposed to have been an
example of large benefits and small losses on both sides.
However, the way it was designed by those who designed it (chiefly multi-nationals), the
enormous benefits got captured by a small minority, while a large majority suffered losses,
at least in the United States.
Sad to see that the 'free' trade zealots still refuse to do anything constructive to
mitigate the losses, or even acknowledge that there were major adverse effects and so we have
Trump as a result
Yes, indeed. Multinational corporations perversely redefined comparative advantage to mean
global arbitrage opportunities against labor and regulatory standards. Low wages buy poison
air and water while corporations just collect the rents.
"Yes, indeed. Multinational corporations perversely redefined comparative advantage to mean
global arbitrage opportunities against labor and regulatory standards. Low wages buy poison
air and water while corporations just collect the rents."
Which corporations exactly have or are extracting high rents from pollution in China or
India or Africa in ways that have not profited you personally?
The only big rent seeker related to pollution are big oil, and its been the opposition to
a high carbon tax in the US that's failed to drive out pillage and plunder rents.
If Trump were true to his rhetoric, his first tariff would have been $50 a barrel on
imported oil based on Saudi Arabia taking advantage of stupid Americans, getting rich selling
US oil and then forcing US to spend trillions waging wars to protect Saudi rent extraction
screwing Americans.
China, in contrast, has built so much capital, it's destroyed most global corporate rent
seeking. China is, as a national policy, determined to bankrupt big oil, Saudi Arabia,
etc.
China is "stealing" US corporate monopoly power by creating competing corporations which
price at costs, ie, at zero rent.
Some argue that hiring employees of US global corporations is theft.
But that was something that corporations in California accused each other of doing in the
90s.
And something employers did as industry rose in the US, leading to company towns, and
goons to prevent workers from stealing from their employer by setting themself up in business
based on their unique skills and knowledge honed by working for big business.
Eg, Tesla "stealing" from Edison by going to work for Westinghouse.
US businesses invented golden handcuffs in the era defined by IBM. It was California that
challenged the golden handcuff corporate establishment.
What did these Californians promise? Wealth from high rent extraction.
But China has destroyed that California rent extraction gravy train as a means of stealing
from each other.
Chinese Apple suppliers face toxic heavy metal water pollution charges
Foxconn denies allegations, Apple reiterates zero-tolerance stance
By Rik Myslewski 5 Aug 2013 at 18:54
Chinese environmental regulators have launched an investigation into two Apple suppliers
– one being the giant iDevice assembler Foxconn – in response to allegations that
the companies' factories are using nearby rivers as dumping grounds for huge amounts of toxic
heavy metals.
"If you're severely exceeding emissions standards, then we will punish you," Chinese
environmental regulator Ding Yudong told The Wall Street Journal, speaking of the
investigations into Foxconn and UniMicron.
Both companies are based in Taiwan, are listed among Apple's suppliers, and have
manufacturing plants in mainland China. The factories in question are in the industrial area
of Kushan, located between Shanghai and Suzhou.
According to the WSJ, the investigations were sparked by allegations from Chinese activist
and 2012 Goldman Environmental Prize winner Ma Jun, a director of China's Institute of Public
& Environmental Affairs (IPE).
Four other environmental groups joined the IPE in accusing Foxconn and UniMicron of
dumping heavy metals into the Huangcangjing and Hanputang rivers. Those two rivers flow into
the Yangtze and Huangpu rivers, which supply Shanghai with drinking water.
Foxconn has denied the charges, telling Bloomberg that its Kushun factory follows all
applicable environmental regulations. Plant manager Yang Jixian was said much the same,
according to China's Xinhua News Agency. UniMicron remains mum.
Apple spokeswoman Kitty Potter told Bloomberg, "We do not tolerate environmental
violations of any kind and regularly audit our suppliers to make sure they are in
compliance."
The WSJ interviewed a few Kushan locals about the levels of pollution in nearby rivers.
One, Zhao Pingxing, said, "We used to catch cuttlefish there, and it was so clear we could
see a meter down," he said – and told the WSJ that although he occasionally fishes
there these days, he doesn't eat what he catches.
Another, identified only by his surname Yao, said, "Even if my hands were dirty, I
wouldn't wash them in this water."
That water, however, is second in line in China's environmental cleanup plans. Late last
month, the Middle Kingdom announced that it would spend $277bn on an effort it's calling the
Airborne Pollution Prevention and Control Action Plan in response, no doubt, to such events
as the choking "Airpocalypse" that blanketed the Beijing area this January.
Water pollution, however, is on the Chinese government's list for cleanup efforts over the
next five years, according to China Daily. Perhaps after that program begins, the regulations
that Foxconn, UniMicron, and others will face will be more stringent, Zhao will be able to
eat his fish, Yao will be able to wash his hands, and Potter will no longer have to issue
canned "We do not tolerate environmental violations" statements.
*
[US firms can collect rents just by sourcing from Chinese firms that pay low wages and
pollute just as well as they can exploit their hands-on partnerships. Rents laundered at arms
length are no less destructive to either exploited workers or displaced workers. Most
partnerships between Chinese and US firms places the direct exploitation in Chinese hands
while most of the rents go to US firms.
I got the money, honey, if you got the crime.]
Rising returns to US capital demonstrate that the rentier is far from dead. ]
I'm reading aboout US coal companies declaring bankruptcy to shed their mine reclamation
costs, while already having shed hundreds of billions in coal pollution from mining
techniques since circa 1980, plus coal ash pollution, also largely since the 80s.
The US has burned coal for two centuries, but swag, 40% of the coal burned in the US has
been since the passaage of tthe clean water and clean air acts.
China has acted several times faster, and punished pollution violations much harsher, than
the US, England, ....
Understood, but when I refer to pollution then I am not just referring to CO2 or even
primarily CO2 or even CO2 at all. Anthropogenic climate change is a much different beast that
biological and chemical pollutants that poison the water and air. We are all dying slowly
anyway and at least we will not be lying cold in the ground.
Don't get me wrong though. I have long believed that climate change poses a serious threat
and possibly even an existential risk to much of humanity. OTOH, semantics prevents me from
lumping a dangerous excess of otherwise beneficial and necessary atmospheric compounds
together with pathogens. We breath out CO2 and plants make sugar from it using
photosynthesis. It is an essential part of the nature of living things.
I agree on all of this - however, I don't think that the way to solve this is by destroying
free trade. Instead, fix the distributional and environmental issues and redistribute the low
marginal utility $.
You are most likely correct to the extent that anything at all will be done to correct for
the use of trade as a tool of financial arbitrage in global labor and pollution markets.
OTOH, in some far distant time that may not be as far off as we would like to think, the
economy of localization of production will reassert itself against greatly rising
transportation costs. Of course, that will not happen all at once and it will come about in
move to optimize transportation of goods to market and resources to production that will be
accompanied by much substitution in production and consumption.
However, the world would have been better off if developed nations would have shared their
capital assets with developing nations to the ends of optimizing transportation and expanding
product development around the world from the get go. We once had the opportunity to make a
better world, but now we are faced only with the opportunity to survive the world that we
made instead - or not.
"Free' trade was not advertised as being a zero sum game. It was supposed to have been an
example of large benefits and small losses on both sides."
You are clearly very right wing in demanding a billion dollars in benefits at a dollar in
costs because you reject zero sum as a hard rule in all trade, whether in a store, a
community, within a nation, and between nations.
West Virginia has suffered, not from global trade, but because of local trade. Global
trade has slowed its economic decline because it can produce met coal which costs customers
ten times steam coal.
US policies that are supoosedly to cut costs, increased "costs" to WV workers, by killing
their jobs, which is a lower cost requiring lower benefits, eg less income to keep paying
higher living costs. Cutting living costs is not a good thing when its forced on you by lower
incomes.
If the US economic policy was to hike costs, say hiking taxes, fees, tolls, fares to pay
to build better transportation capital, then demand for steel in the US would be so high that
WV would be mining several times as much met coal, which costs consumers ten times as much as
steam coal.
"However, the way it was designed by those who designed it (chiefly multi-nationals), the
enormous benefits got captured by a small minority, while a large majority suffered losses,
at least in the United States."
Strange you consider at least 250 million Chinese workers to be a minority relative to a
much smaller number of American workers who are worse off from the left and right worship of
cutting living costs.
Zero sum is axiomatic, so lower living costs means lower benefits, especially lower wages.
High wages are a costly benefit that increase living costs.
"Global humanists raise the standard of living in poor countries while wealthy capitalists
collect rents from the arbitrage of lower standards of living in poor countries.
Establishment elites all have their price, but not all have the same price."
But as a "global humanist", the goal is to raise the living costs of poor nations up to
the living costs of say the US in 1950 in two generations instead of the maybe five
generations it took the US to get to 1950 living costs.
The only way to increase living costs is some agency which pays more workers more money to
work more. In the US, the agents were the railroad building from 1840 to 1990, the good roads
building fromm1920 to 1970, the lifting of education standards from 8th grade circa 1920 to
14th grade by 1970.
What confuses conservatives is the concept of price and cost. A lower price increases
costs. The current cost of going to the moon is zero because the price to send the first
person to the moon since 1972 is at least $10 billion, and a realistic business plan sets the
cost at $25-50 billion. A price of $10 million to go to the moon and return a year later will
result in massive increased costs to humans who pay the lower price of living on the moon for
an extended time.
Global trade increases living costs for poor people in order to improve their lives. But
increasing their living standard requires paying them to work produce more of somethings than
they can possibly consume, which is then sold to nations capable of producing more high cost
and price items than the global economy can afford.
For the US to be able to produce 10 billion bushels of grain when the global market is
only able to pay for 8 billion is a big problem. The pre-globalization solution was to kill
jobs in poor naations by the US government dumping grain on poor nations at a price of
zero.
Would you advocate isolationism that creates a great depression, a la the 20s and 30s US
economic policies. No exports, no trade, thus forcing costs down as prices are forced down
with higher and higher unemployment?
Acknowledging and pricing macroeconomic uncertainties - Hansen and Sargent
False pretences of knowledge about complicated economic situations have become all too
common in public policy debates. This column argues that policymakers should take into
account what they don't know in their decision making. It describes a tractable approach for
acknowledging, characterising, and responding to different forms of uncertainty, by using
theories and statistical methods available at any particular moment.
---------
Yes, starting about 10,000 years ago.
After our current MMT, we will get the same false pretence, we will have a bunch of AOC
geeks on this blog explaining things have been fixed,'We won't do it again' to quote Ben,
among the many thousands of false pretencers. We will hear from the 'Uncle can fix it later'
crowd. "This time is different' chants another tribe. Someone will put up a blog, and we will
recite talking points absent any evidence.
The delusionals and their preachers do not go away, and neither do their followers. It is
like a religion, we know it is BS, but it keeps our hysteria in check.
Russiagate is both sign of degradation of neoliberal elite and weakening of neoliberal social system now is deep social crisis
as "rising tide does not lift all boats" and the level of inequality achieved destabilized the society.
Notable quotes:
"... There is a increasing body of evidence to suggest that Trump-Putin was a trumped up psy-ops campaign designed to demonize Russia (and Trump.) Some if Mueller's allegations rest on very shaky grounds. ..."
"... It does not take any courage at all to call Donald Trump a race baiting big stupid orange buffoon. It also accomplishes nothing to blame the Russians for his election. Well that does accomplish something. It makes the Democratic Party look puny, weak, and disconnected from the lives of the majority of US citizens. I won't press too hard on that part though because it was already established fact long before Donald Trump entered politics. ..."
Neoliberals/neocons like you are so detached from reality that it hurt. You better stop
posting as you understand nothing and can learn absolutely nothing. You views are essentially
frozen for the last three years and you definitely are unable to evolve above the level of a
typical neoliberal propaganda.
Neoliberal ideology is discredited since 2008 and neoliberal elite lost the control of the
electorate via usual "divide and conquer" identity politics in 2016; the neoliberal economics
entered the state of "secular stagnation" (according to Summers) and chances that it can
escape this state are non-existent.
Why it is so difficult to understand the USA is facing the crisis of neoliberalism much
like the USSR faced the crisis of Bolshevism since 1960th.
And that Trump election was direct result of this crisis and the betrayal of working and
lower middle class by "Clintonized" Dems, which become essentially Republican light (or
"party of soft neoliberals") as well as the second war party (and being a war party means
that you do not need to win the elections, MIC rules the country in any case). That's why
Russiagate was launched to patch the cracks in the neoliberal façade and as a smoke
screen for neoliberal Dems political fiasco.
And Paine is right: after Bill Clinton sold Democratic Party to Wall Street it did not
care one bit about the workers. Clinton's idea was that workers have nowhere to go. He was
right for 20 years or so but then Dems were trumped ;-)
IMHO the best way for Neoliberal Dems in 2020 is to commit suicide by selecting
semi-senile neoliberal Biden (who, essentially, is "Hillary light", especially in foreign
policy ). This way the party can get rid of Clinton mafia.
But I think Warren has a chance in this cycle despite all her blunders.
As a side note, I still hope that war criminal Bill Clinton will be tarred and feathered
and then lynched with Epstein. And please note that unlike Epstein, Bill can't claim asylum
in Israel.
P.S. Please do not reply to this post. You can't say anything useful or constructive on
the topic.
You have no real evidence for that fact, just supposition from some set of assumptions. Yet
the articles posted continue to identify limits to what Uncle can do. like pay attention to
demographics on entitlements, Malthus lives on,just one of the articles finding evidence of
limits, compared to your invention.
You keep missing the fact that the white wage class has repeatedly voted to destroy unions,
to have state level republican control and to vote in every model legislation that ALEC and
Mackinaw Center hand them. Also, under normal (ie: when Rs didn't use procedure to prevent
everything) circumstance, Ds really haven't had much power nationally since Reagan. But do go
on.
The Dems failed to provide a progressive
Wage class benefiting alternative
To hate and self destructive spite
For
40 years b4 Trump won the rust bowl derby
Racism is either a matter of degrees or, if you prefer, we are all racists. That is exactly
what that joke line "I don't see color" means. When black people are racist and they get
special treatment for being racist then that is about the most racist thing that I see around
today that is still widespread.
The fraction factions are disgusting and soft racism is
pervasive. But what many liberals do not get is that just calling people out (as they say) as
racist really leads to more racism rather than less. If you want peer pressure to work for
you, then first you must work to establish yourself as peer.
I understand that you are not the only graduate of the idiot school of childish
psychology, but you are a consistent advocate of the practices as is your little nemesis
ilsm.
I really strongly disagree with this. I try really hard to both notice and to correct any
engaging in implicit bias. I also reject the idea that a person can be measured by the hue of
their skin, where they worship (or if they do) and their sex or sexuality. My midwestern
sensibilities tell me that what really matters is how hard you try and how decent of a human
being you are. I don't see how you can 1. think that the Trump/Russia thing is a hoax after
reading the Mueller report, 2. think that Trump belongs in office and is not doing serious
irreparable damage to the United States and still be a good person. I also don't see how you
can be anti-racist and support Trump. In fact, I think this is axiomatic.
I have provided the footnote about 50x. The report plainly states that there was coordination
between known actors of the Russian government and Trump campaign officials, and that they
could not get documentary evidence BECAUSE OBSTRUCTION - which, btw where the headline
charges against both Nixon and Clinton. Also - Mueller SPECIFICALLY said that there is no
legal standard for collusion and that there was likely conspiracy, but obstruction.
Qualifying to be anti-racist - against racism, racist policy, structural racism
overtly.
Faux evidence? WTF are you talking about.
You support a racist. You cannot support a racist implementing racist policy measure in an
extra legal way without yourself tacitly agreeing that said racism is just fine. Again - this
is axiomatic and I am sorry that shining a light on it hurts your feelings, but you can
change. I invite you to.
Such inflammatory charges!!! Meanwhile Democrats have no urgency about investigating this.
Why the dillydallying? Because that's what Democrats are genetically programmed to do? Or
because there is no there there?
There is a increasing body of evidence to suggest that Trump-Putin was a trumped up
psy-ops campaign designed to demonize Russia (and Trump.) Some if Mueller's allegations rest
on very shaky grounds.
I think that personal criticisms of an ant does not amount to a hill of beans, but rather
reduces one to being an ant-man. I don't care for all those holes in my yard and I certainly
do not want to see a long file of ants headed towards my pantry, but I have no personal
accusations that are worth leveling against ants. I do not even squish a bug that stays out
of my house. I let the ant lions that surround my home take care of most of the ants and when
that fails and some start heading inside my home then I spray Raid in their path.
I advise everyone to always make friends with everyone that they do not want to kill. A
key part of that is to know and observe one's own boundaries when dealing with others. One
can criticize an idea or an action without the implicit arrogance required to pass judgement
on others, which explicitly leads to most people not giving a damn what one has to say
anyway. I prefer to not back anyone into a corner unless I am holding a gun.
Yeah - okay. But when someone lies, dissembles, makes stuff up out of whole cloth all in
support of a person who has demonstrated repeatedly that they think that white is right -
they are racist. That's fine.
When ilsm has the courage and morality to call Trump what he
is, then I will give him quarter. Until then, he is as evil as they come in my book.
Evil comes in far more significant sizes than any anonymous blog commenter on an Internet
economics board frequented by a small group of nerds and geeks. If you believe that ilsm is
evil then you are lucky enough to have never encountered any real evil.
It does not take any
courage at all to call Donald Trump a race baiting big stupid orange buffoon. It also
accomplishes nothing to blame the Russians for his election. Well that does accomplish
something. It makes the Democratic Party look puny, weak, and disconnected from the lives of
the majority of US citizens. I won't press too hard on that part though because it was
already established fact long before Donald Trump entered politics.
Stages of capitalist development explain more than white papers and
propaganda can conceal. The relevant comparative period is 1990 - present (China/Russia)
versus 1950-1980 (US/West).
Ex-communist countries like Russia and China have experienced the same decline in the share
of public property, but starting from a much higher level of public wealth. The share of
net public wealth was as large as 70–80 percent in both countries in 1980, and fell
to 20 percent (Russia) and 30–35 percent (China) in 2015.
The Chinese share is higher but not incomparable to that observed in Western high-income
countries during the "mixed economy" period (1950–1980).
In other words, China and Russia have ceased to be communist in that public ownership is
no longer the dominant form of property. However, these countries still have much more
significant public wealth than Western high-income economies, due largely to lower public
debts and greater public assets.
Epstein and use of sex with underage girls to compromise politicians is a definite sign of the
collapse of the West. It's very much like what happened in the late Roman Empire.
When Rome was in its ascendancy and at its height, the leaders of Rome were all native
Romans or at least native Italians. If they were born in other parts of the Empire, they were
of Roman culture and had Roman names and Roman values. They had a stake in their
civilization.
But as time went on, all of this started changing.
By the time the barbarians invaded the Empire wholesale -- starting with the battle of
Adrianople in 378 AD -- the handwriting was already on the wall. Within 30 years, the
barbarians controlled the entire Empire.
The old political structure had completely collapsed. Native Romans were leaving the Empire,
going to barbarian lands, to avoid onerous taxation. The currency was worthless. The economy
was in a shambles. The military structure had completely collapsed. None of the soldiers were
Italians; they were all barbarians hired as mercenaries. Likewise, here in the US, few
Americans in the diminishing middle class want to join the military. The city of Rome itself
was sacked in 410 AD and it never really recovered.
International Man :
Economically, the US government continues to spend ever-increasing
amounts of money. In 2018 alone, the federal deficit was $779 billion -- a $113 billion
increase from the year before. Politicians on both sides of the aisle are falling over
themselves to offer new government freebies that could pay for college, medical care, and the
list goes on.
How does this play into the theme of US decadence?
Doug Casey : Well, whether you're an individual or a family or a country, when you live
above your means, you're almost by that very fact decadent. You're not planning for the
future.
But the US government's debt and reported deficits represent only current cash outlays, not
obligations in the form of future spending. If the deficits were represented with accrual
accounting -- which is what businesses have to do -- the annual deficits would probably be more
like $3 trillion.
Not to mention that interest rates are artificially suppressed to about 2% in the US. At
more normal levels of, say, 6%, the annual deficit would be about $800 billion higher. So the
financial situation is actually much, much worse than it seems.
On top of all this is the fact that these deficits come during a time of supposed recovery.
But the "recovery" has been ramped up by creating trillions of new dollars and allowing people
to borrow at effectively negative interest rates, certainly after inflation. This is all very
decadent.
Eat, drink, and be merry, for tomorrow we die. That's not the attitude of a rising
civilization.
The opposite of "decadent" is to be constructive, disciplined, forward-thinking, and
self-respecting. You produce more than you consume and save the difference.
That's exactly the opposite of what Americans are doing today.
We're completely decadent.
Small comfort that the Europeans are even worse off than we are.
International Man:
On an individual level, Americans are living beyond their means. Many
Americans have less than $1,000 in savings.
What does this say about a society?
Doug Casey: It augurs very poorly.
The average American is one paycheck from not being able to pay his rent. When the
distortions that have been cranked into the economy over just the last 10 years unwind and the
economy as a whole goes downhill again, there are going to be millions of people who can't pay
their rent. Many millions more are going join the 42 million Americans now living on food
stamps.
The social repercussions of this are predictable.
The population will get angry; many will go into the streets and riot. They're going to vote
overwhelmingly for some politician who says that he -- or quite possibly she -- can cure all
their problems by giving them free stuff stolen from rich people.
In a way it's understandable, because the fact of the matter is the rich have indeed been
getting richer at an accelerating rate.
Why?
Because they're the ones that get to stand next to the firehose of money that's coming out
of Washington. They get it first; they get most of it. It's another sign of a society in
decline: the dominance of cronies. That creates a lot of class antagonism.
It's going to explode and be really ugly. Perhaps one thing keeping a lid on the situation
is the huge number of Americans on psychiatric drugs: Zoloft, Prozac, and a hundred others.
Perhaps millions of others don't care as long as their internet connection enables them to play
video games.
International Man :
Aside from the financial aspect of decadence, what is happening
culturally and intellectually in the United States? For example, many Americans are rejecting
biological facts in favor of the politically correct fad of the day. Is this a sign of
decline?
Doug Casey : The PC types say there are supposed to be 30 or 40 or 50 different genders --
it's a fluid number. It shows that wide swathes of the country no longer have a grip on actual
physical, scientific reality. That's more than a sign of decline; it's a sign of mass
psychosis.
There's no question that some males are wired to act like females and some females are wired
to act like males. It's certainly a psychological aberration but probably has some basis in
biology.
The problem is when these people politicize their psychological peculiarities, try to turn
it into law, and force the rest of the society to grant them specially protected status.
Thousands of people every year go to doctors to have themselves mutilated so that they can
become something else. Today they can often get the government or insurers to pay for it.
If you want to self-mutilate, that's fine; that's your business even if it's insane. To make
other people pay for it is criminal. But it's now accepted as normal by most of society.
The acceptance of politically correct values -- "diversity," "inclusiveness" -- trigger
warnings, safe spaces, gender fluidity, multiculturalism, and a whole suite of similar things
that show how degraded society has become. Adversaries of Western civilization like the
Mohammedan world and the Chinese justifiably see it as weak, even contemptible.
As with Rome, collapse really comes from internal rot.
Look at who people are voting for. It's not that Americans elected Obama once -- a mob can
be swayed easily enough into making a mistake -- but they reelected him. It's not that New
Yorkers elected Bill de Blasio once, but they reelected him by a landslide. All of the
Democratic candidates out there are saying things that are actually clinically insane and are
being applauded.
International Man :
In fact, in the recent Democratic debate, candidate Julián Castro
even mentioned giving government-funded abortions to transgender women -- biological men. It
received one of the loudest bouts of applause from the audience.
That's not to mention that two other candidates spoke in broken Spanish when responding to
the moderator's questions.
Doug Casey: As you said, it got a lot of applause.
US presidential candidates speaking in Spanish would be very much like an ancient Roman
addressing the Forum in Gothic, not Latin. It's all over for a culture when it starts using the
language of its conqueror. In a restaurant here in Aspen, the owners have a sign in Spanish
that refers to the progress of the Reconquista -- the recapture of the American Southwest from
the Anglos. Perhaps someone will speak Arabic in the next debates.
I hate to sound defeatist, but it's all over for what was once known as American
civilization. The celebrity of AOC is indicative. How else could a 29-year-old Puerto Rican
waitress, poorly educated and not very bright, set the political tone for the whole
country?
International Man :
Is America's late-stage decadence a product of its political and
economic decline or vice versa?
Doug Casey : The decadence we see all around us is arising from every source. Cultural,
economic, and political. Cultural decline is the most basic area. Massive immigration of people
with different cultures, languages, and religions guarantee it. Especially if they're coming
because of free benefits. Many actually despise traditional American culture, as well as
holding the current culture in contempt.
Their views are then reflected in a corruption of the politics. We see that with the
apparent acceptance of the Squad -- although I prefer to call them the "Gang of Four." Politics
engenders economic distortions. Part of the problem is that politics completely dominates the
economy today.
For Trumpers to think that building a wall is going to change things is naïve. A wall
will be about as effective as a kid's sandcastle on the beach to hold back the waves.
"... Aggressive wars abroad pollute the domestic political discourse and breed hypernationalism, racism and xenophobia. The 18 or so years of war following the 9/11 attacks have seen this ostensible republic sink to new lows of behavior. ..."
"Empires in decline tend to behave badly. Indeed, whether British, French or Russian, the
twilight years of imperialism often brought brutal repression of subjects abroad, the
suppression of civil liberties at home and general varieties of brutality toward foreigners, be
they refugees or migrants.
Aggressive wars abroad pollute the domestic political discourse and breed
hypernationalism, racism and xenophobia. The 18 or so years of war following the 9/11 attacks
have seen this ostensible republic sink to new lows of behavior.
Aggressive wars of choice have ushered in rampant torture, atrocities in Iraq's Abu Ghraib
prison, indefinite detention at Guantanamo Bay, extraordinary rendition, drone assassinations,
warrantless wiretapping, mass surveillance of the citizenry...
It's all connected. The empire -- all empires -- eventually come home."
Maj. Danny Sjursen, An American Tragedy: Empire at Home and Abroad
"... The so-called paradox of freedom is the argument that freedom in the sense of absence of any constraining control must lead to very great restraint, since it makes the bully free to enslave the meek. The idea is, in a slightly different form, and with very different tendency, clearly expressed in Plato. ..."
"... Less well known is the paradox of tolerance: unlimited tolerance must lead to the disappearance of tolerance. If we extend unlimited tolerance even to those who are intolerant, if we are not prepared to defend a tolerant society against the onslaught of the intolerant, then the tolerant will be destroyed, and tolerance with them ..."
"My name is Ozymandias, king of kings: Look on my works, ye mighty, and despair!"
"As I turn 75, there's no simpler way to put it than this: I'm an old man on a new planet -- and, in case it isn't instantly
obvious, that's not good news on either score...
And I find myself looking at a world that, had you described it to me in the worst moments of the Vietnam War years when I
was regularly in the streets protesting, I would never have believed possible. I probably would have thought you stark
raving mad. Here I am in an America not just with all the weirdness of Donald Trump, but with a media that feeds on his
every bizarre word, tweet, and act as if nothing else were happening on the face of the Earth. If only...
If you had told me that, in the next century, we would be fighting unending wars from Afghanistan to Somalia and beyond I would
have been shocked. If you had added that, though even veterans of those wars largely believe they shouldn't have been fought,
just about no one would be out in the streets protesting, I would have thought you were nuts."
Tom Engelhardt,
TomDispatch
"The Babylonian starlight brought
A fabulous, formless darkness in;
Odour of blood when Christ was slain
Made all platonic tolerance vain,
And vain all Doric discipline."
William Butler Yeats
"The reason is partly because of a glitch in human cognition known as the just world hypothesis or just world fallacy, which
causes us to assume that if bad things are happening to someone, it's because that person deserves it. Blaming the victim
is more psychologically comfortable than seeing that we live in an unjust world where we could very easily become victim ourselves
someday, and we select for that comfort over rational analysis.
Like other cognitive biases, this one fundamentally boils down to our annoying psychological tendency to select for cognitive
ease over cognitive discomfort. It feels more psychologically comfortable to interpret new information in a way that
confirms our preexisting opinions, so we get
confirmation bias
.
It feels psychologically comfortable to assume something is true after hearing it repeated many times, so we get the
illusory
truth effect
. It feels more psychologically comfortable to believe we live in a fair world where people get what
they deserve than to believe we're in a chaotic world where many of the most materially prosperous people are also the most
depraved and sociopathic, and that we could be next in line to be victimized by them, so we get
the just world fallacy."
Caitlin Johnstone,
The Just World Fallacy: Why People Bash Assange and Defend Power
"
The so-called paradox of freedom is the argument that freedom in the sense of absence of any constraining control must lead
to very great restraint, since it makes the bully free to enslave the meek. The idea is, in a slightly different form,
and with very different tendency, clearly expressed in Plato.
Less well known is the paradox of tolerance: unlimited tolerance must lead to the disappearance of tolerance. If
we extend unlimited tolerance even to those who are intolerant, if we are not prepared to defend a tolerant society against
the onslaught of the intolerant, then the tolerant will be destroyed, and tolerance with them
."
Karl Popper
"And some of us who have already begun to break the silence of the night have found that the calling to speak is often a vocation
of agony, but we must speak. We must speak with all the humility that is appropriate to our limited vision, but we must
speak."
Martin Luther King,
A Time to Break the Silence
, April 1967
"What does it profit a man, to gain the whole world, but lose his soul?"
Trump definitely contributes a lot to the collapse of classic neoliberalism. He rejected neoliberal globalization in favor of using
the USA dominant position for cutting favorable to the USA bilateral deals. That undermined the role of dollar of the world reserve
currency and several mechanisms emerged which allow completely bypass dollar system for trade.
Notable quotes:
"... US President Donald Trump's ruthless use of the centrality of his country's financial system and the dollar to force economic partners to abide by his unilateral sanctions on Iran has forced the world to recognise the political price of asymmetric economic interdependence. ..."
"... A new world is emerging, in which it will be much harder to separate economics from geopolitics. ..."
US President Donald Trump's ruthless use of the centrality of his country's financial system and the dollar to force economic
partners to abide by his unilateral sanctions on Iran has forced the world to recognise the political price of asymmetric economic
interdependence.
In response, China (and perhaps Europe) will fight to establish their own networks and secure control of their nodes. Again, multilateralism
could be the victim of this battle.
A new world is emerging, in which it will be much harder to separate economics from geopolitics. It's not the world according
to Myrdal, Frank, and Perroux, and it's not Tom Friedman's flat world, either. It's the world according to Game of Thrones
.
It made me do a face palm. Somebody thought they had separated economics from geopolitics or power…or at least they wanted
people to believe that and the jig is up.
“One reason for this is that in an increasingly digitalised economy, where a growing part of services are provided at zero
marginal cost, value creation and value appropriation concentrate in the innovation centers and where intangible investments are
made. This leaves less and less for the production facilities where tangible goods are made.”
It depends on what you mean by value.
If value is dollars in someone’s Cayman Islands tax-free account, then value is concentrated in NYC and SF.
But if we follow Natural Law (Marx or Mohammed) and define value as labor, then this is exactly wrong. A Natural Law economy
tries to maximize paid and useful work, because people are made to be useful.
The digital world steadily eliminates useful work, and steadily crams down the wages for the little work that remains. Real
value is avalanching toward zero, while Cayman value is zooming to infinity.
He’s talking more about the whims of the stock market and of our intellectual property laws. For example the marginal cost
for Microsoft to issue another copy of “Windows” is zero. Even their revised iterations of the OS were largely a rehash of the
previous software. Selling this at high prices worked out well for a long time but now the software can practically be had for
free because competitors like Linux and Android are themselves free. So digital services with their low marginal cost depend on
a shaky government edifice (patent enforcement, lack of antitrust) to prop up their value. Making real stuff still requires real
labor and even many proposed robot jobs–driving cars, drone deliveries, automated factories and warehouses–are looking dubious.
Dean Baker has said that the actual investment in automation during the last decades has slowed–perhaps because expensive and
complicated robots may have trouble competing with clever if poorly paid humans. And poorly paid is the current reality due to
population increases and political trends and perhaps, yes, automation.
And even if the masters of the universe could eliminate labor they would then have nobody to buy their products. The super
yacht market is rather small.
>the distribution of gains from openness and participation in the global economy is increasingly skewed. …. True, protectionism
remains a dangerous lunacy.
Well “openness and participation” is looking like lunacy to the Deplorables for exactly the reason given, so what is actually
on offer here?
With useful physical labor being off-shored, first world citizens should all be made shareholders in the new scheme. We shall
all then become dividend collecting layabouts buying stuff made by people we do not know, see, or care about. If they object we
simply have the military mount a punitive expedition until they get whipped back into shape. Sort of like now but with a somewhat
larger, more inclusive shareholder base. It will be wonderful!
Are you sayin’ the lefty Social Wealth Fund concept is really just another way of replicating the same old bougie program of
domination and suppression?
I’m saying that it can be and historically, and that there are and have been multi-national systems of super exploitation of
peripheral, primarily resource exporting populations, relative to a more broadly distributed prosperity for “higher” skilled populations
of the center. This has been a common perspective within anti-imperialist movements.
The argument is not without merit. Is this a “contradiction among the people” where various sectors of a larger labor movement
can renegotiate terms, or is it some more intransigent, deeply antagonistic relationship is a crucial question. The exportation
of manufacturing to the periphery is disrupting the political status-quo as represented by the center’s centrism, political sentiments
are breaking away to the left and right and where they’ll land nobody knows.
Why is Iran such a high priority for so many US elites?
I was just reading this John Helmer below, like Pepe Escobar I’m not sure who’s buttering his bread but it’s all food for thought
and fresh cooked blinis are tastier than the Twinkies from the western msm, and this thought came to mind: Iran is the perfect
test ground for the US to determine Russian weapons and tactical capabilities in a major war context in 2019. That alone might
make it worth it to the Pentagon, why they seem so enthusiastic to take the empire of chaos to unforseen heights (depts?). Somewhat
like the Spanish Civil War was a testing ground for the weapons of WW2.
1. Because it has a lot of non US controlled Oil.
2. Because it is Central on the eastern end of the silk road.
3. Because it does not kiss the US Ring bearers hand at every opportunity, and the US is determined to make it an example not
to be followed.
But consider Saudi us relations… who is kissing who’s ring?
Or consider Israeli us relations… ditto.
We’re a thuggish whore whose favors are easily bought; bring dollars or votes. Or kiss the ring.
An environmental insight here. The world stands devastated. It has reached its carrying capacity for thoughtless humans. From
here on in we have to take the consequences of our actions into account. So when it is said, as above, that the dollar exchange
rate is more important than the other bilateral exchange rates, I think that is no longer the reality. There is only a small amount
of global economic synergy that operates without subsidy. The vast majority is subsidized. And the dollar is just one currency.
And, unfortunately, the United States does not control the sun and the wind (well we’ve got Trump), or the ice and snow. Let alone
the oceans. The big question going forward is, Can the US maintain its artificial economy? Based on what?
That is a factor that seems ignored by the philosophers who are the subjects of the headline posting. It is a great oversight,
a shoe which has been released and is now impacting the floor. “The best laid schemes o’ mice an’ men”
Donald Trump's election was considered the beginning of a dark era for the entire planet,
but could it possibly be the outcome of a well-thought-out plan set in motion decades ago?
Heartbreaking stories of American citizens who feel abandoned by the US federal government are
intertwined with one-on-one interviews with journalists, philosophers and political scientists.
An investigative, powerful documentary that attempts to detect how corporations gradually took
over politics, undermining people's will. https://www.filmfestival.gr/en/movie-tdf/movie/12043
"... There's a curious alliance occurring between right-wing authoritarianism and neoliberalism, which is very very troubling. ..."
"... When the neoliberal ethic was first being proposed, it was very much being proposed to the generation of 68 and saying to that generation, 'Look, you want individual liberty and freedom. OK, we'll give it to you in this neoliberal form, which is a very political, economic form, and you have to forget other issues, like social justice and the like.' So, it seeped its way into the discourse of much of the Left and this creates a sort of tolerance for some neoliberal practices. ..."
"... The first revolt against the neoliberal order was Seattle, which was the anti-globalization movement and then all of the picketing of the IMF and G20's meetings. At that point, the ruling class has started to say 'well this could get out of hand, we need a government structure that's gonna sit on these people and do it really, really hard.' ..."
"... So, when Occupy Wall Street came along, which was a fairly small and fairly innocent kind of movement, Wall Street got paranoid. And basically summoned the New York mayor at the time - who was the Wall Street character Bloomberg - to say 'squash these people.' And so, at this point, the perpetuation of the neoliberal order starts to become more and more guaranteed by state authoritarianism and neoconservatism. Which now, has morphed a little bit into this kind of right-wing populism. ..."
"... Indeed, in the early 70s, right after the 1968 movement and when neoliberalism starts to become the dominant ideology, the Left retreated and retired from the idea of a collective struggle. ..."
David Harvey speaks with Greg Wilpert and describes how neoliberalism neutralized the Left
in the early 70s and why now there is a peculiar alliance between neoliberalism and right-wing
authoritarianism.
As Harvey points out:
There's a curious alliance occurring between right-wing authoritarianism and neoliberalism,
which is very very troubling.
When the neoliberal ethic was first being proposed, it was very much being proposed to the
generation of 68 and saying to that generation, 'Look, you want individual liberty and freedom.
OK, we'll give it to you in this neoliberal form, which is a very political, economic form, and
you have to forget other issues, like social justice and the like.' So, it seeped its way into
the discourse of much of the Left and this creates a sort of tolerance for some neoliberal
practices.
Neoliberalism has a very clever way of turning things around and blaming the victim. And we
saw that in the foreclosures of the housing and all this kind of stuff. Many people who were
foreclosed upon, didn't blame the system. What they blamed was themselves.
When Clinton came in promising all kinds of benefits and gave us all these neoliberal reforms,
at that point, people kind of said 'you know, this is not really working for me, and what's
more, there's something going on here which is not right.'
The first revolt against the neoliberal order was Seattle, which was the anti-globalization
movement and then all of the picketing of the IMF and G20's meetings. At that point, the ruling
class has started to say 'well this could get out of hand, we need a government structure
that's gonna sit on these people and do it really, really hard.'
So, when Occupy Wall Street came along, which was a fairly small and fairly innocent kind of
movement, Wall Street got paranoid. And basically summoned the New York mayor at the time - who
was the Wall Street character Bloomberg - to say 'squash these people.' And so, at this point,
the perpetuation of the neoliberal order starts to become more and more guaranteed by state
authoritarianism and neoconservatism. Which now, has morphed a little bit into this kind of
right-wing populism.
So, in a sense the neoliberal order is being perpetuated by this authoritarian shift. And that
should give the Left a good possibility to mount a counter-attack in certain parts of the
world.
Indeed, in the early 70s, right after the 1968 movement and when neoliberalism starts to
become the dominant ideology, the Left retreated and retired from the idea of a collective
struggle.
As Adam Curtis describes
in his film, HyperNormalisation :
The extraordinary thing was that no one opposed the bankers. The radicals and the Left
wingers who, ten years before, had dreamed of changing America through revolution, did nothing.
They had retreated and were living in abandoned buildings in Manhattan. The singer Patti Smith
later described the mood of disillusion that had come over them. "I could not identify with the
political movements any longer," she said. "All the manic activity in the streets. In trying to
join them, I felt overwhelmed by yet another form of bureaucracy." What she was describing was
a rise of a new, powerful individualism that could not fit with the idea of collective
political action. Instead, Patti Smith and many others became a new kind of individual radical,
who watched the decaying city with a cool detachment. They didn't try to change it. They just
experienced it.
So, the critical question today is whether the time has come for the Left to revive and
exterminate the neoliberal/far-right authoritarian beast.
"... The USA hegemony is based on ideological hegemony of neoliberalism. And BTW both Russia and China are neoliberal countries. That's probably why President Putin calls the USA administration "partners," despite clearly anti-Russian policies of all US administrations since 1991. ..."
"... One fascinating fact that escapes my understanding is why the USA elite wasted colossal advantage it got after the collapse of the USSR in just 25 years or so. I always thought that the USA elite is the most shrewd out of all countries. ..."
"... May be because they were brainwashed by neocon "intellectuals." I understand that most neocons are simply lobbyists of MIC, and MIC has huge political influence, but still neocon doctrine is so primitive that no civilized elite can take it seriously. ..."
"... I also understand Eisenhower hypocritical laments that "train with MIC left the station" and that the situation can't be reversed (lament disguised as a "warning"; let's remember that it was Eisenhower who appointed Allen Dulles to head the CIA. ..."
>US hegemony is imposed militarily, both covertly and overtly, throughout the world. It is maintained through the petrodollar,
corporate power, and the Federal Reserve Bank and its overseas counterparts
All true, but the key element is missing. The USA hegemony is based on ideological hegemony of neoliberalism. And BTW both
Russia and China are neoliberal countries. That's probably why President Putin calls the USA administration "partners," despite
clearly anti-Russian policies of all US administrations since 1991.
Ability to use military is important but secondary. Without fifth column of national elites which support neoliberalism that
would be impossible, or at least more difficult to use. Like it was when the USSR existed (Vietnam, Cuba, etc). The USSR has had
pretty powerful military, which was in some narrow areas competitive, or even superior to the USA, but when the ideology of Bolshevism
collapsed, the elite changed sides and adopted a neoliberal ideology. This betrayal led to the collapse of the USSR and all its
mighty military and the vast KGB apparatus proved to be useless.
In this sense, the article is weak, and some comments are of a higher level than the article itself in the level of understanding
of the situation (Simon in London at December 21, 2018, at 9:23 am one example; longevity of neoliberalism partially is connected
to the fact that so far there is no clear alternative to it and without the crisis similar to Great Depression adoption of New
Deal style measures is impossible )
It is really sad that the understanding that the destiny of the USA is now tied to the destiny of neoliberalism (much like
the USSR and Bolshevism) is foreign for many.
So it might well be that the main danger for the US neoliberal empire now is not China or Russia, but the end of cheap oil,
which might facilitate the collapse of neoliberalism as a social system based on wasteful use on commodities (and first of all
oil)
One fascinating fact that escapes my understanding is why the USA elite wasted colossal advantage it got after the collapse
of the USSR in just 25 years or so. I always thought that the USA elite is the most shrewd out of all countries.
May be because they were brainwashed by neocon "intellectuals." I understand that most neocons are simply lobbyists of MIC,
and MIC has huge political influence, but still neocon doctrine is so primitive that no civilized elite can take it seriously.
I also understand Eisenhower hypocritical laments that "train with MIC left the station" and that the situation can't be reversed
(lament disguised as a "warning"; let's remember that it was Eisenhower who appointed Allen Dulles to head the CIA.
"... Now, "we have a comatose world economy held together by debt and central bank money," Keating has said, "Liberal economics has run into a dead end and has had no answer to the contemporary malaise." What does the disavowal mean? In terms of his Labor heir Bill Shorten's growing appetite for redistributive taxation and close relationship to the union movement, it means "if Bill Shorten becomes PM, the rule of engagement between labour and capital will be rewritten," according to The Australian this week. Can't wait! ..."
"... Might be true. But frightening that people should naively still think that democracy is to be found in the 'Dictatorship of the Proletariat' ..."
"... most "isms" kill off their rivals and the unbelievers when they usurp powe ..."
"... Vested interests and the dollar seem to have all the power. Lies and deception are so common the truth is seen as the enemy. The voting public are merely fools for manipulation. Nah, neo-liberalism is not government, it is something far nastier, and clearly not what the public vote for, presuming a vote actually counts for anything anymore. ..."
For 40 years, the ideology popularly known as "neoliberalism" has dominated political decision-making in the English-speaking
west.
People hate
it . Neoliberalism's sale of state assets, offshored jobs, stripped services, poorly-invested infrastructure and armies of the
forcibly unemployed have delivered, not promised "efficiency" and "flexibility" to communities, but discomfort and misery. The wealth
of a few has now swelled to a level of conspicuousness that must politely be considered
vulgar
yet the philosophy's entrenched itself so deeply in how governments make decisions and allocate resources that one of its megaphones
once declared its triumph "the end of history".
... ... ...
Paul Keating's rejection
It was a year ago that a third sign first appeared, when the dark horse of Australian prime ministers, Paul Keating, made public
an on-balance rejection of neoliberal economics. Although Liberal PM Malcolm Fraser instigated Australia's first neoliberal policies,
it was Keating's architecture of privatisation and deregulation as a Labor treasurer and prime minister that's most well remembered.
Now, "we have a comatose world economy held together by debt and central bank money," Keating has said, "Liberal economics has run
into a dead end and has had no answer to the contemporary malaise." What does the disavowal mean? In terms of his Labor heir Bill Shorten's growing appetite for redistributive taxation and close relationship to the union movement, it means "if Bill Shorten becomes
PM, the rule of engagement between labour and capital will be rewritten," according to The Australian this week. Can't wait!
Tony
Abbott becomes a fan of nationalising assets
Or maybe's Sukkar's right about the socialists termiting his beloved Liberal party. How else to explain the earthquake-like paradigm
shift represented by the sixth sign? Since when do neoliberal conservatives argue for the renationalisation of infrastructure, as
is the push of Tony Abbott's gang to nationalise the coal-fired Liddell power station? It may be a cynical stunt to take an unscientific
stand against climate action, but seizing the means of production remains seizing the means of production, um, comrade. "You know,
nationalising assets is what the Liberal party was founded to stop governments doing," said Turnbull, even as he hid in the dens
and in the rocks of the mountains to weather – strange coincidence –
yet another Newspoll
loss.
"new introduction to a re-released Marx and Engels' Communist Manifesto.
Collective, democratic political action is our only chance for freedom and enjoyment."
Might be true. But frightening that people should naively still think that democracy is to be found in the 'Dictatorship of
the Proletariat' [ ie those who know what's good for you even if you don't like it ] of the Communist Manifesto after the revelations
of what that leads to in the Gulag Archipelago , Mao's China , Pol Pot , Kim John - un .
How quickly the world forgets. - you
might just as well advocate Mein Kampf it's the same thing in the end !
That's what you claim and it might be so but I'm not interested in keeping a score on the matter. The point you failed to get
is that the people you mentioned where totalitarian thugs. They used the banner of communism to achieve their ends. They would
have used what ever ideology that was in fashion to achieve the same results.
Does present day neo-liberalism actually qualify as a political movement?
Vested interests and the dollar seem to have all the power. Lies and deception are so common the truth is seen as the enemy.
The voting public are merely fools for manipulation. Nah, neo-liberalism is not government, it is something far nastier, and clearly
not what the public vote for, presuming a vote actually counts for anything anymore.
"... If the US wants to play law-fare, plausibly the Russians should respond in kind. What we have done to Russia just for any part of this could easily be a tort in a US court. False claims that result in damages are actionable. ..."
"... There were a number of us who were poking holes in the regime's narrative about the "hack" of DNC and now another federal judge has proof in front of him that, in fact, the murdered Seth Rich and his brother Aaron were the source of a thumb-drive with the e-mails. ..."
"... Oh, and by the way. The US chose to violate the Russian embassy facilities at least as flagrantly as the Iranian teenagers did in Tehran but without the excuse of youthful exuberance. ..."
For two years, Democrats have waited on Robert Mueller to deliver a death blow to the Trump presidency,"
The New York Times observed on July 20
. "On Wednesday, in back-to-back hearings with the former special counsel, that wish could face its final make-or-break moment."
very fact that Democrats had to subpoena Mueller in order to create this final moment should in fact be the final reminder of
what a mistake it was
for Democrats to have waited on him. If Mueller had incriminating information yet to share, or had been stymied from doing his
work, or if Attorney General William Barr had somehow misrepresented his findings, then it stands to reason that Mueller would be
welcoming the opportunity
to appear before Congress, not
resisting
it. The reality is that Mueller's investigation did not indict anyone on the Trump campaign for collusion with Russia, or even
for anything related to the 2016 election. Mueller's report found no evidence of a Trump-Russia conspiracy, and
even undermined the case
for it .
That said, there are unresolved matters that Mueller's testimony could help clarify. Mueller claimed to have established
that the Russian government conducted "a sweeping and systematic" interference campaign in order to elect Trump, yet the contents
of his report don't support that allegation. The Mueller report repeatedly excludes countervailing information in order to suggest,
misleadingly, that the Trump campaign had suspect "links" and "ties" to people connected with Russia. And Mueller and other intelligence
officials involved in the Russia probe made questionable investigative decisions that are worthy of scrutiny. To address these issues,
here are some questions that Mueller could be asked...
You have been very consistent Mr. Mate. I applaud you. Let me make a few observations. There are two things to consider. One
is the allegations that resulted in Mueller's so-called investigation and two is the "investigation" itself.
As for the allegation of (a) Russian interference/"meddling" in the 2016, you have provided the ammunition that shoots the
allegation full of holes. Timing after the election, minuscule budget compared to actors actually trying to influence the election,
advertising content frequently having nothing to do with the election and, finally, a US district judge that pointed out that
Mueller hadn't shown that the Russian government was behind the Internet Research Agency and ordered him to cease and desist.
Everybody seems to go oh, well, that's alright at this point but it's not.
The United States government seized Russian owned properties
in the United States without compensation, it expelled Russian diplomats and pressed our vassal states to expel Russian diplomats,
it expanded an economic war with Russia by increasing the sanctions that the US imposed on Russia for their successful resistance
to the US coup in Ukraine as well as barring Russian citizens from obtaining visas to the US.
If the US wants to play law-fare,
plausibly the Russians should respond in kind. What we have done to Russia just for any part of this could easily be a tort in
a US court. False claims that result in damages are actionable.
Then you have (b) the US claim that the dastardly forces of evil and/or wickedness (the GRU) broke into the DNC computers and
stole all these e-mails which demonstrated what a bunch of b***ards the DNC were and released them to the world so that now everybody
knew that the DNC was a corrupt and evil organization. More sanctions all around for Russia. Wait, what? Oh, right, the GRU.
There
were a number of us who were poking holes in the regime's narrative about the "hack" of DNC and now another federal judge has
proof in front of him that, in fact, the murdered Seth Rich and his brother Aaron were the source of a thumb-drive with the e-mails.
Oops. But the more sanctions all around on Russia are still in place without any justification. To make matters worse, I read
on Reuters that FBI director Wray is claiming that the Russians are going to interfere in the 2020 elections. Has anybody read
the story of the little boy who cried wolf? They interfered in the 2016 election....ah, no, they didn't....They were going to
interfere in the elections of our European vassals....ah, no, they didn't.
Without putting too fine a point on it, the Mueller "report" is nothing but a tissue of lies, innuendo, and misinformation
tantamount to fraud. It probably isn't worth the match to set it on fire (at least with Ken Starr we got something so salacious
that we could skip the Playboy). What the Mueller "report" is, however, is a relatively crude effort to cover up the efforts of
the "deep state" (FBI, CIA, NSA, DIA, etc etc) to fix the 2016 election for their preferred candidate - Three Names. And that
isn't just highly illegal, it's a violation of the oath that you take to uphold the constitution. They should be in jail and somebody
should be investigating Seth Rich's murder.
Jeffrey Harrison says: July 23, 2019 at 11:46 pm
Oh, and by the way. The US chose to violate the Russian embassy facilities at least as flagrantly as the Iranian teenagers
did in Tehran but without the excuse of youthful exuberance.
The US justice department is opening a broad antitrust review into major technology firms,
as criticism over the companies' growing reach and power heats up.
The investigation will focus on growing complaints that the companies are unlawfully
stifling competition.
"The Department's review will consider the widespread concerns that consumers, businesses
and entrepreneurs have expressed about search, social media, and some retail services online,"
the Department of Justice said in a statement.
ss="rich-link"> A new antitrust frontier – the issue closing partisan divides in
the name of policing big tech Read more
"Without the discipline of meaningful market-based competition, digital platforms may act in
ways that are not responsive to consumer demands," added the assistant attorney general Makan
Delrahim, of the antitrust division.
The review will investigate practices of online platforms including Facebook , Alphabet's Google, Amazon and
Apple.
The investigation comes amid calls from lawmakers, including Democratic presidential
candidates such as Elizabeth Warren, that the companies should face more scrutiny.
Lat week, Facebook, Google, and Amazon
faced a grilling before the House subcommittee on antitrust, commercial and administrative
law over their hold on markets including digital advertising, e-commerce and cloud
computing.
Lawmakers questioned Amazon over the fees it levies against
third-party sellers on the platform and whether this creates a monopoly of power. They also
questioned Facebook executives over practices of targeting startups for acquisition and copying
features of companies that decline to be acquired.
Lawmakers also grilled Facebook this month over its plans to launch a global cryptocurrency,
called Libra. In the hearing, Senator Sherrod Brown of Ohio said Facebook showed "breathtaking
arrogance" in attempting to launch a digital financial service after a number of major privacy
scandals.
In July, the Federal Trade Commission approved a $5bn fine against Facebook for its handling
of user data surrounding the Cambridge
Analytica scandal in 2018.
"Facebook is dangerous," Brown said, likening the company to a toddler playing with matches.
"It has burned the house down repeatedly and called every attempt a learning experience. Do you
really think people should trust you with their bank accounts and their money?"
The Department of Justice investigation is already under way, the Wall Street Journal
reported on Tuesday. The department hosted a private presentation from critics of big
technology companies, who walked legislators through concerns and arguments for breaking up the
firms.
Facebook, Alphabet , Amazon and Apple did not
immediately respond to requests for comment.
Putin was apparently explaining a fairly straightforward and, to many observers, valid
assessment of international politics. Namely, that Western establishments and institutions,
including the mainstream media, are experiencing a crisis in authority. That crisis has arisen
over several years due to popular perception that the governance of the political class is not
delivering on democratic demands of accountability and economic progress. That in turn has led
people to seek alternatives from the established parties, a movement in the US and Europe which
is denigrated by the establishment as "populist" or rabble rousing.
Putin was not advocating any particular politics or political figures. He was merely
pointing out the valid observation that the so-called liberal establishment has become
obsolete, or dysfunctional.
In her speech this week, May sought to lay on a sinister spin to Putin's remarks as being
somehow him egging on authoritarianism and anti-democratic politics.
Another example of distortion came from Donald Tusk, the European Council President, who
also said of Putin's interview:
"I strongly disagree with the main argument that liberalism is obsolete. Whoever claims
that liberal democracy is obsolete, also claims that freedoms are obsolete, that the rule of
law is obsolete and that human rights are obsolete For us in Europe, these are and will
remain essential and vibrant values. What I find really obsolete are: authoritarianism,
personality cults, the rule of oligarchs."
Tusk's depiction of Putin being anti-democratic, anti-human rights and anti-law is a
specious misdirection, or as May would say, "cynical falsehood".
Political leaders like May and Tusk are living in denial. They seem to suffer from a charmed
delusion that all is rosy with the state of Western democracy. That somehow Western states are
the acme of benign "liberalism".
By blaming evident deep-seated problems of poverty and apathy towards establishment politics
on "sinister" targets of "populism" and "authoritarian strong men" is a form of escapism from
reality.
In May's case, she has added good reason to escape from reality. Her political career is
ending in disaster and disgrace for having led Britain into a shambles over its Brexit
departure from the European Union. Of course, she would like a distraction from her abysmal
record, and she seemed to find one in her farewell speech by firing a dud diatribe at
Putin.
But let's re-examine her self-congratulatory claim more closely. "No one comparing the
quality of life or economic success of liberal democracies like the UK, France and Germany to
the Russian Federation would conclude that our system is obsolete."
There are two parts to that.
First, May is giving the usual establishment spiel about presumed superiority of Western
"liberal democracy" as opposed to politics and governance in Russia.
This week coming, May hands in her resignation as Conservative party prime minister to the
unelected head of state, Queen Elizabeth. The British monarch and her heirs rule as official
head of state by a presumed "divine order". Some democracy that is!
May's successor will either be Boris Johnson or Jeremy Hunt. The next prime minister of
Britain will be elected solely by members of Britain's Conservative party. As the Washington
Post noted this week, the Tory party represents less than one per cent of the British
population. So, the new leader of the United Kingdom is being decided not by a democratic
national mandate, but by a tiny minority of party members whose demographic profile is
typically rightwing, ardent nationalists, pro-militarist, white and elderly males. Moreover,
the "selection" of new leader comes down to a choice between two politicians of highly dubious
quality whose foreign policy tendency is to play sycophants to Washington. The way Johnson and
Hunt have, for example, lent support to Trump's reckless aggression towards Iran is a portent
of further scraping and bowing to American warmongering typical of Britain's "special
relationship".
In the second part of May's presumed virtuous liberal democracy, she hails the "quality of
economic success" of her nation as opposed to Russian society.
No-one, least of all Putin, is denying that reducing poverty is a social challenge for
Russia. In a recent nationwide televised Q&A, the "elected" (please note) head of the
Russian state called poverty reduction a priority for his government. However, Russia certainly
doesn't need advice from the United Kingdom or many other Western states on that issue.
A recent major
study in Britain found that some 21 per cent of the population (14 million people) are
living in poverty. Homelessness and aggravated crime figures are also off the charts due to
collapsing public services over a decade of economic austerity as deliberate government policy.
The inequality gap between super-rich and poverty among the mass of people has exploded to a
chasm in Britain, as in the US and other Western states.
These are some of the urgent issues that Putin was referring to when he asserted the
"liberal idea is obsolete". Can anyone objectively surveying the bankrupt state of Western
societies honestly dispute that?
Western states are fundamentally broken down because "liberalism" is an empty term which
conceals rapacious corporate capitalism and the oligarchic rule of an elite political class.
The advocates of "liberalism" like Britain's May, Johnson, Hunt or Tusk are the ones who are
anti-democracy, anti-human rights and anti-law. Their denial about the systemic cause of
poverty and injustice within their own societies and their complicity in American imperialist
warmongering in the Middle East or belligerence towards Russia and China is the true "quality"
of their "democratic principles".
If that's not obsolete then what is? And that's why May took a weird parting shot at Putin
in a desperate diversion from reality.
"When the music stops, in terms of liquidity, things will be complicated. But as long as the
music is playing, you've got to get up and dance. We're still dancing,"
"A baited banker thus desponds,
From his own hand foresees his fall,
They have his soul, who have his bonds;
'Tis like the writing on the wall.
How will the caitiff wretch be scared,
When first he finds himself awake
At the last trumpet, unprepared,
And all his grand account to make!
For in that universal call,
Few bankers will to heaven be mounters;
They'll cry, 'Ye shops, upon us fall!
Conceal and cover us, ye counters!'
When other hands the scales shall hold,
And they, in men's and angels' sight
Produced with all their bills and gold,
'Weigh'd in the balance and found light!'
"... People hate it . Neoliberalism's sale of state assets, offshored jobs, stripped services, poorly-invested infrastructure and armies of the forcibly unemployed have delivered, not promised "efficiency" and "flexibility" to communities, but discomfort and misery. The wealth of a few has now swelled to a level of conspicuousness that must politely be considered vulgar yet the philosophy's entrenched itself so deeply in how governments make decisions and allocate resources that one of its megaphones once declared its triumph "the end of history". ..."
For 40 years, the ideology popularly known as "neoliberalism" has dominated political
decision-making in the English-speaking west.
People
hate it . Neoliberalism's sale of state assets, offshored jobs, stripped services,
poorly-invested infrastructure and armies of the forcibly unemployed have delivered, not
promised "efficiency" and "flexibility" to communities, but discomfort and misery. The wealth
of a few has now swelled to a level of conspicuousness that must politely be considered
vulgar
yet the philosophy's entrenched itself so deeply in how governments make decisions and allocate
resources that one of its megaphones once declared its triumph "the end of history".
It wasn't, as
even he admitted later . And given some of the events of the contemporary political moment,
it's possible to conclude from auguries like smoke rising from a garbage fire and patterns of
political blood upon the floor that history may be hastening neoliberalism towards an end that
its advocates did not forecast.
Three years ago,
I remarked that comedian Russell Brand may have stumbled onto a stirring spirit of the
times when his "capitalism sucks" contemplations drew stadium-sized crowds. Beyond Brand
– politically and materially – the crowds have only been growing.
Is the political zeitgeist an old
spectre up for some new haunting? Or are the times more like a strong angel proclaiming
with a loud voice, "the combination of inequality and low wage growth is fuelling discontent.
Time to sing a new song."
In days gone past, they used to slice open an animal's belly and study the shape of its
spilled entrails to find out. But we could just keep an eye on the news.
Here are my seven signs of the neoliberal apocalypse:
... ... ...
5. The reds are back under the beds
... ... ...
6. Tony Abbott becomes a fan of nationalising assets
... How else
to explain the earthquake-like paradigm shift represented by the sixth sign? Since when do
neoliberal conservatives argue for the renationalisation of infrastructure, as is the push of
Tony Abbott's gang to nationalise the coal-fired Liddell power station?
It may be a cynical stunt to take an unscientific stand against climate action, but seizing
the means of production remains seizing the means of production, um, comrade.
"You know, nationalising assets is what the Liberal party was founded to stop governments
doing," said Turnbull, even as he hid in the dens and in the rocks of the mountains to weather
– strange coincidence – yet
another Newspoll loss.
Degeneration of the USA elite really is getting speed.
Notable quotes:
"... I've been watching in complete dismay for more than two decades now how many unbelievably empty people run for the highest office in the US. These people are empty. No substance, no soul, no brain or heart. Nothing. ..."
I've been watching in complete dismay for more than two decades now how many
unbelievably empty people run for the highest office in the US. These people are empty. No
substance, no soul, no brain or heart. Nothing.
If you have ever traveled in Russia outside of Moscow, you certainly have some horrible
stories to tell about its atrocious roads, food and lodging or rather lack thereof. Things have
changed greatly, and they keep changing. Now there are modern highways, plenty of cafés
and restaurants, a lot of small hotels; plumbing has risen to Western standards; the old pearls
of architecture have been lavishly restored; people live better than they ever did. They still
complain a lot, but that is human nature. Young and middle-aged Russians own or charter motor
boats and sail their plentiful rivers; they own country houses ("dachas") more than anywhere
else. They travel abroad for their vacations, pay enormous sums of money for concerts of
visiting celebrities, ride bikes in the cities – in short, Russia has become as
prosperous as any European country.
This hard-earned prosperity and political longevity allows President Putin to hold his own
in the international affairs. He is one of a few experienced leaders on the planet with twenty
years at the top job. He has met with three Popes of Rome, four US Presidents, and many other
rulers. This is important: 93-years old Prime Minister Mahathir Mohamad who ruled his Malaysia
for 40 years and has been elected again said the first ten years of a ruler are usually wasted
in learning the ropes, and only after first twenty does he becomes proficient in the art of
government. The first enemy a ruler must fight is his own establishment: media, army,
intelligence and judges. While Trump is still losing in this conflict, Putin is doing fine
– by his Judoka evasive action.
Recently a small tempest has risen in the Russian media, when a young journalist was
detained by police, and a small quantity of drugs was allegedly discovered on his body. The
police made many mistakes in handling the case. Perhaps they planted the evidence to frame the
young man; perhaps they had made the obvious mistakes to frame the government. The response has
been tremendous, as if the whole case had been prepared well in advance by the opposition
hell-bent to annoy and wake up the people's ire against the police and administration. Instead
of supporting the police, as Putin usually does, in this case he had the journalist released
and senior police officers arrested. This prompt evasive action undid the opposition's build-up
by one masterly stroke.
Recently he openly declared his distaste for liberalism in the interview for the FT . This is a major
heresy, like Luther's Ninety-five Theses. "The liberals cannot dictate Their diktat can be seen
everywhere: both in the media and in real life. It is deemed unbecoming even to mention some
topics The liberal idea has become obsolete. It has come into conflict with the interests of
the overwhelming majority of the population." Putin condemned liberals' drive for more
immigration. He called Angela Merkel's decision to admit millions of immigrants a "cardinal
mistake"; he "understood" Trump's attempt to stop the flow of migrants and drugs from
Mexico.
Putin is not an enemy of liberalism. He is rather an old-fashionable liberal of the 19
th century style. Not a current 'liberal', but a true liberal, rejecting
totalitarian dogma of gender, immigration, multiculturalism and R2P wars. "The liberal idea
cannot be destroyed; it has the right to exist and it should even be supported in some things.
But it has no right to be the absolute dominating factor."
In Putin's Russia liberalism is non-exclusive, but presents just one possible line of
development. Homosexuals are not discriminated against nor promoted. There are no gay parades,
no persecution of gays, either. Russian children aren't being brainwashed to hate their
fathers, taken away from their families and given to same-sex maniacs, as it happened in the
recent Italian case . Kids aren't
being introduced to joys of sex in primary schools. People are not requested to swear love to
transgenders and immigrants. You can do whatever you wish, just do not force others to follow
you – this is Putin's first rule, and this is true liberalism in my book.
There is very little immigration into Russia despite millions of requests: foreigners can
come in as guest workers, but this does not lead to permanent residency or citizenship. The
Police frequently check foreign-looking people and rapidly deport them if found in breach of
visa rules. Russian nationalists would want even more action, but Putin is a true liberal.
... ... ...
Why does Putin care about the US? Why can't he just stop taking dollars? This means he is an
American stooge! – an eager-for-action hothead zealot would exclaim. The answer is, the
US has gained a lot of power; much more than it had in 1988, when Reagan negotiated with
Gorbachev. The years of being the sole superpower weren't wasted. American might is not to be
trifled with.
New York Times insinuated.
True, Russia is big enough to survive even that treatment, but Russians have got used to a
good life, and they won't cherish being returned to the year 1956. They took action to prevent
these worst-case scenarios; for instance, they sold much of their US debt and
moved out of Microsoft , but these things are time-consuming and expensive. Putin hopes
that eventually the US will abandon its quest for dominance and assume a live-and-let-live
attitude as demanded by the international law. Until it happens, he is forced to play by
Washington rules and try to limit antagonism.
An experienced broker came in, promising to deliver the deal. It is the Jewish state,
claiming to have the means to navigate the US in the desired direction. This is a traditional
Jewish claim, used in the days of the WWI to convince the UK to enter the deal: you give us
Palestine; we shall bring the US into the European war on your side. Then it worked: the Brits
and their Aussie allies stormed Gaza, eventually took over the Holy Land, issued the Balfour
declaration promising to pass Palestine to the Jews, and in return, fresh American troops
poured into the European theatre of war, causing German surrender.
This time, the Jewish state proposed that Putin should give up his ties with Iran; in
return, they promised to assist in general warming of Russo-American relations. Putin had a
bigger counter-proposal: Let the US lift its Iran sanctions and withdraw its armed forces from
Syria, and Russia will try to usher Iranian armed forces out of Syria, too. The ensuing
negotiations around Iran-Syria deal would lead to recognition of the US and Israel interests in
Syria, and further on it could lead to negotiations in other spheres.
This was a clear win-win proposal. Iran would emerge free of sanctions; Israel and the US
would have their interests recognised in Syria; the much-needed dialogue between Russia and the
US will get a jump-start. But Israel does not like win-win proposals. The Jewish state wants
clear victories, preferably with their enemy defeated, humiliated, hanged. Israel rejected the
proposal, for it wanted Iran to suffer under sanctions.
... ... ...
Russia certainly wants to live in peace with the US, but not at the price Mr Netanyahu
suggested. Mr Patrushev condemned the US sanctions against Iran. He
said that Iran shot down the giant American drone RQ-4A Global Hawk worth more than a hundred
million dollars over Iranian territory, not in the international airspace as the Pentagon
claimed. He stated that American "evidence" that Iran had sabotaged tankers in the Persian Gulf
was inconclusive. Russia demanded that the United States stop its economic war against Iran,
recognize the legitimate authorities of Syria, led by President Bashar Assad, and withdraw its
troops from Syria. Russia expressed its support for the legitimate government in Venezuela.
Thus, Russia showed itself at this difficult moment as a reliable ally and partner, and at the
same time assured the staggering Israeli leadership of its friendship.
The problem is that the drive for war with Iran is not gone. A few days ago, the Brits
seized an Iranian super-tanker in the Straits of Gibraltar. The tanker was on its way to
deliver oil to Syria. Before that, the United States had almost launched a missile attack on
Iran. At the last moment, when the planes were already in the air, Trump stopped the operation.
It is particularly disturbing that he himself unambiguously hinted that the operation was
launched
without his knowledge . That is, the chain of commands in the US is now torn, and it is not
clear who can start a war. This has to be taken into account both in Moscow and in Tehran.
... ... ...
Russia wants to help Iran, not out of sheer love to the Islamic Republic, but as a part of
its struggle for multi-polar world, where independent states carry on the way they like. Iran,
North Korea, Venezuela – their fight for survival is a part and parcel of Russia's
struggle. If these states will be taken over, Russia can become the next victim, Putin
feels.
... ... ...
In this situation, Putin tries to build bridges to the new forces in Europe and the US, to
work with nationalist right. It is not the most obvious partner for this old-fashioned liberal,
but they fit into his idea of multi-polarity, of supremacy of national sovereignty and of
resistance to the world hegemony of Atlantic powers. His recent visit to Italy, a country with
strong nationalist political forces, had been successful; so was his meeting with the Pope.
In the aftermath of the audience with the Pope, Putin strongly defended the Catholic Church,
saying that "There are problems, but they cannot be over-exaggerated and used for destroying
the Roman Catholic Church itself. I get the feeling that these liberal circles are beginning to
use certain problems of the Catholic Church as a tool for destroying the Church itself. This is
what I consider to be incorrect and dangerous. After all, we live in a world based on Biblical
values and traditional values are more stable and more important for millions of people than
this liberal idea, which, in my opinion, is really ceasing to exist". For years, the Europeans
haven't heard this message. Perhaps this is the right time to listen.
The author is referring to WWI and the Balfour Declaration of Nov 1917 which indeed was
drafted on behalf of Jewish Zionist interests who in return did their level best in bringing
Wilson, who was long backed by NYC banking interests (hence the Federal Reserve Act of 1913
enacted on his watch), into the war which materially changed its dynamics and outcome.
The Ukraine in all this? I would think it a far bigger concern for Russia in any
trilateral meeting.
Do not expect anything on the Ukraine in the near future. Trump wants the DNC to nominate
guaranteed loser Biden. Then he can beat him senseless using 'Ukrainian tampering with U.S.
elections' via Biden's family business interests (1).
_____
Now that the Mueller exoneration is complete, the door is open to improved U.S. –
Russia relations. The important thing is looking at Putin's and Trump's actions , more
so than their words.
Trump's words sound 'officially concerned' about Crimea. However, this is primarily for EU
consumption. What actions has the Trump administration taken about Crimea? Little or nothing
depending on how you score the matter. So tacit acknowledgement pending a quid pro quo
.
Putin administration words (but not Putin himself) have said strong sounding things about
Iran. However, there are no actions that support a deep relationship.
-- Russia sells munitions to Iran on a 'cash & carry' basis along with many other nations
including Turkey. Russia and Israel have much stronger ties on the military equipment basis.
Look at their recent joint sale of AWACS to India (2).
-- Russia continues to let the Israeli air force freely strike Iranian al'Hezbollah and
al'Quds targets in Syria.
It looks like the quid pro quo arrangement will be Crimea for an Iranian exit from
Syria. It's a deal that would help peace throughout the region.
But he is hampered by his "deep state", by Pompeo and Bolton; about the latter, Trump
himself said that he wants to fight with the whole world. Presidents can't always remove
the ministers from whom they want to get rid of – even the absolute monarchs of the
past did not always succeed.
Actually, Trump is using Bolton against the deep state.
First and foremost, it is and advanced and skillful form of ' Good Cop – Bad
Cop '. When Bolton says something and Trump openly disagrees, it places the Fake Steam
Media complex in an untenable position. If they treat the story fairly, they embrace the
anathema of saying positive things about Trump. But they do not have any options to twist the
facts into their desired anti-American propaganda.
Secondarily, it also cleverly drives a wedge between two DNC factions:
-1- The true Clintonista believer, stricken by Trump Derangement Syndrome [TDS], will not
accept anything less than Impeachment. Preferably followed by turning him over to the Fascist
Stormtroopers of Antifa.
-2- Those with a less deranged view realise that a successful Impeachment process would
generate President Pence. And, he would be much more likely to accept Bolton's advice.
Perhaps Pence would pick Bolton to be Vice President.
Look at the circular firing squad that is forming up in the DNC nomination process to see
how Trump's deliberate agitation of various factions is working in his favor. The TDS faction
is winning and as a result the eventual DNC candidate will be unelectable.
@AghaHussain sts
plans have failed to materialise in Syria. The author here does a very good job of explaining
Russia's position and between his and Saker's analyses your argument is kaput and only fools
would buy it.
The Zionists went away empty handed with their visits to Russia and President Putin and if
anything Russia's resistance to the Zionists has hardened lately.
People who have two dimensional thinking and a limited box of clues seem to think it is as
simple as just saying no and digging their heels in but that way makes wars. Russia does not
have the sort of power nor an insane leadership that it would take for that.
The best hope for an internal Iranian solution is IRGC enlightened self interest. A fairly
bloodless replacement of Khameni with a general from the IRGC. It worked in Egypt and the
world welcomed that military solution. One can be 99% certain that replacing Khameni would be
just as welcome.
The new 'General Ayatollah in Chief' would have a free hand to disengage from Khameni's
extremism. The economic recovery from ending sanctions would guarantee internal popularity.
Think of it as MIGA, Make Iran Great Again , though they are unlikely to use that
exact phrase.
It's ludicrous to imagine that Russians are so wedded to the good life that they do not
dare antagonise Amerikastan. What "good life" is this? Ask the pensioners struggling on a few
thousand rubles a month how the hell they are supposed to manage. The luxuries enjoyed by the
yuppies in Moscow (most of whom, fluently English speaking and firmly pro-Amerikastani, are a
fifth column of Quislings) are not the life that the factory worker in Volgograd or the
farmer outside St Petersburg will recognise.
I want to sidetrack the thread to the matter of Edward Snowden.
Putin made a comment early on 'a strange young man'.
I understand exactly what he was saying. I am the same. No leaks. ht is a matter of
honour.
OTOH, confronted by wall-to-wal evil bullshit as he was, I think he was not in the wrong
(but have a little internal conflict on that, since the secrets 4 have to keep now are ooly
technical and at times commercial, such a dilemna never arises.
In no situation would such be ethical.
he was sorry for Sowden's girlfriend, he dumped her. but, not long after, she was with
him. Very romantic. Doubtless, Russian secret services had some role.
I like the happy ending there, it is very romantic.
Would make a great movie, but not possible from Hollywood, perhaps Russia could revive its
moribund film industry?
Oct 20, 2018 Putin: Russia Getting Rid Of US Dollar Matter Of National Security
Russian president Vladimir Putin: "That's what our American friends are doing. They're
undermining trust in the dollar as a universal payment instrument and the main reserve
currency."
@AmRusDebate t in
2014, and had gone so deep that there is no light at the end of the tunnel now. It is still
used by the Empire as an annoying sore right next to Russia, but that's all it can be. It did
not and could not deliver what the Empire was hoping for. The imperial planners never take
into account the critical condition for their "color revolutions" to bring US-friendly
compradores to power anywhere: the country in question must be rotten through and through.
Thus, instead of useful sharp tools they get worthless pieces of shit. They are still trying
to use an inevitable stink for their purposes, but that's the only use shit is good for.
It's not just Moscow yuppies. Visit any provincial city in Russia today and you'd see that
it looks way better than it ever did in the USSR. There are cafes everywhere and lots of
people in them spending serious money, because they can afford that. Drive on any road, in or
between the cities, and you can see that the roads are in a better shape than they ever were,
and there are lots of gas stations, cafes, and hotels along them, all doing brisk business.
Russians have ten times more cars now than they had in the USSR, and they drive a lot.
@A123 be deployed
right on Russia's border on yet another side. Russia would be readily bottled up and be
denied the freedom to navigate through the surrounding waters. And it would be more
vulnerable to land invasion from more points.
Russia should continue disentangling itself from US and US-Controller financial systems
and institutions. Keep becoming more able to sustain its people without so many imports of
foodstuffs and manufactured goods alike.
Far from giving up Crimea, Russia should bide its time and wait to retake the Donbass
region or more when Ukraine collapses, breaks up, and/or is outright occupied by the US.
I rather doubt you're in any position to judge whether Khameni is a sociopath.
And your fixation on regime change is noted. The ultimate expression of Western arrogance:
You, you benighted, retrograde, sociopathic worm, are not a fit chief executive of your
nation so we have decided you must go. If we have to kill hundreds of thousands of your
people that's just an unavoidable cost of our being the excellent people we are.
Liberalism in the West today is similar to communism in the SU in the late 80's: a
decrepit ideology that offers nothing to ordinary people and whose adherents are incapable of
anything but mouthing the same rubbish over and over. It will similarly die a well-deserved
death.
"... You hypocrites! You build monuments for the prophets and decorate the graves of the righteous. And you say, 'If we had lived in the days of our ancestors , we would not have taken part with them in shedding the blood of His messengers ..."
"... this entire Russian collusion meme seems as though it is an hysterical reaction to the spin put out by the Clinton political faction and their neoliberal enablers after their shocking loss in the 2016 Presidential election. ..."
"... the financial corruption and private pilfering using public power, money laundering and the kind of soft corruption that is rampant amongst our new elite is all there ..."
"... We are reassured and misled by the same kinds of voices that have always served the status quo and the monied interests, the think tanks, the so-called 'institutes,' and the web sites and former con men who offer a constant stream of thinly disguised propaganda and misstatements of principle and history. We are comforted by their lies. ..."
"... We wish to strike a deal with the Lord, and a deal with the Devil -- to serve both God and Mammon as it suits us. It really is that cliché. And it is so finely woven into the fabric of our day that we cannot see it; we cannot see that it is happening to us and around us. ..."
"... It has always been so, especially in times of such vanity and greed as are these. Then is now. There is nothing new under the sun. And certainly nothing exceptional about the likes of us in our indulgent self-destruction. ..."
"He drew near and saw the city, and he wept for it saying, 'If you had only recognized the things that make for peace.
But now you are blinded to them. Truly, the days will come when your enemies will set up barriers to surround you, and hem
you in on every side. Then they will crush you into the earth, you and your children. And they will not leave one stone
upon another, because you did not recognize the way to your salvation.'"
Luke 19:41-44
"You hypocrites! You build monuments for the prophets and decorate the graves of the righteous. And you say, 'If
we had lived in the days of our ancestors, we would not have taken part with them in shedding the blood of His messengers.'"
Matthew 23:29-30
...the results of the Senate GOP finding no evidence of 'collusion' with Russia by the Trump Administration to influence the
results of the presidential election..
This last item is not surprising, because this entire Russian collusion meme seems as though it is an hysterical reaction
to the spin put out by the Clinton political faction and their neoliberal enablers after their shocking loss in the 2016 Presidential
election.
Too bad though, because the financial corruption and private pilfering using public power, money laundering and the kind
of soft corruption that is rampant amongst our new elite is all there. And by there we mean on both sides of the fence -- which
is why it had to take a back seat to a manufactured boogeyman.
... ... ...
There is a long road ahead before we see anything like a resolution to this troubling period in American political history.
We look back at other troubled periods and places, and either see them as discrete and fictional, a very different world apart,
or through some rosy lenses of good old times which were largely benign and peaceful. We fail to see the continuity, the similarity,
and the commonality of a dangerous path with ourselves. As they did with their own times gone by. Madness blinds its acolytes, because
they wish it so. They embrace it to hide their shame.
We are reassured and misled by the same kinds of voices that have always served the status quo and the monied interests,
the think tanks, the so-called 'institutes,' and the web sites and former con men who offer a constant stream of thinly disguised
propaganda and misstatements of principle and history. We are comforted by their lies.
People want to hear these reassuring words of comfort and embrace it like a 'religion,' because they do not wish to draw the
conclusions that the genuine principles of faith suggest (dare we say command in this day and age) in their daily lives.
They blind themselves by adopting a kind of a schizoid approach to life, where 'religion' occupies a discrete, rarefied space, and
'political or economic philosophy' dictates another set of everyday 'practical' observances and behaviors which are more pliable,
and pleasing to our hardened and prideful hearts.
We wish to strike a deal with the Lord, and a deal with the Devil -- to serve both God and Mammon as it suits us. It really is
that cliché. And it is so finely woven into the fabric of our day that we cannot see it; we cannot see that it is happening to us
and around us.
And so we trot on into the abyss, one exception and excuse and rationalization for ourselves at a time. And we blind ourselves
with false prophets and their profane theories and philosophies.
As for truth, the truth that brings life, we would interrupt the sermon on the mount itself, saying that this sentiment was all
very well and good, but what stocks should we buy for our portfolio, and what horse is going to win the fifth at Belmont? Tell us
something useful, practical! Oh, and can you please fix this twinge in my left shoulder? It is ruining my golf game.
"Those among the rich who are not, in the rigorous sense, damned, can understand poverty, because they are poor themselves,
after a fashion; they cannot understand destitution. Capable of giving alms, perhaps, but incapable of stripping themselves
bare, they will be moved, to the sound of beautiful music, at Jesus's sufferings, but His Cross, the reality of His Cross, will
horrify them. They want it all out of gold, bathed in light, costly and of little weight; pleasant to see, hanging from a woman's
beautiful throat."
Léon Bloy
No surprise in this. It has always been so, especially in times of such vanity and greed as are these. Then is now. There
is nothing new under the sun. And certainly nothing exceptional about the likes of us in our indulgent self-destruction.
"... There are two problems with storming the Winter Palace. First, you won't have a decisive majority of Americans behind you. Second, you have no idea what you'd do if somehow did seize the Winter Palace. You could conceivably solve the first problem by going balls out demagogue a la Hugo Chavez; but, like Chavez, you'd have to dispense with democracy to keep power because you have no solution to the second problem. For my money, a decent social democracy-universal healthy care, more progressive taxes, a higher minimum wage, more affordable college education, etc.- is plenty hard enough to secure. ..."
"... Before the long-decline began in the 70s, a large fraction of the UK's economic activity was chartered, regulated, and/or managed for the people. That's not capitalism, by definition. ..."
"Does anybody around here have anything useful to suggest"
both demonstration and general strikes are powerful ways to express popular outrage. one is planned
on for the 17th (too soon) and another more organized one is being planned for march.
"the British welfare state, the war on poverty/great society policy era, and the Scandinavian
social model are" not replacements for capitalism. They are forms of capitalism. And the sorts
of policies that go with these versions of conventional social democracy are...pretty much the
platform articles that Clinton ran on. Which is the serious reason the American right despised
Hillary. They, at least, didn't have any trouble telling the candidates apart.
There are two problems with storming the Winter Palace. First, you won't have a decisive majority
of Americans behind you. Second, you have no idea what you'd do if somehow did seize the Winter
Palace. You could conceivably solve the first problem by going balls out demagogue a la Hugo Chavez;
but, like Chavez, you'd have to dispense with democracy to keep power because you have no solution
to the second problem. For my money, a decent social democracy-universal healthy care, more progressive
taxes, a higher minimum wage, more affordable college education, etc.- is plenty hard enough to
secure.
Before the long-decline began in the 70s, a large fraction of the UK's economic activity was
chartered, regulated, and/or managed for the people. That's not capitalism, by definition. (Socialism
was a market/trade-based system at its inception. The tendencies with alternative economic models
came later.)
"And the sorts of policies that go with these versions of conventional social democracy are...pretty much the platform
articles that Clinton ran on."
I guess I missed Clinton advocating for the nationalization of health care, education, energy
production, and transportation.
And the "welfare state" has little to do with "social democracy" (whatever that recent nonsense
phrase means), all of them were developed by socialist movements.
"... government for the centre ground has been about management- the days when the US New Deal funded by taxing the rich and which built the wealth Americans now miss, and the Labour post war government that built the NHS [and taxed the rich] is part of history. Instead we have no new innovation but a little bit of tweaking with banks and global business. ..."
"... In return the gutted communities become less smart and given bread and circuses but their privilege and lack of mobility means they don't travel to pick fruit elsewhere- yet they still demand food on the table and the only ones prepared to travel and work hard are the even greater poor. ..."
It wasn't just free trade that the white working class voters of the rust belt states were
angry about, it was also high immigration. Naomi doesn't mention this, probably because fluid
borders is one policy which the Davos class and left-liberals like herself agree on.
Such a[n intersection left] coalition is possible. In Canada, we have begun to cobble it
together under the banner of a people's agenda called The Leap Manifesto, endorsed by more
than 220 organisations from Greenpeace Canada to Black Lives Matter Toronto, and some of
our largest trade unions.
And if such a coalition of the usual suspects got off the ground in the USA it would just
about seal a second term for Donald.
government for the centre ground has been about management- the days when the US New Deal
funded by taxing the rich and which built the wealth Americans now miss, and the Labour post
war government that built the NHS [and taxed the rich] is part of history. Instead we have no
new innovation but a little bit of tweaking with banks and global business.
No government wants to upset the powers that run the economy- so a multinational can move
its workforce to a country with lower pay, lower environmental regulation- it can use the
inequality to move not only manufacturing but people.
In return the gutted communities become less smart and given bread and circuses but their
privilege and lack of mobility means they don't travel to pick fruit elsewhere- yet they
still demand food on the table and the only ones prepared to travel and work hard are the
even greater poor.
And the right simply blames the immigrants, the others and you believe them.
don't stop at 2011, the precedent started in 1934 in Nuremberg Germany. Trump used the
same how to manual written by Goebbels, he got the idea from the Romans.
"... The idea of the 'American dream' seems to have morphed into a nasty belief that if you're poor it's your own fault. You didn't 'want it enough'. You must be secretly lazy and undeserving, even if you're actually working three jobs to survive, or even if there are no jobs. ..."
"... It always seems very odd to me that so many people who think like that profess to be Christian. 'Poverty equals moral failure' is the complete opposite of what Jesus Christ got into so much trouble for saying. ..."
The idea of the 'American dream' seems to have morphed into a nasty belief that if
you're poor it's your own fault. You didn't 'want it enough'. You must be secretly lazy and
undeserving, even if you're actually working three jobs to survive, or even if there are no
jobs.
This view has taken hold in the UK too, where the tabloids peddle the view that anyone who
claims state benefits must be a fraud. But at least, people here and in mainland Europe have
the direct experience of war within living memory and we understand that you can lose
everything through no fault of your own. In the US, even when there's a natural disaster like
Katrina it seems to be the poor people's fault for not having their own transport and money
to go and stay somewhere else.
It always seems very odd to me that so many people who think like that profess to be
Christian. 'Poverty equals moral failure' is the complete opposite of what Jesus Christ got
into so much trouble for saying.
Pretty superficial article, but some points are interesting. Especially the fact that the collapse of neoliberalism
like collapse of Bolshevism is connected with its inability to raise the standard of living of population in major Western
countries, despite looting of the USSR and Middle eastern countries since 1991. Spoils of victory in the Cold War never got to
common people. All was appropriated by greedy "New Class" of neoliberal oligarchs.
The same was true with Bolshevism in the USSR. The communist ideology was dead after WWII when it became clear that
"proletariat" is not a new class destined to take over and the "iron law of oligarchy" was discovered. Collapse happened
in 45 years since the end of WWII. Neoliberal ideology was dead in 2008. It would be interesting to see if neoliberalism
as a social system survives past 2050.
The level of degeneration of the USA elite probably exceeds the level of degeneration of Nomenklatura even now.
Notable quotes:
"... A big reason why liberal democracies in Europe have remained relatively stable since WWII is that most Europeans have had hope that their lives will improve. A big reason why the radical vote has recently been on the rise in several European countries is that part of the electorate has lost this hope. People are increasingly worried that not only their own lives but also the lives of their children will not improve and that the playing field is not level. ..."
"... As a result, the traditional liberal package of external liberalisation and internal redistribution has lost its appeal with the electorate, conceding ground to the alternative package of the radical right that consists of external protectionism and internal liberalisation ..."
"... Mr Mody said the bottom half of German society has not seen any increase in real incomes in a generation. ..."
"... The reforms pushed seven million people into part-time 'mini-jobs' paying €450 (£399) a month. It lead to corrosive "pauperisation". This remains the case even though the economy is humming and surging exports have pushed the current account surplus to 8.5pc of GDP." ..."
"... "British referendum on EU membership can be explained to a remarkable extent as a vote against globalisation much more than immigration " ..."
"... As an FYI to the author immigration is just the flip side of the same coin. Why were immigrants migrating? Often it's because they can no longer make a living where they left. Why? Often globalization impacts. ..."
"... The laws of biology and physics and whatever else say that the host that is being parasitised upon, cannot support the endless growth of the parasites attached upon it. The unfortunate host will eventually die. ..."
"... "negative effects of globalisation: foreign competition, factory closures, persistent unemployment, stagnating purchasing power, deteriorating infrastructures and public services" ..."
"... he ruling elites have broken away from the people. The obvious problem is the gap between the interests of the elites and the overwhelming majority of the people. ..."
"... One of the things we must do in Russia is never to forget that the purpose of the operation and existence of any government is to create a stable, normal, safe and predictable life for the people and to work towards a better future. ..."
"... "If you're not willing to kill everybody who has a different idea than yourself, you cannot have Frederick Hayek's free market. You cannot have Alan Greenspan or the Chicago School, you cannot have the economic freedom that is freedom for the rentiers and the FIRE (finance, insurance, real estate) sector to reduce the rest of the economy to serfdom." ~ Michael Hudson ..."
"... I'm surprised more people don't vote for neo-fascist parties like the Golden Dawn. Ordinary liberal politics has completely failed them. ..."
The more a local economy has been negatively affected by the two shocks, the more its
electors have shifted towards the radical right and its policy packages. These packages
typically combine the retrenchment against international openness and the liberalisation of the
internal market and more convincingly address the demand for protection by an electorate that,
after the austerity following the Crisis, no longer trusts alternatives based on more liberal
stances on foreign relations and the parallel promise of a stronger welfare state.
A big reason why liberal democracies in Europe have remained relatively stable since WWII is
that most Europeans have had hope that their lives will improve. A big reason why the radical
vote has recently been on the rise in several European countries is that part of the electorate
has lost this hope. People are increasingly worried that not only their own lives but also the
lives of their children will not improve and that the playing field is not level.
On the one hand, despite some progress in curtailing 'tax havens' in recent years, there has
never been as much wealth in tax havens as there is today (Zucman 2015). This is seen as unfair
because, if public goods and services (including those required to help the transition to a
'green economy') have to be provided in the regions where such hidden wealth comes from, lost
tax revenues have to be compensated for by higher taxes on law-abiding households.
On the other hand, fairness is also undermined by dwindling social mobility. In the last
decades, social mobility has slowed down across large parts of the industrialised world (OECD
2018), both within and between generations. Social mobility varies greatly across regions
within countries, correlates positively with economic activity, education, and social capital,
and negatively with inequality (Güell at al. 2018). Renewed migration from the South to
the North of Europe after the Crisis (Van Mol and de Valk 2016) is a testimony of the widening
relative lack of opportunities in the places that have suffered the most from competition from
low-wage countries.
Concluding Remarks
Globalisation has come accompanied by the Great Convergence between countries around the
world but also the Great Divergence between regions within several industrialised countries.
The same holds within the EU. In recent years, redistributive policies have had only a very
limited impact in terms of reversing growing regional inequality.
As a result, the traditional
liberal package of external liberalisation and internal redistribution has lost its appeal with
the electorate, conceding ground to the alternative package of the radical right that consists
of external protectionism and internal liberalisation.
This is both inefficient and unlikely to
lead to more regional convergence. What the political and policy debate in Europe is arguably
missing is a clearer focus on two of the main underlying causes of peoples' growing distrust in
national and international institutions: fiscal fairness and social mobility.
Right. It would be better to say "the traditional New Deal liberal package " has not lost
its appeal, it was killed off bit by bit starting with NAFTA. From a 2016 Thomas Frank essay
in Salon:
That appeal to [educated credentialed] class unity gives a hint of what Clintonism was
all about. To owners and shareholders, who would see labor costs go down as they took
advantage of unorganized Mexican labor and lax Mexican environmental enforcement, NAFTA held
fantastic promise. To American workers, it threatened to send their power, and hence their
wages, straight down the chute. To the mass of the professional-managerial class, people who
weren't directly threatened by the treaty, holding an opinion on NAFTA was a matter of
deferring to the correct experts -- economists in this case, 283 of whom had signed a
statement declaring the treaty "will be a net positive for the United States, both in terms
of employment creation and overall economic growth."
The predictions of people who opposed the agreement turned out to be far closer to what
eventually came to pass than did the rosy scenarios of those 283 economists and the
victorious President Clinton. NAFTA was supposed to encourage U.S. exports to Mexico; the
opposite is what happened, and in a huge way. NAFTA was supposed to increase employment in
the U.S.; a study from 2010 counts almost 700,000 jobs lost in America thanks to the treaty.
And, as feared, the agreement gave one class in America enormous leverage over the other:
employers now routinely threaten to move their operations to Mexico if their workers
organize. A surprisingly large number of them -- far more than in the pre-NAFTA days -- have
actually made good on the threat.
Twenty years later, the broader class divide over the subject persists as well.
According to a 2014 survey of attitudes toward NAFTA after two decades, public opinion
remains split. But among people with professional degrees -- which is to say, the liberal
class -- the positive view remains the default. Knowing that free-trade treaties are always
for the best -- even when they empirically are not -- seems to have become for the
well-graduated a badge of belonging.
The only internal redistribution that's happened in the past 25 – 30 yearsis from
the bottom 80% to the top 10% and especially to the top 1/10th of 1 %.
Not hard to imagine why the current internal redistribution model has lost its appeal with
the electorate.
I think there are two different globalizations that people are responding to.
1. Their jobs go away to somewhere in the globe that has lower wages, lower labor
protections, and lower environmental protections. So their community largely stays the same
but with dwindling job prospects and people slowly moving away.
2. The world comes to their community where they see immigrants (legal, illegal, refugees)
coming in and are willing to work harder for less, as well as having different appearance,
languages, religion, and customs. North America has always had this as we are built on
immigration. Europe is much more focused on terroire. If somebody or something has only been
there for a century, they are new.
If you combine both in a community, you have lit a stick of dynamite as the locals feel
trapped with no way out. Then you get Brexit and Trump. In the US, many jobs were sent
overseas and so new people coming in are viewed as competitors and agents of change instead
of just new hired help. The same happened in Britain. In mainland Europe with less inequality
and more job protection, it is more of just being overwhelmed by the sheer quantity of
newcomers in a society that does not prize that at all.
I saw the warning signs when Golden Dawn appeared in Greece
The liberals said it was just a one off, as they always do, until it isn't.
How did successful Germany turn into a country where extremism would flourish?
The Hartz IV reforms created the economic hardship that causes extremism to flourish.
"Germany is turning to soft nationalism. People on low incomes are voting against authority
because the consensus on equality and justice has broken down. It is the same pattern across
Europe," said Ashoka Mody, a former bail-out chief for the International Monetary Fund in
Europe.
Mr Mody said the bottom half of German society has not seen any increase in real
incomes in a generation. The Hartz IV reforms in 2003 and 2004 made it easier to fire
workers, leading to wage compression as companies threatened to move plants to Eastern
Europe.
The reforms pushed seven million people into part-time 'mini-jobs' paying €450
(£399) a month. It lead to corrosive "pauperisation". This remains the case even though
the economy is humming and surging exports have pushed the current account surplus to 8.5pc
of GDP."
This is a successful European country, imagine what the others look like.
"British referendum on EU membership can be explained to a remarkable extent as a vote
against globalisation much more than immigration "
As an FYI to the author immigration is just the flip side of the same coin. Why were
immigrants migrating? Often it's because they can no longer make a living where they left.
Why? Often globalization impacts.
Another recap about that really just mourns the lack of trust in the establishment, with
no answers. More "I can't believe people are sick to death of experts of dubious skills but
networking "
What it is just admitted that a system that can only work great for 20% of any given
population if they are born in the right region with the right last name just simply not work
except as an exercise in extraction?
And about the EU as if it could never be taken over by bigger authoritatians than the ones
already populating it.
Then see how much those who think it is some forever bastion of liberalism over sovereignity
likes it .
"Another recap about that really just mourns the lack of trust in the establishment,
with no answers."
Usually it involves replacing the establishment or creating an internal threat to
reinstate compliance in the establish (Strauss and Howe).
Strategies for initiate the former may be impossible in this era where the deep state can
read your thoughts through digital media so you would like it would trend to the latter.
Mmmmm, yes, migration, globalisation and such like.
But, unregulated migration into an established environment, say a country, say, UK, on one
hand furthers profits to those benefiting from low labour wages (mainly, friends of people
working for governments), but on the other leads to creation of parallel societies, where the
incoming population brings along the society they strived to escape from. The Don calls these
sh***hole societies. Why bring the f***ing thing here, why not leave it where you escaped
from.
But the real betrayal of the native population happens when all those unregulated migrants
are afforded immediate right to social security, full access to NHS and other aspects of
state support, services that they have not paid one penny in support before accessing that
particular government funded trough. And then the parasitic growth of their "family and
extended family" comes along under the banner of "human rights".
This is the damnation of the whole of Western Civilisation which had been hollowed out
from within by the most devious layer of parasitic growth, the government apparatus. The
people we pay for under the auspices that they are doing some work for us, are enforcing
things that treat the income generators, the tax paying society as serfs whose primary
function in life is to support the parasites (immigrants) and parasite enablers
(government).
The laws of biology and physics and whatever else say that the host that is being
parasitised upon, cannot support the endless growth of the parasites attached upon it. The
unfortunate host will eventually die.
Understanding of this concept is most certainly within mental capabilities of all those
employed as the "governing classes " that we are paying for through our taxes.
Until such time when legislation is enacted that each and every individual member of
"government classes " is made to pay, on an indemnity basis, through financial damages,
forced labour, organs stripping or custodial penalties, for every penny (or cent, sorry,
yanks), of damage they inflict on us taxpayers, we are all just barking.
This piece does an admirable job conflating globalisation and the ills caused by the
neoliberal capture of social democratic parties/leaders. Did people just happen to lose hope,
or were they actively betrayed? We are left to guess.
"negative effects of globalisation: foreign competition, factory closures, persistent
unemployment, stagnating purchasing power, deteriorating infrastructures and public
services"
Note that these ills could also be laid at the feet of the austerity movement, and the
elimination/privatisation of National Industrial Policy, both cornerstones of the neoliberal
infestation.
Not only is globalization not new, all of the issues that come with it are old news.
All of it.
Part of the problem is that the global economic order is still in service to the same old
same old. They have to rebrand every so often to keep the comfortable even more comfortable.
Those tasked with keeping the comfortable more comfortable have to present this crap as "new
ideas" for their own careerism or actually do not realize they haven't espoused a new idea in
500 years.
Putin's recent interview with Financial Times editor offers a clear-eyed perspective on
our changing global structure:
"What is happening in the West? What is the reason for the Trump phenomenon, as you said,
in the US? What is happening in Europe as well? The ruling elites have broken away from the
people. The obvious problem is the gap between the interests of the elites and the
overwhelming majority of the people.
Of course, we must always bear this in mind. One of the things we must do in Russia is
never to forget that the purpose of the operation and existence of any government is to
create a stable, normal, safe and predictable life for the people and to work towards a
better future.
You know, it seems to me that purely liberal or purely traditional ideas have never
existed. Probably, they did once exist in the history of humankind, but everything very
quickly ends in a deadlock if there is no diversity. Everything starts to become extreme one
way or another.
Various ideas and various opinions should have a chance to exist and manifest themselves,
but at the same time interests of the general public, those millions of people and their
lives, should never be forgotten. This is something that should not be overlooked.
Then, it seems to me, we would be able to avoid major political upheavals and troubles.
This applies to the liberal idea as well. It does not mean (I think, this is ceasing to be a
dominating factor) that it must be immediately destroyed. This point of view, this position
should also be treated with respect.
They cannot simply dictate anything to anyone just like they have been attempting to do
over the recent decades. Diktat can be seen everywhere: both in the media and in real life.
It is deemed unbecoming even to mention some topics. But why?
For this reason, I am not a fan of quickly shutting, tying, closing, disbanding
everything, arresting everybody or dispersing everybody. Of course, not. The liberal idea
cannot be destroyed either; it has the right to exist and it should even be supported in some
things. But you should not think that it has the right to be the absolute dominating factor.
That is the point. Please." ~ Vladmir Putin
He's talking about the end of neoliberalism, the economic fascism that has gripped the
world for over 40 years:
"If you're not willing to kill everybody who has a different idea than yourself, you
cannot have Frederick Hayek's free market. You cannot have Alan Greenspan or the Chicago
School, you cannot have the economic freedom that is freedom for the rentiers and the FIRE
(finance, insurance, real estate) sector to reduce the rest of the economy to serfdom." ~
Michael Hudson
Let's get back to using fiscal policy for public purpose again, to granting nations their
right to self-determination and stopping the latest desperate neoliberal attempt to change
international norms by installing fascist dictators (while pretending they are different) in
order to move the world backwards to a time when "efforts to institutionalize standards of
human and civil rights were seen as impingements on sovereignty, back to the days when no one
gave a second thought to oppressed peoples."
Very interesting article, and even more interesting conversation! There is a type of
argument that very accurately points out some ills that need addressing, and then goes on to
spout venom on the only system that might be able to address those ills.
It may be that the
governing classes are making life easy for themselves. How to address that is the hard and
difficult issue. Most of the protection of the small people comes from government.
Healthcare, schools, roads, water etc.(I'm in scandinavia).
If the government crumbles, the
small people have to leave. The most dreadful tyranny is better than a failed state with
warring factions.
The only viable way forward is to somehow improve the system while it is
(still) running. But this discussion I do not see anywhere.
If the discussion does not
happen, there will not be any suggestions for improvement, so everything stays the same.
Change is inevitable – it what state it will catch us is the important thing. A cashier
at a Catalonian family vineyard told me the future is local and global: the next level from
Catalonia will be EU. What are the steps needed to go there?
Same old, Same old. Government is self-corrupting and is loath to change. People had
enough July fourth 1776.
"We hold these truths to be self-evident, that all men are created equal, that they are
endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty
and the pursuit of Happiness.–That to secure these rights, Governments are instituted
among Men, deriving their just powers from the consent of the governed, –That whenever
any Form of Government becomes destructive of these ends, it is the Right of the People to
alter or to abolish it, and to institute new Government, laying its foundation on such
principles and organizing its powers in such form, as to them shall seem most likely to
effect their Safety and Happiness."
FWIW: The fireworks we watch every Fourth of July holiday are symbolic!!!!
The cashier seems to be envisioning a neoliberal paradise where the nation-state no longer
exists. But who, then, collects the taxes that will pay for infrastructure, healthcare,
education, public housing, and unemployment insurance? The European Parliament?
Will Germans
and Finns be willing to pay high taxes in order to pay for those services for Greeks and
Spaniards?
Look at the unemployment rate in Greece the Germans would simply say that the
Greeks are lazy parasites and don't want to work (rather than understand that the economic
conditions don't allow for job creation), and they would vote for MEPs that vote to cut taxes
and welfare programs.
But maybe this was the plan all along you create this neoliberal paradise, and slowly but
surely, people will dismantle all but the bare bones of the welfare state.
I believe that one of the fundamental flaws in the logic behind the EU is this assumption
of mobility. Proponents of the EU imagine society to be how it is described in economics
textbooks: a bunch of individual actors seeking to maximize their incomes that don't seem to
exist in any geographic context. The reality is that people are born into families and
communities that speak a language. Most of them probably don't want to just pack up all of
their things, relocate, and leave their family and home behind every time they get a new job.
People throughout history have always had a very strong connection to the land on which they
were raised and the society into which they were brought up; more accurately, for most of
human history, this formed the entire existence, the entire universe, of most people
(excluding certain oppressed groups, such as slaves or the conquered).
Human beings are not able to move as freely as capital. While euros in Greece can be sent
to and used instantly in Germany, it is not so easy for a Greek person to leave the society
that their ancestors have lived in for thousands of years and move to a new country with a
new culture and language. For privileged people that get to travel, this doesn't sound so
bad, but for someone whose family has lived in the same place for centuries and never learned
to speak another language, this experience would be extremely difficult. For many people over
the age of 25, it might not even be a life worth living.
In the past, economic difficulties would lead to a depreciation of a nation's currency and
inflation. But within the current structure of the Eurozone, it results in deflation as euros
escape to the core countries (mainly Germany) and unemployment. Southern Europeans are
expected to leave everything they have ever known behind and move to the countries where
there is work, like Germany or Holland. Maybe for a well-educated worldly 18 year old, that's
not so bad, but what about a newly laid-off working class 35 year-old with a wife and kids
and no college degree? He's supposed to just pick up his family and leave his parents and
relatives behind, learn German, and spend the rest of his life and Germany? His kids now have
to be German? Would he even be able to get a job there, anyway? Doing what? And how is he
supposed to stop this from happening, how is he supposed to organize politically to keep jobs
at home? The Greek government can hardly do anything because the IMF, ECB, and European
Commission (all unelected officials) call the shots and don't give them any fiscal breathing
room (and we saw what happened the last time voters tried to assert their autonomy in the
bailout deal referendum), and the European Parliament doesn't have a serious budget to
actually do anything.
I'm surprised more people don't vote for neo-fascist parties like the
Golden Dawn. Ordinary liberal politics has completely failed them.
"... “‘Populism’ is the label that political elites attach to policies supported by ordinary citizens that they don’t like.” Populism is a movement against the status quo. It represents the beginnings of something new, though it is generally much clearer about what it is against than what it is for. It can be progressive or reactionary, but more usually both. ..."
The neoliberal era is being undermined from two directions. First, if its record of economic
growth has never been particularly strong, it is now dismal. Europe is barely larger than it
was on the eve of the financial crisis in 2007; the United States has done better but even its
growth has been anaemic. Economists such as Larry Summers believe that the prospect for the
future is most likely one of secular stagnation .
Worse, because the recovery has been so weak and fragile, there is a widespread belief that
another financial crisis may well beckon. In other words, the neoliberal era has delivered the
west back into the kind of crisis-ridden world that we last experienced in the 1930s. With this
background, it is hardly surprising that a majority in the west now believe their children will
be worse off than they were. Second, those who have lost out in the neoliberal era are no
longer prepared to acquiesce in their fate – they are increasingly in open revolt. We are
witnessing the end of the neoliberal era. It is not dead, but it is in its early death throes,
just as the social-democratic era was during the 1970s.
A sure sign of the declining influence of neoliberalism is the rising chorus of intellectual
voices raised against it. From the mid-70s through the 80s, the economic debate was
increasingly dominated by monetarists and free marketeers. But since the western financial
crisis, the centre of gravity of the intellectual debate has shifted profoundly. This is most
obvious in the United States, with economists such as Joseph Stiglitz, Paul Krugman, Dani
Rodrik and Jeffrey Sachs becoming increasingly influential. Thomas Piketty's Capital in the
Twenty-First Century has been a massive seller. His work and that of Tony
Atkinson and Angus Deaton have pushed the question of the inequality to the top of the
political agenda. In the UK, Ha-Joon Chang , for long isolated within
the economics profession, has gained a following far greater than those who think economics is
a branch of mathematics.
Meanwhile, some of those who were previously strong advocates of a neoliberal approach, such
as Larry Summers and the Financial Times 's Martin Wolf, have become extremely critical.
The wind is in the sails of the critics of neoliberalism; the neoliberals and monetarists are
in retreat. In the UK, the media and political worlds are well behind the curve. Few recognise
that we are at the end of an era. Old attitudes and assumptions still predominate, whether on
the BBC's Today programme, in the rightwing press or the parliamentary Labour party.
As Thomas
Piketty has shown, in the absence of countervailing pressures, capitalism naturally gravitates towards increasing
inequality. In the period between 1945 and the late 70s, Cold War competition was arguably the biggest such constraint. Since
the collapse of the Soviet Union, there have been none. As the popular backlash grows increasingly irresistible, however, such a
winner-takes-all regime becomes politically unsustainable.
Large sections of the population in both the US and the UK are now in revolt against their lot, as graphically illustrated by
the support for Trump and Sanders in the US and the Brexit vote in the UK. This popular revolt is often described, in a somewhat
denigratory and dismissive fashion, as populism. Or, as Francis Fukuyama writes in a recent excellent essay
in
Foreign Affairs: “‘Populism’ is the label that political elites attach to policies supported by ordinary citizens that
they don’t like.” Populism is a movement against the status quo. It represents the beginnings of something new, though it is
generally much clearer about what it is against than what it is for. It can be progressive or reactionary, but more usually
both.
"... Aditya Chakrabortty ( It's reckless. But a Tory cash splurge could win an election , 3 July) is right to point out the hypocrisy of the political right about public expenditure. While progressive proposals for public spending are decried as burdening the hard-pressed taxpayer, the right is happy to use public money to rescue the banks or boost their electoral chances. ..."
"... As I explain in my book Money: Myths, Truths and Alternatives, neoliberal economics is built on a fairytale about money that distorts our view of how a contemporary public money system operates. It is assumed that public spending depends on extracting money from the market and that money (like gold) is always in short supply. Neither is true. Both the market and the state generate money – the market through bank lending and the state through public spending. Both increase the money supply, while bank loan repayments and taxation reduce it. There is no natural shortage of money – which today mainly exists only as data. ..."
Neoliberal economics and other fairytales about money Politics is not about a
struggle over a fixed pot of money, says Mary Mellor, and the best way to end austerity is to
reject it as an ideology, says Peter McKenna
Aditya Chakrabortty (
It's reckless. But a Tory cash splurge could win an election , 3 July) is right to point
out the hypocrisy of the political right about public expenditure. While progressive proposals
for public spending are decried as burdening the hard-pressed taxpayer, the right is happy to
use public money to rescue the banks or boost their electoral chances.
As I explain in my book Money: Myths, Truths and Alternatives, neoliberal economics is built
on a fairytale about money that distorts our view of how a contemporary public money system
operates. It is assumed that public spending depends on extracting money from the market and
that money (like gold) is always in short supply. Neither is true. Both the market and the
state generate money – the market through bank lending and the state through public
spending. Both increase the money supply, while bank loan repayments and taxation reduce it.
There is no natural shortage of money – which today mainly exists only as data.
The case for austerity missed the point. Politics is not about a struggle over a fixed pot
of money. What is limited are resources (particularly the environment) and human capacity. How
these are best used should be a matter of democratic debate. The allocation of money should
depend on the priorities identified. In this the market has no more claim than the public
economy to be the source of sustainable human welfare.
Professor Mary Mellor Newcastle upon Tyne
• Over the years Aditya Chakrabortty has provided us with powerful critiques of
austerity. His message now – that EU membership "is the best way to end austerity"
– overlooks the fact that the UK was in the EU all that time.
Moreover, the EU's stability and growth pact requires that budget deficits and public debt
be pegged below 3% and 60% of GDP respectively.
Such notions are the beating heart of austerity, and the European commission's excessive
deficit procedure taken against errant states has almost universally resulted in swingeing
austerity programmes. These were approved and monitored by the commission and council, with the
UK only taken off the naughty step in 2017 after years of crippling austerity finally reduced
the deficit to 2.3% of GDP.
The best way to end austerity – and to sway voters – is to reject austerity as
an ideology regardless of remain or leave, and rehabilitate the concept of public investment in
a people's economy.
Peter McKenna
"... The US today is a global empire. Our country's military, ballooning to some 2.1 million in uniform at a time that there is really no significant war underway. US military spending, greater in constant dollars than at any time since WWII, represents 34% of all global military spending, and the US military budget, depending on how one counts it, is larger than the next largest eight-to-ten countries' military budgets combined. ..."
"... And remember -- US empire and militarism is and has always been supported by both political parties. ..."
"... only 32% of Americans say they are "proud" (forget "extremely proud"!) of America's vaunted political system. In a close second for popular disgust, only 37% said they are "proud" of the US health care system. ..."
"... In my view, my country has become the world's leading "rogue" nation, dismissive of all international laws and codes of conduct, actively attacking many countries on its own authority, without the support of UN Security Council resolutions, exonerating war crimes committed by its soldiers, and committed to the first use of nuclear weapons, both as a first strike against major power rivals like Russia and China, and against non-nuclear nations like Iran, and equally dismissive of all efforts, large and small, to respond to the crisis of catastrophic global heating. ..."
The US today is a global empire. Our country's military, ballooning to some 2.1 million
in uniform at a time that there is really no significant war underway. US military spending,
greater in constant dollars than at any time since WWII, represents 34% of all global military
spending, and the US military budget, depending on how one counts it, is larger than the next
largest eight-to-ten countries' military budgets combined.
To show how ridiculously huge the US military is, consider that at $220 billion for fiscal
year 2020, the US budget for Veterans Affairs alone (that's the agency that provides assistance
of all kinds, including medical, to those who served in the military, not counting career
soldiers who receive a pension that is counted separately) this one military budget line item
is larger than the entire military budget of China, and is more than three times as large as
the entire military budget of Russia, considered by many to be our primary "adversary"!
And remember -- US empire and militarism is and has always been supported by both
political parties.
... ... ...
I read that a recent Gallup Organization poll shows a significant drop in the percentage of
US Americans who are "extremely proud" of their country. True, 45% still say they are "proud"
of America, but normally that is how many say they are "extremely proud" to be Americans.
That's a significant fall-off. Even among normally super-patriotic Republicans the percentage
of those saying they are "extremely proud" this July 4 of this country was down to 76%, a 10%
drop from 2003, and close to the 68% low point reached at one point during the Obama
administration.
The main cause of the loss of patriotic ardor appears to be dismay or disgust with the US
political system. According to the poll, only 32% of Americans say they are "proud" (forget
"extremely proud"!) of America's vaunted political system. In a close second for popular
disgust, only 37% said they are "proud" of the US health care system.
So I guess I'm in pretty good company. I won't be oohing and aaahing at the local fireworks
display this year. It's basically a glorification of US war-making anyhow, and there's nothing
at all to be proud of in that regard, particularly with the US in the midst of a $1.5-trillion
upgrade of its nuclear arsenal, threatening war with Iran, pulling out of a Reagan-era treaty
banning intermediate-range nuclear missiles, and embarking in a new arms race both in space and
in virtually unstoppable hypersonic cruise missiles.
In my view, my country has become the world's leading "rogue" nation, dismissive of all
international laws and codes of conduct, actively attacking many countries on its own
authority, without the support of UN Security Council resolutions, exonerating war crimes
committed by its soldiers, and committed to the first use of nuclear weapons, both as a first
strike against major power rivals like Russia and China, and against non-nuclear nations like
Iran, and equally dismissive of all efforts, large and small, to respond to the crisis of
catastrophic global heating. [
At home, the US legal system has become a supine supporter of
virtually unlimited executive power, of unchecked police power, and of repressive actions
against the supposedly constitutionally protected free press.
It's tempting to hope that the decline noted by Gallup in the percent of Americans
expressing "extreme pride" and even of "pride" in the US, but support for the US among the
country's citizens still remains shamefully high in the face of all these negatives.
Anyhow, count me among those who won't be celebrating today's July 4 national
holiday.
"... The key point, is that this happened in the 1980's – 90's. Vast profit possibilities were opening up through digitalization, corporate outsourcing, globalization and the internet. The globalists urgently wanted that money, and had to have political compliance. They found it in Neoliberalism and hijacked both the Conservative Party and the Labour Party, creating "New Labour" (leader Tony Blair) through classless "modernization" following Margaret Thatcher's lead. ..."
"... Great blast by Jonathan Cook – I feel as if he has read my thoughts about the political system keeping the proles in an Orwellian state of serfdom for plunder and abuse under the guise of “democracy” and “freedom”. ..."
"... But the ideas of the Chicago School in cohorts with the Frankfurters and Tavistockers were already undermining our hopeful vision of the world while the think tanks at the foundations, councils and institutes were flooding the academies with the doctrines of hardhead uncompromising Capitalism to suck the blood off the proles into anaemic immiseration and apathetic insouciance. ..."
"... With the working class defeated and gone, where is the spirit of resistance to spring from? Not from the selfishness of the new generation of smartphone addicts whose world has shrunk to the atomic MEism and who refuse to open their eyes to what is staring in their face: debt slavery, for life. Maybe the French can do it again. Allez Gilets Jaunes! ..."
This is a very good article on UK politics, but I would have put more emphasis on the
background. Where we are today has everything to do with how we got here.
The UK has this basic left/right split (Labour/Conservative) reaching far back into its
class based history. Sad to say, but within 5 seconds a British person can determine the
class of the person they are dealing with (working/ middle/ upper) and act accordingly
– referencing their own social background.
Margaret Thatcher was a lower middle class grocer's daughter who gained a rare place at
Oxford University (on her own high intellectual merits), and took on the industrial wreckers
of the radical left (Arthur Scargill etc.). She consolidated her power with the failure of
the 1984-85 Miner's Strike. She introduced a new kind of Conservatism that was more classless
and open to the talents, adopting free market Neoliberalism along with Ronald Reagan. A large
section of the aspirational working class went for this (many already had middle class
salaries) and wanted that at least their children could join the middle class through the
university system.
The key point, is that this happened in the 1980's – 90's. Vast profit possibilities
were opening up through digitalization, corporate outsourcing, globalization and the
internet. The globalists urgently wanted that money, and had to have political compliance.
They found it in Neoliberalism and hijacked both the Conservative Party and the Labour Party,
creating "New Labour" (leader Tony Blair) through classless "modernization" following
Margaret Thatcher's lead.
The story now, is that the UK public realize that the Globalist/Zionist/SJW/Open
Frontiers/ Neoliberal crowd are not their friends . So they (the public) are backtracking
fast to find solid ground. In practice this means 1) Leave the Neoliberal/Globalist EU (which
has also been hijacked) using Brexit 2) Recover the traditional Socialist Labour Party of
working people through Jeremy Corbyn 3) Recover the traditional Conservative Party ( Britain
First) through Nigel Farage and his Brexit movement.
Hence the current and growing gulf that is separating the British public from its
Zio-Globalist elite + their media propagandists (BBC, Guardian etc.).
She introduced a new kind of Conservatism that was more classless …
Or just plain anti-working class.
It was actually Thatcher who started the neo-liberal revolution in Britain. To the extent
that she refused to finish it, the elites had Tony Blair in the wings waiting to go.
Great blast by Jonathan Cook – I feel as if he has read my thoughts about the
political system keeping the proles in an Orwellian state of serfdom for plunder and abuse
under the guise of “democracy” and “freedom”. Under this system if
anyone steps out of line is indeed sidelined for the “anti-semitic” treatment,
demonized, vilified and, virtually hanged and quartered on the public square of the
mendacious media.
In the good old days, when there was a militant working class and revolting (!) unionism,
we would get together at meetings, organize protests and strikes and confront bosses and
officialdom. There was camaraderie, solidarity, loyalty and confident defiance that we were
fighting for a better world for ourselves and our children – and also for people less
fortunate than us in other countries.
But the ideas of the Chicago School in cohorts with the Frankfurters and Tavistockers were
already undermining our hopeful vision of the world while the think tanks at the foundations,
councils and institutes were flooding the academies with the doctrines of hardhead
uncompromising Capitalism to suck the blood off the proles into anaemic immiseration and
apathetic insouciance.
... ... ... .
With the working class defeated and gone, where is the spirit of resistance to spring
from? Not from the selfishness of the new generation of smartphone addicts whose world has
shrunk to the atomic MEism and who refuse to open their eyes to what is staring in their
face: debt slavery, for life. Maybe the French can do it again. Allez Gilets Jaunes!
@Miro23
ic get pissed off and vote in the conservatives who then privatise everything. And this game
continues on and on. The British public are literally headless chickens running around not
knowing what on earth is going on. They’re not interested in getting to the bottom of
why society is the way it is. They’re all too comfortable with their mortgages, cars,
holidays twice a year, mobile phones, TV shows and football.
When all of this disappears,
then certainly, they will start asking questions, but when that time comes they will be
utterly powerless to do anything, as a minority in their own land. Greater Israel will be
built when that time comes.
No one at the time had much idea about Neoliberalism and none at all about Globalization.
This was all in the future.
And it was the British working class who were really cutting their own throats, by
wrecking British industry (their future employment), with constant political radicalism and
strikes.
"... That distrust of the establishment has had highly visible political consequences: Farage, Trump, and Le Pen on the right; but also in new parties on the left ..."
In the years that followed, the crash, the crisis of the eurozone and the worldwide drop in
the price of oil and other commodities combined to put a huge dent in global trade. Since 2012,
the IMF reported in its World Economic Outlook for October 2016
, trade was growing at 3% a year – less than half the average of the previous three
decades. That month, Martin Wolf argued in a column that globalisation had "lost dynamism", due
to a slackening of the world economy, the "exhaustion" of new markets to exploit and a rise in
protectionist policies around the world. In an interview earlier this year, Wolf suggested
to me that, though he remained convinced globalisation had not been the decisive factor in
rising inequality, he had nonetheless not fully foreseen when he was writing Why Globalization
Works how "radical the implications" of worsening inequality "might be for the US, and
therefore the world".
Among these implications appears to be a rising distrust of the establishment that is blamed
for the inequality. "We have a very big political problem in many of our countries," he said.
"The elites – the policymaking business and financial elites – are
increasingly disliked . You need to make policy which brings people to think again that
their societies are run in a decent and civilised way."
That distrust of the establishment has had highly visible political consequences: Farage,
Trump, and Le Pen on the right; but also in new parties on the left, such as Spain's Podemos,
and curious populist hybrids, such as Italy's
Five Star Movement . As in 1997, but to an even greater degree, the volatile political
scene reflects public anxiety over "the process that has come to be called
'globalisation'".
If the critics of globalisation could be dismissed before because of their lack of economics
training, or ignored because they were in distant countries, or kept out of sight by a wall of
police, their sudden political ascendancy in the rich countries of the west cannot be so easily
discounted today.
"... Both neoliberal-driven governments and authoritarian societies share one important factor: They care more about consolidating power in the hands of the political, corporate and financial elite than they do about investing in the future of young people and expanding the benefits of the social contract and common good. ..."
"... Michael Yates (economist) points out throughout his book 'The Great Inequality', capitalism is devoid of any sense of social responsibility and is driven by an unchecked desire to accumulate capital at all costs. As power becomes global and politics remains local, ruling elites no longer make political concessions to workers or any other group that they either exploit or consider disposable. ..."
"... At bottom, neoliberals believe in a social hierarchy of "haves" and "have nots". They have taken this corrosive social vision and dressed it up with a "respectable" sounding ideology which all boils down to the cheap labor they depend on to make their fortunes. ..."
"... The ugly truth is that cheap-labour conservatives just don't like working people. They don't like "bottom up" prosperity, and the reason for it is very simple. "Corporate lords" have a harder time kicking them around. ..."
Both neoliberal-driven governments and authoritarian societies share one important factor:
They care more about consolidating power in the hands of the political, corporate and
financial elite than they do about investing in the future of young people and expanding the
benefits of the social contract and common good.
Michael Yates (economist) points out throughout his book 'The Great Inequality', capitalism
is devoid of any sense of social responsibility and is driven by an unchecked desire to
accumulate capital at all costs. As power becomes global and politics remains local, ruling
elites no longer make political concessions to workers or any other group that they either
exploit or consider disposable.
At bottom, neoliberals believe in a social hierarchy of "haves" and "have nots". They have
taken this corrosive social vision and dressed it up with a "respectable" sounding ideology
which all boils down to the cheap labor they depend on to make their fortunes.
The ugly truth is that cheap-labour conservatives just don't like working people. They
don't like "bottom up" prosperity, and the reason for it is very simple. "Corporate lords"
have a harder time kicking them around.
Once you understand this about the cheap-labor
conservatives, the real motivation for their policies makes perfect sense. Remember,
cheap-labour conservatives believe in social hierarchy and privilege, so the only prosperity
they want is limited to them. They want to see absolutely nothing that benefits those who
work for an hourly wage.
You also need to remember that voting the coalition out, which you need to do, will not
necessarily give you a neoliberal free zone; Labor needs to shed some the dogma as well.
From
Unz
comment: "Tangentially related, but check out this great interview with Putin:
https://www.ft.com/content/878d2344-98f0-11e9-9573-ee5cbb98ed36 The man's intelligence and seriousness is always impressive. The contrast with the nauseating rubbish that
comes out of Western politicians could not be more striking, no wonder they hate the guy."
Notable quotes:
"... "One of the things we must do in Russia is never to forget that the purpose of the operation and existence of any government is to create a stable, normal, safe and predictable life for the people and to work towards a better future ." ..."
"... Putin has recognized the influence of our "regime change" wars on the immigrant problem in Europe. He addressed it forcefully in his UN General Assembly speech in 2015 where he asks NATO "Do you know what you've done?" with regards to creating the immigration problems in Europe. Watch here https://youtu.be/q13yzl6k6w0. ..."
"... From Putin's 2007 Munich speech to this 2015 UN speech and many interviews along the way, I've learned to pay attention to what Putin says. He seems to have an extremely good handle on world events and where they are leading. ..."
"... The neoliberal economic plan is to suck the wealth out of the working class and funnel it up to the top 10%, especially the 1%. How to keep the working class from noticing the theft? ..."
"... neo-liberalism (aka "crony capitalism") is about compromising the state and the society that it protects in favor of wealthy, powerful interests. Thus, at it's core, it's against the people. ..."
"... Look at the whine ass, crying, warmongering. narcissist psychopathic bullies we get. I am envious of the Russians having a leader they can be proud of. ..."
"... Been about 60 years since I have had a president to be proud of, back when America WAS great,,, and they killed him. ..."
Putin said in an interview with the Financial Times Friday that the "[neo]liberal idea has
become obsolete," and referred to Germany's decision to welcome more than one million
refugees -- many fleeing savage urban warfare in Syria -- as a "cardinal mistake."
It is only the last part of the very long interview, where Putin indeed speaks of the
'obsolesce' of the '[neo]liberal idea', that seems to be of interest to the media. Most of the
interview is in fact about other issues. The media also do not capture how his 'obsolete'
argument is ingrained in the worldview Putin developed, and how it reflects in many of his
answers.
Here are excerpts that show that the gist of Putin's 'obsolete' argument is not against the
'[neo]liberal idea', but against what may be best called 'international
(neo-)[liberalism'.
Putin explains why U.S. President Donald Trump was elected:
Has anyone ever given a thought to who actually benefited and what benefits were gained from
globalisation, the development of which we have been observing and participating in over the
past 25 years, since the 1990s?
China has made use of globalisation, in particular, to pull millions of Chinese out of
poverty.
What happened in the US, and how did it happen? In the US, the leading US companies -- the
companies, their managers, shareholders and partners -- made use of these benefits. [..] The
middle class in the US has not benefited from globalisation; it was left out when this pie
was divided up.
The Trump team sensed this very keenly and clearly, and they used this in the election
campaign. It is where you should look for reasons behind Trump's victory, rather than in any
alleged foreign interference.
On Syria:
Primarily, this concerns Syria, we have managed to preserve Syrian statehood, no matter what,
and we have prevented Libya-style chaos there. And a worst-case scenario would spell out
negative consequences for Russia.
...
I believe that the Syrian people should be free to choose their own future.
...
When we discussed this matter only recently with the previous US administration, we said,
suppose Assad steps down today, what will happen tomorrow?
Your colleague did well to laugh, because the answer we got was very amusing. You cannot
even imagine how funny it was. They said, "We don't know." But when you do not know what
happens tomorrow, why shoot from the hip today? This may sound primitive, but this is how it
is.
On 'western' interventionism and 'democracy promotion':
Incidentally, the president of France said recently that the American democratic model
differs greatly from the European model. So there are no common democratic standards. And do
you, well, not you, but our Western partners, want a region such as Libya to have the same
democratic standards as Europe and the US? The region has only monarchies or countries with a
system similar to the one that existed in Libya.
But I am sure that, as a historian, you will agree with me at heart. I do not know whether
you will publicly agree with this or not, but it is impossible to impose current and viable
French or Swiss democratic standards on North African residents who have never lived in
conditions of French or Swiss democratic institutions. Impossible, isn't it? And they tried
to impose something like that on them. Or they tried to impose something that they had never
known or even heard of. All this led to conflict and intertribal discord. In fact, a war
continues in Libya.
So why should we do the same in Venezuela? ...
Asked about the turn towards nationalism and more rightwing policies in the U.S. and many
European countries, Putin names immigration as the primary problem:
What is happening in the West? What is the reason for the Trump phenomenon, as you said, in
the US? What is happening in Europe as well? The ruling elites have broken away from the
people. The obvious problem is the gap between the interests of the elites and the
overwhelming majority of the people .
Of course, we must always bear this in mind. One of the things we must do in Russia is
never to forget that the purpose of the operation and existence of any government is to
create a stable, normal, safe and predictable life for the people and to work towards a
better future.
There is also the so-called [neo]liberal idea, which has outlived its purpose. Our Western
partners have admitted that some elements of the [neo]liberal idea, such as multiculturalism,
are no longer tenable.
When the migration problem came to a head, many people admitted that the policy of
multiculturalism is not effective and that the interests of the core population should be
considered. Although those who have run into difficulties because of political problems in
their home countries need our assistance as well. That is great, but what about the interests
of their own population when the number of migrants heading to Western Europe is not just a
handful of people but thousands or hundreds of thousands?
...
What am I driving at? Those who are concerned about this, ordinary Americans, they look at
this and say, Good for [Trump], at least he is doing something, suggesting ideas and looking
for a solution.
As for the [neo]liberal idea, its proponents are not doing anything. They say that all is
well, that everything is as it should be. But is it? They are sitting in their cosy offices,
while those who are facing the problem every day in Texas or Florida are not happy, they will
soon have problems of their own. Does anyone think about them?
The same is happening in Europe. I discussed this with many of my colleagues, but nobody
has the answer. The say they cannot pursue a hardline policy for various reasons. Why
exactly? Just because. We have the law, they say. Well, then change the law!
We have quite a few problems of our own in this sphere as well.
...
In other words, the situation is not simple in Russia either, but we have started working to
improve it. Whereas the [neo]liberal idea presupposes that nothing needs to be done. The
migrants can kill, plunder and rape with impunity because their rights as migrants must be
protected. What rights are these? Every crime must have its punishment.
So, the [neo]liberal idea has become obsolete. It has come into conflict with the
interests of the overwhelming majority of the population. Or take the traditional values. I
am not trying to insult anyone, because we have been condemned for our alleged homophobia as
it is. But we have no problems with LGBT persons. God forbid, let them live as they wish. But
some things do appear excessive to us.
They claim now that children can play five or six gender roles. I cannot even say exactly
what genders these are, I have no notion. Let everyone be happy, we have no problem with
that. But this must not be allowed to overshadow the culture, traditions and traditional
family values of millions of people making up the core population.
While Putin says that [neo]liberalism is 'obsolete' he does not declare it dead. He sees it
as part of a spectrum, but says that it should not have a leading role:
You know, it seems to me that purely [neo]liberal or purely traditional ideas have never
existed. Probably, they did once exist in the history of humankind, but everything very
quickly ends in a deadlock if there is no diversity. Everything starts to become extreme one
way or another.
Various ideas and various opinions should have a chance to exist and manifest themselves,
but at the same time interests of the general public, those millions of people and their
lives, should never be forgotten. This is something that should not be overlooked.
Then, it seems to me, we would be able to avoid major political upheavals and troubles.
This applies to the [neo]liberal idea as well. It does not mean (I think, this is ceasing to
be a dominating factor) that it must be immediately destroyed. This point of view, this
position should also be treated with respect.
They cannot simply dictate anything to anyone just like they have been attempting to do
over the recent decades. Diktat can be seen everywhere: both in the media and in real life.
It is deemed unbecoming even to mention some topics. But why?
For this reason, I am not a fan of quickly shutting, tying, closing, disbanding
everything, arresting everybody or dispersing everybody. Of course, not. The [neo]liberal
idea cannot be destroyed either; it has the right to exist and it should even be supported in
some things. But you should not think that it has the right to be the absolute dominating
factor. That is the point. Please.
There is much more in the interview - about Russia's relations with China, North Korea, the
Skripal incident, the Russian economy, orthodoxy and the [neo]liberal attack on the Catholic
church, multilateralism, arms control and the G-20 summit happening today.
But most '[neo]liberal' media will only point to the 'obsolete' part and condemn Putin for
his rallying against immigration. They will paint him as being in an alt-right corner. But even
the Dalai Lama, held up as an icon by many [neo]liberals, says that "Europe is for
Europeans" and that immigrants should go back to their own countries.
Moreover, as Leonid Bershidsky
points out , Putin himself is, with regards to the economy and immigration, a staunch
[neo]liberal:
Putin's cultural conservatism is consistent and sincere.
...
On immigration, however, Putin is, in practice, more [neo]liberal than most European leaders.
He has consistently resisted calls to impose visa requirements on Central Asian countries, an
important source of migrant labor. Given Russia's shrinking working-age population and
shortage of manual workers, Putin isn't about to stem that flow, even though Central Asians
are Muslims – the kind of immigrants Merkel's opponents, including Trump, distrust and
fear the most.
What Putin is aiming at, says Bershidsky, is the larger picture:
[W]hat Putin believes has outlived its usefulness isn't the [neo]liberal approach to
migration or gender, nor is it [neo]liberal economics – even though Russia has, in
recent months, seen something of a shift toward central planning. It is the [neo]liberal
world order. Putin wants to keep any talk of values out of international politics and forge
pragmatic relationships based on specific interests.
...
Putin's drive to put global politics on a more transactional basis isn't easy to defeat; it's
a siren song, and the anti-immigrant, culturally conservative rhetoric is merely part of the
music.
There is in my view no 'siren-song' there and nothing that has to be defeated. It is just
that Putin is more willing to listen to the people than most of the western wannabe
'elite'.
The people's interest is simply not served well by globalization, [neo]liberal
internationalism and interventionism. A transactional approach to international policies, with
respect for basic human decency, is in almost every case better for them.
Politicians who want the people's votes should listen to them, and to Vladimir Putin.
Posted by b on June 28, 2019 at 01:50 PM |
Permalink
It is hard to exaggerate Putin's accomplishments. He almost single-handedly saved Russia from
the chaos of the Yeltsin era and near collapse. He has reestablished Russia as a major power.
In the face of the American world rampage, he has helped stabilize MENA. By merging Russia's
Eurasian Union with China's OBOR, he has helped to set Eurasia on a road to peaceful economic
development. He has even managed to get China, India, and Pakistan talking to one another and
cooperating in a variety of Eurasian projects.
I doubt he has more than 10 years left as a Russian leader, and maybe not even that. When
he finally passes, he will be remembered as another Churchill or Bismarck.
Hmmm... Putin says the problem is 'multi-culturalism', 'migrants'? What kind of bullshit is
this?
Putin doesn't mention that the migrant crisis was caused by Western resource wars, in
Syria, Libya and elsewhere. That neoliberalism's impact on the poor countries has led to
the vast exodus into Europe and N. America.
I have a feeling that Putin is playing the 'RT game', targeting those disaffected people,
who have, in turn been the target of racist, islamaphobic propaganda by Western states,
states that for obvious reasons (self-incrimination) won't state the real reasons for
the exodus.
The page on [neo]liberalism in the classic sense the way it was envisioned in the late 18th
and 19th century has long been passed. [neo]liberalism as in nurturing the human soul and
intellect and allowing each individual to draw on their qualities and contribute to society
with their fullest potential has been supplanted by material and physical liberties alone
(Gender, Sexuality, Free Trade, Free Migration aka Free Movement of Slave Labor etc). What
today is called [neo]liberalism, which I like to equate with neo-[neo]liberalism and social
'progressivism', are both parts of post-modernism, a societal model that is falling and
failing under its own weight of hubris and inconsistencies.
The 'Do as thou wilt' mindset pushed on the people by the elites is deliberate with the
only end goal of creating their 'ideal' world. A world not based on morality, spirituality
and absolute truths, but relativism, materialism, loss of basic notions such as gender,
family, belonging, in short loss of identity and purpose for mankind to obtain ever greater
control over the masses. People are beginning to notice it, however, even if only
subconsciously and start to push back against it. Putin knows this, and that is what he is
laying out in his interview.
"They claim now that children can play five or six gender roles. I cannot even say exactly
what genders these are, I have no notion. Let everyone be happy, we have no problem with
that. But this must not be allowed to overshadow the culture, traditions and traditional
family values of millions of people making up the core population.'
It has become la la land in the West in regards to gender...if a person wants to be gay,
be gay, but let's not force everyone else to pretend reality is not reality..nature choose
(dichotomy) for you to be male or female, sucks if that doesn't match your preferences but
better luck next life...accept the reality you are in and let's not force everyone one else
to pander to your delusions..
See also:
'Sex change' is biologically impossible," said McHugh. "People who undergo
sex-reassignment surgery do not change from men to women or vice versa. Rather, they become
feminized men or masculinized women. Claiming that this is civil-rights matter and
encouraging surgical intervention is in reality to collaborate with and promote a mental
disorder."
I'm reading the Kremlin's transcript I linked to at the Gabbard thread where I posted a very
short excerpt. I continue to read it but stopped to post another very short excerpt IMO is
very important:
"One of the things we must do in Russia is never to forget that the purpose of the
operation and existence of any government is to create a stable, normal, safe and predictable
life for the people and to work towards a better future ." [My Emphasis]
Here are excerpts that show that the gist of Putin's 'obsolete' argument is not against the
'[neo]liberal idea', but against what may be best called 'international
(neo-)liberalism'.
Just a matter of academic rigour: liberalism is extinct; neoliberalism is
literally the "new liberalism", it's successor doctrine. Therefore, when we speak of
"liberalism" after 1945, we're automatically referring to neoliberalism.
neoliberalism was created at Mont Pelerin in the 1930s, and its founding narrative
states that everything that happened between/since the death of liberalism (1914-1918)
and their own hegemony (1974-75) was an abortion of History and should've never happened.
Hence the name "neoliberalism": the new liberalism (adapted to the system of fiat
currency instead of the gold standard); the revival of liberalism; the return of
liberalism (the [neo]liberals).
It's also important to highlight that neoliberalism is not an ideology, but a
doctrine (which encompass mainly policies, but may also encompass ideals). It is wrong, for
example, to compare socialism with neoliberalism (socialism as anti-neoliberalism):
socialism is a scientific theory, and, as a social theory, encompasses a new socioeconomic
system, a new set of ideologies, a new set of cultures and a new set of political doctrines.
Neoliberalism, therefore, is just one aspect with which the capitalist elites engage
against socialism historically (in the doctrinal "front").
Generic question: How many of the 2020 candidates for US President could hold up their end of
an interview with such knowledge and style?
Personally I was impressed by Putin's bluntness in stating Merkel had made a "cardinal
mistake" when she opened the borders to the hundreds of thousands of illegals. And also
this:
And we set ourselves a goal, a task -- which, I am certain, will be achieved -- to adjust
pensions by a percentage that is above the inflation rate.
Compare that to the deliberate US policy if doing the exact opposite.
Can you imagine Trump writing like this? Or Obama, for that matter? Or Bush the Dimmer, or
Clinton, or Bush the Spook, or Reagan, or Carter...Hell, you'd have to go back to JFK to find
this sort of skill with language and deep analysis. And maybe not then. "They" say you get
the leaders you deserve. In that case the Russians have been nice and we Americans have been
very, very naughty.
Putin has recognized the influence of our "regime change" wars on the immigrant problem in
Europe. He addressed it forcefully in his UN General Assembly speech in 2015 where he asks
NATO "Do you know what you've done?" with regards to creating the immigration problems in
Europe. Watch here https://youtu.be/q13yzl6k6w0.
From Putin's 2007 Munich speech to this 2015 UN speech and many interviews along the way,
I've learned to pay attention to what Putin says. He seems to have an extremely good handle
on world events and where they are leading.
In the west our governments call Mr Putin a thug, a gangster. But, I've never seen any of our
politicians sit down and frankly and comprehensively lay out there views, goals, thoughts and
musings. To be a good leader or politician you have do have vision, but in the west here i
just see talking heads and soundbites, no soul.
Oh, yeah, the "[neo]liberals" are indignant over his pointing out that mass migration causes
social disruption.
He racist!
The neoliberal economic plan is to suck the wealth out of the working class and funnel
it up to the top 10%, especially the 1%. How to keep the working class from noticing the
theft?
How about divide and conquer? That seems to work. Take the native working class and divide it
any way that works in that society. In the US, traditionally, it was race, but they added sex
a couple of decades ago, then opened the doors to immigration and threw in national origin,
and now, just for kicks and giggles, everybody gets to define their own gender and sexual
preferences. Awesome. The US is now divided into 243,000,000 separate categories of
specialness. And if you don't accept everything someone else tells you as gospel, you are a
bigot of some sort (depending on their self identification. It varies.)
They divided up Yemen and Libya by tribes, Iraq and Yugoslavia by religion, it works the same
in every country.
When the US blows, it's going to be spectacular.
I'm always impressed with Putin's grasp and breadth a la Chirac, whom he admires and
emulates.
I posted a few excerpts I felt very important to this and the Gabbard threads; and at the
latter I now insist this interview be read, not just suggested. That BigLie Media chose to
pounce on Putin's critique of the [neo]liberal Idea displays its agenda and its extremely
sorry attempt to discredit/smear Putin yet again. IMO, such media smeared itself. The
give-and-take was very productive and informative, containing many lessons, a few of which I
pointed to.
Putin's now at the G-20 and has already had one bilateral meeting with TrumpCo.
Sputnik offers this recap that includes links to its additional articles published
during the day. Much has occurred, and Trump has yet to storm out. Some of the photos are
priceless, the May/Putin handshake perhaps being the most telling.
That there is a Putin that today leads a great country like Russia seems like a miracle and
he appeared at the very moment that Russia needed him.
Part of the West elite hate of Putin is that compared to them he gives off an aura of
honesty and truthfulness that is absent from leaders in the West.
The "multi-cultural" issue, to the extent that it is an issue, is only an issue as an
effect of the actual problem. It is effectively a scapegoat. No one would care about
"multiculturalism" if there was a fair economic order in which living standards were
increasing.
The problem is that western capitalism wants it both ways, it sees the
demographic problem it faces and it wants the labor of migrants but it does not want to
improve society, it wants to keep its slice of the pie. Hence things will get economically
worse while migrants will be an easy "cause" at which to point for the unthinking person. In
that sense it becomes a problem insofar as it contributes to fascism, nothing else
changing.
Putin is right about China utilizing globalization to the benefit of society while
the west is only interested in globalization insofar as it opens markets and creates profit
for those who own social production. But of course Marx predicted this all long ago, so it is
not perhaps surprising that the Chinese Communist Party would be more intelligent here. There
is nothing more symptomatic or demonstrative here than the fact that, while western countries
debate over a few tens of thousands of immigrants being "too many", China is capable of such
feats as eradicating poverty and building incredible and modern infrastructure while being a
land of over a billion people.
Reading over the Gabbard comments, I was reminded of another big divide in the US by party.
Americans treat their parties like their tribes and viciously attack heretics of other
tribes. The media fans the flames and keeps the "elections" going for years, without a
break.
Meanwhile, our ruling overlords pick their next puppet, let us all "vote" on computerized
machines, and then the talking heads announce the "winner".
And it all starts over.
neo-liberalism (aka "crony capitalism") is about compromising the state and the society
that it protects in favor of wealthy, powerful interests. Thus, at it's core, it's against
the people.
To compensate and distract from this corruption, the people are presented with the
'fruits' of a [neo]liberal society: quasi"-freedoms" like gender rights, civil rights, and
human rights. I say "quasi-" because these rights are abridged by the powerful elite as they
see fit (witness rendition and torture, pervasive surveillance, and Assange).
We fight among ourselves about walls and bathrooms as elites destroy the Commons. In this
way, they pick our pockets and kneecap our ability to fight back at the same time.
Boy did Russia luck out. Yeltsin was smart picking this man.... Look at the whine ass,
crying, warmongering. narcissist psychopathic bullies we get. I am envious of the Russians
having a leader they can be proud of.
Been about 60 years since I have had a president to be proud of, back when America WAS
great,,, and they killed him.
"... Putin said: "[neo]liberals] cannot simply dictate anything to anyone just like they have been attempting to do over the recent decades." ..."
"... Putin said: "What happened in the US, and how did it happen? In the US, the leading US companies -- the companies, their managers, shareholders and partners -- made use of these benefits. The middle class hardly benefited from globalization. The Trump team sensed this very keenly and clearly, and they used this in the election campaign. It is where you should look for reasons behind Trump's victory, rather than in any alleged foreign interference." ..."
In an exclusive interview with FT on Thursday, Russian
President Vladimir Putin touted the growth of national populism in Europe and America while
saying that [neo]liberalism is "spent" as an ideology. He spoke on numerous issues at length,
which we have broken down here by topic.
[neo]liberal Governments
On the eve of the G20 summit, Putin said that the "[neo]liberal idea" had "outlived its
purpose" as the public has turned against immigration and multiculturalism. His push back on
[neo]liberalism aligns Putin with leaders like US president Donald Trump, Hungary's Viktor
Orban, Matteo Salvini in Italy, and the Brexit insurgency in the UK.
Putin said: "[neo]liberals] cannot simply dictate anything to anyone just like they have
been attempting to do over the recent decades."
Immigration and Refugees
He said that Chancellor Angela Merkel's decision to admit over 1 million refugees to German
was a "cardinal mistake" and praised President Trump for trying to stop migrants and drugs from
Mexico.
Putin said: "This [neo]liberal idea presupposes that nothing needs to be done. That migrants
can kill, plunder and rape with impunity because their rights as migrants have to be protected.
Every crime must have its punishment. The [neo]liberal idea has become obsolete. It has come
into conflict with the interests of the overwhelming majority of the population."
On Election Interference
While Putin has been targeted in the U.S., namely for attempting to intervene in the
country's elections, Putin denied it and called the idea "mythical interference".
Putin said: "What happened in the US, and how did it happen? In the US, the leading US
companies -- the companies, their managers, shareholders and partners -- made use of these
benefits. The middle class hardly benefited from globalization. The Trump team sensed this very
keenly and clearly, and they used this in the election campaign. It is where you should look
for reasons behind Trump's victory, rather than in any alleged foreign interference."
The China/U.S. Trade War
With regard to the ongoing trade war between the U.S. and China, Putin called the situation
"explosive", blaming the issue on American unilateralism.
"Our relations with China are not motivated by timeserving political or any other
considerations. China is showing loyalty and flexibility to both its partners and opponents.
Maybe this is related to the historical features of Chinese philosophy, their approach to
building relations," Putin said.
A New Nuclear Arms Race
He also expressed concern about a new nuclear arms race.
"The cold war was a bad thing . . . but there were at least some
rules that all participants in international communication more or less adhered to or tried to
follow. Now, it seems that there are no rules at all," Putin said.
... ... ...
The Russian Economy
Speaking about his own country, Putin said: "Real wages are not in decline in Russia. On the
contrary, they are starting to pick up. The macroeconomic situation in the country is stable.
As for the central bank, yes, it is engaged in a gradual improvement of our financial system:
inefficient and small-capacity companies, as well as semi-criminal financial organizations are
leaving the market, and this is large-scale and complicated work."
"... If I were a particularly cynical analyst, it might look to me like global capitalism, starting right around 1990, freed by the collapse of the U.S.S.R. to do whatever the hell it wanted, more or less immediately started dismantling uncooperative power structures throughout the Greater Middle East. My cynical theory would kind of make sense of the "catastrophic policy blunders" that the United States has supposedly made in Iraq, Libya, and throughout the region, not to mention the whole "Global War on Terror," and what it is currently doing to Syria, and Iran. ..."
"... Take a look at that map again. What you're looking at is global capitalism cleaning up after winning the Cold War. And yes, I do mean global capitalism, not the United States of America (i.e., the "nation" most Americans think they live in, despite all evidence to the contrary). I know it hurts to accept the fact that "America" is nothing but a simulation projected onto an enormous marketplace but seriously, do you honestly believe that the U.S. government and its military serve the interests of the American people? If so, go ahead, review the history of their activities since the Second World War, and explain to me how they have benefited Americans not the corporatist ruling classes, regular working class Americans, many of whom can't afford to see a doctor, or buy a house, or educate their kids, not without assuming a lifetime of debt to some global financial institution. ..."
"... OK, so I digressed a little. The point is, "America" is not at war with Iran. Global capitalism is at war with Iran. The supranational corporatist empire. Yes, it wears an American face, and waves a big American flag, but it is no more "American" than the corporations it comprises, or the governments those corporations own, or the military forces those governments control, or the transnational banks that keep the whole show running. ..."
If I were a particularly cynical analyst, it might look to me like global capitalism,
starting right around 1990, freed by the collapse of the U.S.S.R. to do whatever the hell it
wanted, more or less immediately started dismantling uncooperative power structures throughout
the Greater Middle East. My cynical theory would kind of make sense of the "catastrophic policy
blunders" that the United States has supposedly made in Iraq, Libya, and throughout the region,
not to mention the whole "Global War on Terror," and what it is currently doing to Syria, and
Iran.
Take a good look at
this Smithsonian map of where the U.S.A. is "combating terrorism." Note how the U.S.
military (i.e., global capitalism's unofficial "enforcer") has catastrophically blundered its
way into more or less every nation depicted. Or ask our "allies" in Saudi Arabia, Israel,
Kuwait, Qatar, Bahrain, Turkey, United Arab Emirates, and so on. OK, you might have to reach
them in New York or London, or in the South of France this time of year, but, go ahead, ask
them about the horrors they've been suffering on account of our "catastrophic blunders."
See, according to this crackpot conspiracy theory that I would put forth if I were a
geopolitical analyst instead of just a political satirist, there have been no "catastrophic
policy blunders," not for global capitalism. The Restructuring of the Greater Middle East is
proceeding exactly according to plan. The regional ruling classes are playing ball, and those
who wouldn't have been regime-changed, or are being regime-changed, or are scheduled for regime
change.
Sure, for the actual people of the region, and for regular Americans, the last thirty years
of wars, "strategic" bombings, sanctions, fomented coups, and other such shenanigans have been
a pointless waste of lives and money but global capitalism doesn't care about people or the
"sovereign nations" they believe they live in, except to the extent they are useful. Global
capitalism has no nations. All it has are market territories, which are either open for
business or not.
Take a look at that map again. What you're looking at is global capitalism cleaning up after
winning the Cold War. And yes, I do mean global capitalism, not the United States of
America (i.e., the "nation" most Americans think they live in, despite all evidence to the
contrary). I know it hurts to accept the fact that "America" is nothing but a simulation
projected onto an enormous marketplace but seriously, do you honestly believe that the U.S.
government and its military serve the interests of the American people? If so, go ahead, review
the history of their activities since the Second World War, and explain to me how they have
benefited Americans not the corporatist ruling classes, regular working class Americans, many
of whom can't afford to see a doctor, or buy a house, or educate their kids, not without
assuming a lifetime of debt to some global financial institution.
OK, so I digressed a little. The point is, "America" is not at war with Iran. Global
capitalism is at war with Iran. The supranational corporatist empire. Yes, it wears an American
face, and waves a big American flag, but it is no more "American" than the corporations it
comprises, or the governments those corporations own, or the military forces those governments
control, or the transnational banks that keep the whole show running.
This is what Iran and Syria are up against. This is what Russia is up against. Global
capitalism doesn't want to nuke them, or occupy them. It wants to privatize them, like it is
privatizing the rest of the world, like it has already privatized America according to my
crackpot theory, of course.
if I were a geopolitical analyst, I might be able to discern a pattern there, and
possibly even some sort of strategy.
Sounds good.
Some other people did it before, wrote it down etc. but it's always good to see that
stuff.
it might look to me like global capitalism, starting right around 1990, freed by the
collapse of the U.S.S.R. to do whatever the hell it wanted, more or less immediately
started dismantling uncooperative power structures throughout the Greater Middle East.
.there have been no "catastrophic policy blunders," not for global capitalism. The
Restructuring of the Greater Middle East is proceeding exactly according to plan. The
regional ruling classes are playing ball, and those who wouldn't have been regime-changed,
or are being regime-changed, or are scheduled for regime change.
Sure, for the actual people of the region, and for regular Americans, the last thirty years
of wars, "strategic" bombings, sanctions, fomented coups, and other such shenanigans have
been a pointless waste of lives and money but global capitalism doesn't care about people
or the "sovereign nations" they believe they live in, except to the extent they are useful.
Global capitalism has no nations. All it has are market territories, which are either open
for business or not.
Spot on.
Now .there IS a bit of oversight in the article re competing groups of people on top of
that "Global capitalist" bunch.
It's a bit more complicated than "Global capitalism".
Jewish heavily influenced, perhaps even controlled, Anglo-Saxon "setup" .. or Russian
"setup" or Chinese "setup".
Only one of them can be on the top, and they don't like each other much.
And they all have nuclear weapons.
"Global capitalism" idea is optimistic. The global overwhelming force against little
players. No chance of MAD there so not that bad.NOPE IMHO.
There is a chance of MAD.
That is the problem . Well, at least for some people.
Globalists are not Capitalists. There is no competition. Just a hand full of monopolies.
These stateless corporate monopolists are better understood as Feudalists. They would have
everything. We would have nothing. That's what privatization is. It's the Lords ripping off
the proles.
I was a union man in my youth. We liked Capitalism. We just wanted our fair share of the
loot. The working class today knows nothing about organizing. They don't even know they are
working class. They think they are black or white. Woke or Deplorable.
ALL OF US non billionaires are coming up on serious hard times. Serious enough that we
might have to put aside our differences. The government is corrupt. It will not save us.
Instead it will continue to work to divide us.
Another great article by C J Hopkins.
Hopkins (correctly) posits that behind US actions, wars etc lies the global capitalist
class.
"Global capitalism has no nations. All it has are market territories, which are either open
for business or not"
This is correct -- but requires an important caveat.
Intrinsic to capitalism is imperialism. They are the head & tail of the same coin.
Global capitalists may unite in their rapacious attacks on average citizens the world over.
However, they will disunite when it comes to beating a competitor to a market.
The "West" has no (real) ideological differences with China, Russia & Iran. This is a
fight between an existing hegemon & it's allies & a rising hegemon (China) & it's
allies.
In many ways it's similar to the WW I situation: an established imperial country, the UK,
& it's allies against a country with imperial pretensions -- Germany (& it's
allies)
To put it in a nice little homily: the Capitalist wolves prefer to eat sheep (us) -- but,
will happily eat each other should they perceive a sufficient interest in doing so.
Globalists are not Capitalists. There is no competition. Just a hand full of
monopolies.
In most key sectors, competition ends up producing monopolies or their near-equivalent,
oligopolies. The many are weeded out (or swallowed up) by the few . The
situation is roughly the same with democracy, which historically has always resulted in
oligarchy, as occurred in ancient Rome and Athens.
Globalists are not Capitalists. There is no competition. Just a hand full of monopolies.
These stateless corporate monopolists are better understood as Feudalists. They would have
everything. We would have nothing. That's what privatization is. It's the Lords ripping off
the proles.
You are right in expecting that in Capitalism there would be competition – the
traditional view that prices would remain low because of competition, the less competitive
removed from the field, and so on. But that was primitive laisser-faire Capitalism on a fair
playing field that hardly existed but in theory. Occasionally there were some "good"
capitalists – say the mill-owner in a Lancashire town who gave employment to the
locals, built houses, donated to charity and went to the Sunday church service with his
workers. But even that "good" capitalist was in it for the profit, which comes from taking
possession for himself of the value added by his workers to a commodity.
But modern Capitalism does not function that way. There are no mill-owners, just absentee
investor playing in, usually rigged, stock market casinos. Industrial capitalism has been
changed into financial Capitalism without borders and loyalty to worker or country. In fact,
it has gone global to play country against country for more profit.
Anyway, the USA has evolved into a Fascist state (an advanced state of capitalism, a.k.a.
corporatocracy) as Chomsky stated many years ago. Seen from abroad here's a view from the
horse's mouth ( The Guardian is official organ of Globalist Fascism).
There is nothing natural about money. There is no link to some scarce essential form of money that sets a limit to its creation.
It can be composed of base metal, paper or electronic data – none of which is in short supply. Similarly – despite what you may have
heard about the need for austerity and a lack of certain cash-generating trees – there is no "natural" level of public expenditure.
The size and reach of the public sector is a matter of political choice.
Which puts austerity, the culling of expenditure in the public economy, under some question. For some countries, such as
Greece , the impact of austerity has been devastating. Austerity policies still persist despite numerous
studies arguing that they were entirely misconceived,
based on political choice rather than economic logic. But the economic case for austerity is equally mistaken: it is based on what
can best be described as fairytale economics.
So what were the justifications? Britain, for example, has lived under an austerity regime since 2010, when the incoming Tory-Liberal
Democrat government reversed the Labour policy of raising the level of public expenditure in response to the 2007-8 financial crisis.
The crisis had created a perfect storm: bank rescue required high levels of public spending while economic contraction reduced tax
income. The case for austerity was that the higher level of public expenditure could not be afforded by the taxpayer. This was supported
by "
handbag economics ", which adopts the analogy of states as being like households, dependent on a (private sector) breadwinner.
Under handbag economics, states are required to restrict their expenditure to what the taxpayer is deemed to be able to afford.
States must not try to increase their spending by borrowing from the (private) financial sector or by "printing money" (although
the banks were rescued by doing so by another name – quantitative
easing , the creation of electronic money).
The ideology of handbag economics claims that money is to be generated only through market activity and that it is always in short
supply. Request for increased public expenditure is almost invariably met with the response "where's the money to come from?" When
confronted by low pay in the NHS, the British prime minister, Theresa May, famously declared, "there is no magic money tree".
So where does money come from? And what is money
anyway? What is money?
Until the last 50 years or so the answer seemed to be obvious: money was represented by cash (notes and coin). When money was
tangible, there seemed no question about its origin, or its value. Coins were minted, banknotes were printed. Both were authorised
by governments or central banks. But what is money today? In richer economies the use of cash is
declining rapidly . Most monetary transactions are based on transfers between accounts: no physical money is involved.
In the run up to the financial crisis, the state's role in relation to money held in bank accounts was ambiguous. Banking was
a monitored and licensed activity with some level of state guarantee of bank deposits, but the actual act of creating bank accounts
was, and is, seen as a private matter. There may be regulations and limitations, but there is
no detailed scrutiny of bank accounts and bank lending.
Yet, as the 2007-8 financial crisis showed, when bank accounts came under threat as banks teetered on the edge of bankruptcy,
states and central banks had to step in and
guarantee the security
of all deposit accounts. The viability of money in non-investment bank accounts was demonstrated to be as much a public responsibility
as cash.
This raises fundamental questions about money as a social institution. Is it right that money can be generated by a private choice
to take on debt, which then becomes a liability of the state to guarantee in a crisis?
But far from seeing money as a public resource, under neoliberal handbag economics, money creation and circulation has increasingly
been seen as a function of the market. Money is "made" solely in the private sector. Public spending is seen as a drain on that money,
justifying austerity to make the public sector as small as possible.
This stance, however, is based on a complete misunderstanding of the nature of money, sustained by a series of deeply embedded
myths.
Myths about money
Neoliberal handbag economics is derived from two key myths about the origin and nature of money. The first is that money emerged
from a previous market economy based on barter. The second is that money was originally made from precious metal.
It is claimed that bartering proved to be very inefficient as each buyer-seller needed to find another person who exactly matched
their requirements. A hat maker might barter a hat for some shoes she needs – but what if the shoe maker is in no need of a hat?
The solution to this problem, so the story goes, was to choose one commodity that everyone desired, to act as a medium of exchange.
Precious metal (gold and silver) was the obvious
choice because it had its own value and could be easily divided and carried. This view of the origin of money goes back to at
least the 18th century: the time of economist
Adam Smith .
The 'father of capitalism' Adam Smith, 1723-1790. Matt Ledwinka/Shutterstock.com
These myths led to two assumptions about money that are still current today. First, that money is essentially connected to, and
generated by, the marketplace. Second that modern money, like its original and ideal form, is always in short supply. Hence the
neoliberal
claim that public spending is a drain on the wealth-creating capacity of the market and that public spending must always be as
limited as possible. Money is seen as a commercial instrument, serving a basic, market, technical, transactional function with no
social or political force.
But the real story of money is very different. Evidence from anthropology and history shows that there was no widespread barter
before markets based on money developed, and precious metal coinage emerged long before market economies. There are also many forms
of money other than precious metal coins.
Money as custom
Something that acts as money has existed in most, if not all, human societies. Stones, shells, beads, cloths, brass rods and many
other forms have been the means of comparing and acknowledging comparative value. But this was rarely used in a market context. Most
early human communities lived directly off the land – hunting, fishing, gathering and gardening. The customary money in such communities
was used mainly to celebrate auspicious social events or serve as a way of resolving social conflict.
For example, the Lele people, who lived in what is now the Democratic Republic of Congo in the 1950s, calculated value in
woven raffia
cloths . The number of cloths required for different occasions was fixed by custom. Twenty cloths should be given to a father
by a son on achieving adulthood and a similar amount given to a wife on the birth of a child. The anthropologist Mary Douglas, who
studied the Lele, found
they were resistant to using the cloths in transactions with outsiders, indicating that the cloths had a specific cultural relevance.
Even stranger is the large stone money of the Yap people of Micronesia. Huge circular discs of stone could weigh up to
four metric tons . Not something to put in your
pocket for a trip to the shops.
Try lugging that to the market. Evenfh/Shutterstock.com
There is plenty of other anthropological evidence such as this all over the world, all pointing to the fact that money, in its
earliest form, served a social rather than market-based purpose.
Money as power
For most traditional societies, the origin of the particular money form has been lost in the mist of time. But the origin and
adoption of money as an institution became much more obvious with the emergence of states. Money did not originate as precious metal
coinage with the development of markets. In fact, the new invention of precious metal coinage in around
600BC was adopted
and controlled by imperial rulers to build their empires by waging war.
Most notable was Alexander the Great, who ruled from 336–323BC. He is said to have used
half a ton of silver a day
to fund his largely mercenary army rather than a share of the spoils (the traditional payment). He had more than 20 mints producing
coins, which had images of gods and heroes and the word Alexandrou (of Alexander). From that time, new ruling regimes have
tended to herald their arrival by a new coinage.
Alexandrou. Alex Coan/Shutterstock.com
More than a thousand years after the invention of coinage, the Holy Roman Emperor Charlemagne (742-814), who ruled most of western
and central Europe, developed what became the basis of the British pre-decimal money system: pounds, shillings and pence. Charlemagne
set up a currency system based on 240 pennies minted from a pound of silver. The pennies became established as the denier in France,
the pfennig in Germany, the dinero in Spain, the denari in Italy and the penny in Britain.
So the real story of money as coinage was not one of barterers and traders: it emerged instead from a long history of politics,
war and conflict. Money was an active agent in state and empire building, not a passive representation of price in the market. Control
of the money supply was a major power of rulers: a sovereign power. Money was created and spent into circulation by rulers either
directly, like Alexander, or through taxation or seizure of private holdings of precious metal.
Nor was early money necessarily based on precious metal. In fact, precious metal was relatively useless for building empires,
because it was in short supply. Even in the Roman era, base metal was used, and Charlemagne's new money eventually became debased.
In China, gold and silver did not feature and paper money was being used as early as the 9th century.
A coin from the time of Charlemagne, 768-814 AD. Classical Numismatic Group, CC BY-SA
What the market economy did introduce was a new form of money: money as debt.
Money as debt
If you look at a £20 banknote you will see it says: "I promise to pay the bearer on demand the sum of twenty pounds." This is
a promise originally made by the Bank of England to exchange notes for the sovereign currency. The banknote was a new form of money.
Unlike sovereign money it was not a statement of value, but a promise of value. A coin, even if made of base metal, was exchangeable
in its own right: it did not represent another, superior, form of money. But when banknotes were first invented, they did.
The new invention of promissory notes emerged through the needs of trade in the 16th and 17th centuries. Promissory notes were
used to acknowledge receipt of loans or investments and the obligation to repay them through the fruits of future transactions. A
major task of the emerging profession of banking was to periodically set all these promises against each other and see who owed what
to whom. This process of "clearing" meant that a great amount of paper commitments was reduced to relatively less actual transfer
of money. Final settlement was either by payment with sovereign money (coins) or another promissory note (banknote).
Eventually, the banknotes became so trusted that they were treated as money in their own right. In Britain they became equivalent
to the coinage, particularly when they were united under the banner of the Bank of England. Today, if you took a banknote to the
Bank of England, it would merely exchange your note for one that is exactly the same. Banknotes are no longer promises, they are
the currency. There is no other "real" money behind them.
What promissory notes became. Wara1982/Shutterstock.com
What modern money does retain is its association with debt. Unlike sovereign money, which was created and spent directly into
circulation, modern money is largely borrowed into circulation through the banking system. This process shelters behind another myth,
that banks merely act as a link between savers and borrowers. In fact, banks create money. And it is only in the last decade that
this powerful myth has been finally put to rest by banking and monetary authorities.
It is now
acknowledged
by monetary authorities such as the IMF, the US Federal Reserve and the Bank of England, that banks are creating new money when
they make loans. They don't lend the money of other account holders to those who want to borrow.
Bank loans consist of money conjured out of thin air, whereby new money is credited to the borrowers account with the agreement
that the amount will eventually be repaid with interest.
The policy implications of the public currency being created out of nowhere and lent to borrowers on a purely commercial basis
have still not been taken on board. Nor has basing a public currency on debt as opposed to the sovereign power to create and directly
circulate money free of debt.
The result is that rather than using their own sovereign power over money creation, as Alexander the Great did, states have become
borrowers from the private sector. Where there are public spending deficits or the need for large scale future expenditure, there
is an expectation that the state will borrow the money or increase taxation, rather than create the money itself.
Creators of cash. Creative Lab/Shutterstock.com
Dilemmas of debt
But basing a money supply on debt is ecologically, socially and economically problematic.
Ecologically, there is a problem because the need to pay off debt could drive potentially
damaging
growth : money creation based on repaying debt with interest must imply constant growth in the money supply. If this is achieved
through increasing productive capacity, there will inevitably be pressure on natural resources.
Basing the money supply on debt is also socially discriminatory because not all citizens are in a position to take on debt. The
pattern of the money supply will tend to favour the already rich or the most speculative risk-taker. Recent decades, for example,
have seen a
huge amount of borrowing by the financial sector to enhance their investments.
The economic problem is that the money supply depends on the capacity of the various elements of the economy (public and private)
to take on more debt. And so as countries have become more dependent upon bank-created money, debt bubbles and credit crunches have
become more frequent.
This is because handbag economics creates an impossible task for the private sector. It has to create all new money through bank-issued
debt and repay it all with interest. It has to completely fund the public sector and generate a profit for investors.
But when the privatised bank-led money supply flounders, the money creating powers of the state come back into clear focus. This
was particularly plain in the 2007-8 crisis, when central banks created new money in the process known as quantitative easing. Central
banks used the sovereign power to create money free of debt to spend directly into the economy (by buying up existing government
debt and other financial assets, for example).
The question then becomes: if the state as represented by the central bank can create money out of thin air to save the banks
– why can't it create money to save the people?
It's a mistake to think of the state as a piggybank or handbag. ColorMaker/Shutterstock.com
Money for the people
The myths about money have led us to look at public spending and taxation the wrong way around. Taxation and spending, like bank
lending and repayment, is in a constant flow. Handbag economics assumes that it is taxation (of the private sector) that is raising
the money to fund the public sector. That taxation takes money out of the taxpayer's pocket.
But the long political history of sovereign power over money would indicate that the flow of money can be in the opposite direction.
In the same way that banks can conjure money out of thin air to make loans, states can conjure money out of thin air to fund public
spending. Banks create money by setting up bank accounts, states create money by allocating budgets.
When governments set budgets they do not see how much money they have in a pre-existing taxation piggybank. The budget allocates
spending commitments that may, or may not, match the amount of money coming in through taxation. Through its accounts in the treasury
and the central bank, the state is constantly spending out and taking in money. If it spends more money than it takes in, it leaves
more money in people's pockets. This creates a budget deficit and what is effectively an overdraft at the central bank.
Is this a problem? Yes, if the state is treated as if it was any other bank account holder – the dependent household of handbag
economics. No, if it is seen as an independent source of money. States do not need to wait for handouts from the commercial sector.
States are the authority behind the money system. The power exercised by the banks to create the public currency out of thin air
is a sovereign power.
It is no longer necessary to mint coins like Alexander, money can be created by keystrokes. There is no reason why this should
be monopolised by the banking sector to create new public money as debt. Deeming public spending as being equivalent to bank borrowing
denies the public, the sovereign people in a democracy, the right to access its own money free of debt.
Money should be designed for the many, not the few. Varavin88/Shutterstock.com
Redefining money
This foray into the historical and anthropological stories about money shows that long-held conceptions – that money emerged from
a previous market economy based on barter, and that it was originally made from precious metal – are fairytales. We need to recognise
this. And we need to capitalise on the public ability to create money.
But it is also important to recognise that the sovereign power to create money is not a solution in itself. Both the state and
bank capacity to create money have advantages and disadvantages. Both can be abused. The reckless lending of the banking sector,
for example, led to the near meltdown of the American and European monetary and financial system. On the other hand, where countries
do not have a developed banking sector, the money supply remains in the hands of the state, with massive room for corruption and
mismanagement.
The answer must be to subject both forms of money creation – bank and state – to democratic accountability. Far from being a technical,
commercial instrument, money can be seen as a social and political construct that has immense radical potential. Our ability to harness
this is hampered if we do not understand what money is
and how it works . Money must become our servant, rather than our master.
theconversation.com The views of individual contributors do not necessarily represent those of the Strategic Culture Foundation.
Tags: Capitalism Neoliberalism
Print this article June
24, 2019 | Editor's Сhoice Neoliberalism Has Tricked Us Into Believing a Fairytale About Where Money Comes From Mary MELLOR
There is nothing natural about money. There is no link to some scarce essential form of money that sets a limit to its creation.
It can be composed of base metal, paper or electronic data – none of which is in short supply. Similarly – despite what you may have
heard about the need for austerity and a lack of certain cash-generating trees – there is no "natural" level of public expenditure.
The size and reach of the public sector is a matter of political choice.
Which puts austerity, the culling of expenditure in the public economy, under some question. For some countries, such as
Greece , the impact of austerity has been devastating. Austerity policies still persist despite numerous
studies arguing that they were entirely misconceived,
based on political choice rather than economic logic. But the economic case for austerity is equally mistaken: it is based on what
can best be described as fairytale economics.
So what were the justifications? Britain, for example, has lived under an austerity regime since 2010, when the incoming Tory-Liberal
Democrat government reversed the Labour policy of raising the level of public expenditure in response to the 2007-8 financial crisis.
The crisis had created a perfect storm: bank rescue required high levels of public spending while economic contraction reduced tax
income. The case for austerity was that the higher level of public expenditure could not be afforded by the taxpayer. This was supported
by "
handbag economics ", which adopts the analogy of states as being like households, dependent on a (private sector) breadwinner.
Under handbag economics, states are required to restrict their expenditure to what the taxpayer is deemed to be able to afford.
States must not try to increase their spending by borrowing from the (private) financial sector or by "printing money" (although
the banks were rescued by doing so by another name – quantitative
easing , the creation of electronic money).
The ideology of handbag economics claims that money is to be generated only through market activity and that it is always in short
supply. Request for increased public expenditure is almost invariably met with the response "where's the money to come from?" When
confronted by low pay in the NHS, the British prime minister, Theresa May, famously declared, "there is no magic money tree".
So where does money come from? And what is money
anyway? What is money?
Until the last 50 years or so the answer seemed to be obvious: money was represented by cash (notes and coin). When money was
tangible, there seemed no question about its origin, or its value. Coins were minted, banknotes were printed. Both were authorised
by governments or central banks. But what is money today? In richer economies the use of cash is
declining rapidly . Most monetary transactions are based on transfers between accounts: no physical money is involved.
In the run up to the financial crisis, the state's role in relation to money held in bank accounts was ambiguous. Banking was
a monitored and licensed activity with some level of state guarantee of bank deposits, but the actual act of creating bank accounts
was, and is, seen as a private matter. There may be regulations and limitations, but there is
no detailed scrutiny of bank accounts and bank lending.
Yet, as the 2007-8 financial crisis showed, when bank accounts came under threat as banks teetered on the edge of bankruptcy,
states and central banks had to step in and
guarantee the security
of all deposit accounts. The viability of money in non-investment bank accounts was demonstrated to be as much a public responsibility
as cash.
This raises fundamental questions about money as a social institution. Is it right that money can be generated by a private choice
to take on debt, which then becomes a liability of the state to guarantee in a crisis?
But far from seeing money as a public resource, under neoliberal handbag economics, money creation and circulation has increasingly
been seen as a function of the market. Money is "made" solely in the private sector. Public spending is seen as a drain on that money,
justifying austerity to make the public sector as small as possible.
This stance, however, is based on a complete misunderstanding of the nature of money, sustained by a series of deeply embedded
myths.
Myths about money
Neoliberal handbag economics is derived from two key myths about the origin and nature of money. The first is that money emerged
from a previous market economy based on barter. The second is that money was originally made from precious metal.
It is claimed that bartering proved to be very inefficient as each buyer-seller needed to find another person who exactly matched
their requirements. A hat maker might barter a hat for some shoes she needs – but what if the shoe maker is in no need of a hat?
The solution to this problem, so the story goes, was to choose one commodity that everyone desired, to act as a medium of exchange.
Precious metal (gold and silver) was the obvious
choice because it had its own value and could be easily divided and carried. This view of the origin of money goes back to at
least the 18th century: the time of economist
Adam Smith .
The 'father of capitalism' Adam Smith, 1723-1790. Matt Ledwinka/Shutterstock.com
These myths led to two assumptions about money that are still current today. First, that money is essentially connected to, and
generated by, the marketplace. Second that modern money, like its original and ideal form, is always in short supply. Hence the
neoliberal
claim that public spending is a drain on the wealth-creating capacity of the market and that public spending must always be as
limited as possible. Money is seen as a commercial instrument, serving a basic, market, technical, transactional function with no
social or political force.
But the real story of money is very different. Evidence from anthropology and history shows that there was no widespread barter
before markets based on money developed, and precious metal coinage emerged long before market economies. There are also many forms
of money other than precious metal coins.
Money as custom
Something that acts as money has existed in most, if not all, human societies. Stones, shells, beads, cloths, brass rods and many
other forms have been the means of comparing and acknowledging comparative value. But this was rarely used in a market context. Most
early human communities lived directly off the land – hunting, fishing, gathering and gardening. The customary money in such communities
was used mainly to celebrate auspicious social events or serve as a way of resolving social conflict.
For example, the Lele people, who lived in what is now the Democratic Republic of Congo in the 1950s, calculated value in
woven raffia
cloths . The number of cloths required for different occasions was fixed by custom. Twenty cloths should be given to a father
by a son on achieving adulthood and a similar amount given to a wife on the birth of a child. The anthropologist Mary Douglas, who
studied the Lele, found
they were resistant to using the cloths in transactions with outsiders, indicating that the cloths had a specific cultural relevance.
Even stranger is the large stone money of the Yap people of Micronesia. Huge circular discs of stone could weigh up to
four metric tons . Not something to put in your
pocket for a trip to the shops.
Try lugging that to the market. Evenfh/Shutterstock.com
There is plenty of other anthropological evidence such as this all over the world, all pointing to the fact that money, in its
earliest form, served a social rather than market-based purpose.
Money as power
For most traditional societies, the origin of the particular money form has been lost in the mist of time. But the origin and
adoption of money as an institution became much more obvious with the emergence of states. Money did not originate as precious metal
coinage with the development of markets. In fact, the new invention of precious metal coinage in around
600BC was adopted
and controlled by imperial rulers to build their empires by waging war.
Most notable was Alexander the Great, who ruled from 336–323BC. He is said to have used
half a ton of silver a day
to fund his largely mercenary army rather than a share of the spoils (the traditional payment). He had more than 20 mints producing
coins, which had images of gods and heroes and the word Alexandrou (of Alexander). From that time, new ruling regimes have
tended to herald their arrival by a new coinage.
Alexandrou. Alex Coan/Shutterstock.com
More than a thousand years after the invention of coinage, the Holy Roman Emperor Charlemagne (742-814), who ruled most of western
and central Europe, developed what became the basis of the British pre-decimal money system: pounds, shillings and pence. Charlemagne
set up a currency system based on 240 pennies minted from a pound of silver. The pennies became established as the denier in France,
the pfennig in Germany, the dinero in Spain, the denari in Italy and the penny in Britain.
So the real story of money as coinage was not one of barterers and traders: it emerged instead from a long history of politics,
war and conflict. Money was an active agent in state and empire building, not a passive representation of price in the market. Control
of the money supply was a major power of rulers: a sovereign power. Money was created and spent into circulation by rulers either
directly, like Alexander, or through taxation or seizure of private holdings of precious metal.
Nor was early money necessarily based on precious metal. In fact, precious metal was relatively useless for building empires,
because it was in short supply. Even in the Roman era, base metal was used, and Charlemagne's new money eventually became debased.
In China, gold and silver did not feature and paper money was being used as early as the 9th century.
A coin from the time of Charlemagne, 768-814 AD. Classical Numismatic Group, CC BY-SA
What the market economy did introduce was a new form of money: money as debt.
Money as debt
If you look at a £20 banknote you will see it says: "I promise to pay the bearer on demand the sum of twenty pounds." This is
a promise originally made by the Bank of England to exchange notes for the sovereign currency. The banknote was a new form of money.
Unlike sovereign money it was not a statement of value, but a promise of value. A coin, even if made of base metal, was exchangeable
in its own right: it did not represent another, superior, form of money. But when banknotes were first invented, they did.
The new invention of promissory notes emerged through the needs of trade in the 16th and 17th centuries. Promissory notes were
used to acknowledge receipt of loans or investments and the obligation to repay them through the fruits of future transactions. A
major task of the emerging profession of banking was to periodically set all these promises against each other and see who owed what
to whom. This process of "clearing" meant that a great amount of paper commitments was reduced to relatively less actual transfer
of money. Final settlement was either by payment with sovereign money (coins) or another promissory note (banknote).
Eventually, the banknotes became so trusted that they were treated as money in their own right. In Britain they became equivalent
to the coinage, particularly when they were united under the banner of the Bank of England. Today, if you took a banknote to the
Bank of England, it would merely exchange your note for one that is exactly the same. Banknotes are no longer promises, they are
the currency. There is no other "real" money behind them.
What promissory notes became. Wara1982/Shutterstock.com
What modern money does retain is its association with debt. Unlike sovereign money, which was created and spent directly into
circulation, modern money is largely borrowed into circulation through the banking system. This process shelters behind another myth,
that banks merely act as a link between savers and borrowers. In fact, banks create money. And it is only in the last decade that
this powerful myth has been finally put to rest by banking and monetary authorities.
It is now
acknowledged
by monetary authorities such as the IMF, the US Federal Reserve and the Bank of England, that banks are creating new money when
they make loans. They don't lend the money of other account holders to those who want to borrow.
Bank loans consist of money conjured out of thin air, whereby new money is credited to the borrowers account with the agreement
that the amount will eventually be repaid with interest.
The policy implications of the public currency being created out of nowhere and lent to borrowers on a purely commercial basis
have still not been taken on board. Nor has basing a public currency on debt as opposed to the sovereign power to create and directly
circulate money free of debt.
The result is that rather than using their own sovereign power over money creation, as Alexander the Great did, states have become
borrowers from the private sector. Where there are public spending deficits or the need for large scale future expenditure, there
is an expectation that the state will borrow the money or increase taxation, rather than create the money itself.
Creators of cash. Creative Lab/Shutterstock.com
Dilemmas of debt
But basing a money supply on debt is ecologically, socially and economically problematic.
Ecologically, there is a problem because the need to pay off debt could drive potentially
damaging
growth : money creation based on repaying debt with interest must imply constant growth in the money supply. If this is achieved
through increasing productive capacity, there will inevitably be pressure on natural resources.
Basing the money supply on debt is also socially discriminatory because not all citizens are in a position to take on debt. The
pattern of the money supply will tend to favour the already rich or the most speculative risk-taker. Recent decades, for example,
have seen a
huge amount of borrowing by the financial sector to enhance their investments.
The economic problem is that the money supply depends on the capacity of the various elements of the economy (public and private)
to take on more debt. And so as countries have become more dependent upon bank-created money, debt bubbles and credit crunches have
become more frequent.
This is because handbag economics creates an impossible task for the private sector. It has to create all new money through bank-issued
debt and repay it all with interest. It has to completely fund the public sector and generate a profit for investors.
But when the privatised bank-led money supply flounders, the money creating powers of the state come back into clear focus. This
was particularly plain in the 2007-8 crisis, when central banks created new money in the process known as quantitative easing. Central
banks used the sovereign power to create money free of debt to spend directly into the economy (by buying up existing government
debt and other financial assets, for example).
The question then becomes: if the state as represented by the central bank can create money out of thin air to save the banks
– why can't it create money to save the people?
It's a mistake to think of the state as a piggybank or handbag. ColorMaker/Shutterstock.com
Money for the people
The myths about money have led us to look at public spending and taxation the wrong way around. Taxation and spending, like bank
lending and repayment, is in a constant flow. Handbag economics assumes that it is taxation (of the private sector) that is raising
the money to fund the public sector. That taxation takes money out of the taxpayer's pocket.
But the long political history of sovereign power over money would indicate that the flow of money can be in the opposite direction.
In the same way that banks can conjure money out of thin air to make loans, states can conjure money out of thin air to fund public
spending. Banks create money by setting up bank accounts, states create money by allocating budgets.
When governments set budgets they do not see how much money they have in a pre-existing taxation piggybank. The budget allocates
spending commitments that may, or may not, match the amount of money coming in through taxation. Through its accounts in the treasury
and the central bank, the state is constantly spending out and taking in money. If it spends more money than it takes in, it leaves
more money in people's pockets. This creates a budget deficit and what is effectively an overdraft at the central bank.
Is this a problem? Yes, if the state is treated as if it was any other bank account holder – the dependent household of handbag
economics. No, if it is seen as an independent source of money. States do not need to wait for handouts from the commercial sector.
States are the authority behind the money system. The power exercised by the banks to create the public currency out of thin air
is a sovereign power.
It is no longer necessary to mint coins like Alexander, money can be created by keystrokes. There is no reason why this should
be monopolised by the banking sector to create new public money as debt. Deeming public spending as being equivalent to bank borrowing
denies the public, the sovereign people in a democracy, the right to access its own money free of debt.
Money should be designed for the many, not the few. Varavin88/Shutterstock.com
Redefining money
This foray into the historical and anthropological stories about money shows that long-held conceptions – that money emerged from
a previous market economy based on barter, and that it was originally made from precious metal – are fairytales. We need to recognise
this. And we need to capitalise on the public ability to create money.
But it is also important to recognise that the sovereign power to create money is not a solution in itself. Both the state and
bank capacity to create money have advantages and disadvantages. Both can be abused. The reckless lending of the banking sector,
for example, led to the near meltdown of the American and European monetary and financial system. On the other hand, where countries
do not have a developed banking sector, the money supply remains in the hands of the state, with massive room for corruption and
mismanagement.
The answer must be to subject both forms of money creation – bank and state – to democratic accountability. Far from being a technical,
commercial instrument, money can be seen as a social and political construct that has immense radical potential. Our ability to harness
this is hampered if we do not understand what money is
and how it works . Money must become our servant, rather than our master.
The Sham
of Shareholder Capitalism
Posted on
June 24, 2019
by
Yves
Smith
Yves here. While Richard Murphy makes some important points in his post, he unwittingly implies that
shareholder capitalism could work as advertised absent the way investors lose ownership rights when they
acquire stock through pooled vehicles.
In fact, the choice that legislators and regulators made to promote
liquidity in stock markets inevitably resulted in weak governance.
From a 2013 post
:
Amar Bhide, now a professor at the Fletcher School and a former McKinsey consultant and later proprietary
trader, questions the policy bias towards more liquidity in financial markets. Officials (and of course
intermediaries) favor it because they lower funding costs. Isn't cheaper money always better? Bhide argues
that it can come with hidden costs, and those costs are sometime substantial.
He first took up the argument in a 1993 Harvard Business Review article, "Efficient Markets, Deficient
Governance." Its assessment was pretty much ignored because it was too far from orthodox thinking. He
started with some straightforward observations:
US rules protecting investors are the most comprehensive and well enforced in the world .Prior to the
1930s, the traditional response to panics had been to let investors bear the consequences The new
legislation was based on a different premise: the acts [the Securities Act of 1933 and the Securities and
Exchange Act of 1934] sought to protect investors before they incurred losses.
He then explained at some length that extensive regulations are needed to trade a promise as ambiguous as
an equity on an arm's length, anonymous basis. Historically, equity investors had had venture-capital-like
relationships with the owner/managers: they knew them personally (and thus could assess their character),
were kept informed of how the businesses was doing. At a minimum, they were privy to its strategy and plans;
they might play a more active role in helping the business succeed.
By contrast, investors in equities that are traded impersonally can't know all that much. A company can't
share competitively sensitive information with transient owners. Stocks are also more liquid if ownership is
diffuse, which makes it harder for any investor or even group of investors to discipline underperforming
managers. It's much easier for them to sell their stock and move on rather than force changes. And an
incompetent leadership group can still ignore the message of a low stock price, not just because they are
rarely replaced, but also because they can rationalize the price as not reflecting the true state of the
company compared to its competitors, which is simply not available to the public.
Bhide's concern is hardly theoretical. The short term orientation of the executives of public companies,
their ability to pay themselves egregious amounts of money, too often independent of actual performance,
their underinvestment in their businesses and relentless emphasis on labor cost reduction and headcount
cutting are the direct result of anonymous, impersonal equity markets. Many small businessmen and serial
entrepreneurs hold the opposite attitude of that favored by the executives of public companies: they do
their best to hang on to workers and will preserve their pay even if it hurts their own pay. Stagnant worker
wages and underemployment are a direct result of companies' refusal to share productiivty gains with
workers, and that dates to trying to improve the governance problems Bhide discussed by linking executive
pay to stock market performance. That did not fix the governance weaknesses and created new problems of its
own.
An issue that we've also discussed regularly is that the idea that companies are to be operated for the
benefit of shareholders is an idea made up by economists with no legal foundation. Equity is a weak and
ambiguous claim: you get a vote on some matters, you get dividends if we make money and even then if we feel
like it, and we can dilute your interest at any time. Equity is a residual claim, the last in line after
everything else is taken care of.
By Richard Murphy, a chartered accountant and a political economist. He has been
described by the Guardian newspaper
as an "anti-poverty campaigner and tax expert". He is Professor of
Practice in International Political Economy at City University, London and Director of Tax Research UK. He is a
non-executive director of
Cambridge
Econometrics
. He is a member of the
Progressive
Economy Forum.
Originally published at
Tax Research UK
The FT
published a report
last week that commented on an important issue. That is the collapse of shareholder
capitalism.
The issue is a simple one to summarise. Apparently about two thirds of all private owners of quoted shares
in the UK now own their shares through nominee pooled funds. As such they are not recorded as the legal owners
of these shares. They have no voting rights. And no right to attend shareholder meetings. They don't even have
the right to accounts. And they have given an institution, who does not own the shares in reality, the right to
exercise their vote in the company.
This matters for a number of reasons.
First, this makes a mockery of shareholder capitalism. The company has no idea who its shareholders are. And
it is wholly unaccountable to them. The idea that somehow shareholders are at the centre of corporate concern
is shown to be a sham, yet again, by this.
Second, this undermines audit. Bizarrely, audit reports are still addressed to shareholders. What is
apparent is that many do not get them. No wonder auditing is becoming so removed from reality.
Third, this breaks down any pretence that there is effective corporate governance. There cannot be when many
company members are disenfranchised.
Fourth, the concentration of power in the hands of passive nominee owners reinforces the control of a small
ruling elite in quoted businesses, who are insulated by this arrangement from any real accountability whilst
being able to pretend that it exists.
Fifth, this means tax fraud can be much more easily disguised.
And lastly, it shows the owners of shares just don't care and so are not the custodians for business that we
need.
In essence, we have a form of capitalism that claims to be for shareholders and yet that is clearly a sham.
No wonder it is not working.
Most shareholders lack the savvy to fuss over board member actions. So, today we have
mutual fund
manager capitalism
. It might work better. If I own 100 shares, who cares? If I own 1,000,000 shares,
board's better listen. Now if we can only get our mutual funds to kick ass about abuses like bonuses for
failure, worker abuse, etc.
Activist fund managers? Nope. Several years ago, and despite pointing out that high executive
compensation injures shareholder value, I was told that there is no interest in voting shares to limit
compensation of executives.
Fourth, the concentration of power in the hands of passive nominee owners reinforces the control of
a small ruling elite in quoted businesses, who are insulated by this arrangement from any real
accountability whilst being able to pretend that it exists.
Those nominee owners don't seem all that passive. Pay no attention to that man behind the curtain.
"Warren Buffett is the largest shareholder in Coke with a 9.1% stake in the business. He had abstained
from voting through the original pay guidelines, saying at the time "I could never vote against
Coca-Cola, but I couldn't vote for the plan either."
So much for investor activism on Buffett's part.
The article is titled "Warren Buffett Wins A Battle Against Coca-Cola's Plan To Pay Its Bosses $13
Billion" even though Buffett could not find his way to actually vote AGAINST the pay package and
abstaining simply means one's vote isn't counted.
If independently wealthy Buffett cannot find the courage to vote against a pay package he finds
egregious, one wonders if other fund managers, of lower independence and wealth will show much activism
in bucking corporate management.
Coase's theorem isn't a theorem -- and it's not even right! Worshipping liquidity so that equilibrium models
fit (which is backwards, right?) is insane. Coase is a religion, not a scientific model (and definitely not a
theorem).
And these kind of things show how bad an equilibrium analysis is of economic systems. Even the tiniest bump
in the manifold, and you get turbulence which can lead to storms. Dumping liquidity into a turbulent system and
you get more turbulence (which eventually becomes self-sustaining structures in the face of the very even flow
you were trying to create )
I mis-read the lead as "The Sham
e
of Shareholder Capitalism". Whatever happened to corporations
that had responsibilities/commitments to anything besides shareholders? Since said shareholders are, in effect,
absentee landlords, executives are running the game for what? Their own benefit? I'm shocked, shocked I tell
you.
The major shareholders, mostly the CEO, CEO et al, are there to feather their own nest. While the right
wingers repeat that the corporation should take care of shareholder interest, they actually mean these majority
shareholders, who loot the corporation for their own benefit.
I've always been struck by one contradiction inherent in the pooled fund model, with its customary emphasis
on performance relative to indices or comparable funds. If an extremely large mutual fund goes underweight a
listed stock (relative to its target benchmark index or the competition) you could easily end up with the
largest holder of that stock having a financial interest in the stock's underperformance.
A theoretical economic justification for almost any aspect of large scale capitalism is prima facie
ridiculous. Like everything else, capitalism is a game of power and although it's pleasant to dream about
countervailing power being held by consumers, investors, competitors and employees, the only enduring form of
resistance to CEO governance is government. Unfortunately, the part of government that has been charged with
controlling the corporation has been AWOL for a long, long time. The Democrats, the supposed champion of
everyone who is not a CEO have long ago crossed the line and serve the other side (hopefully, prayerfully, with
some exceptions).
Just as an exercise that might shed light on the effectiveness of the funds (hedge & mutual)
ability/willingness to constrain the CEOs, it would be interesting to know how frequently these funds put forth
any resistance to debt funded stock buy backs, which, at least temporarily, enhance the funds' holdings.
Liquidity. Without it the system doesn't work and is prone to freezing up. So naturally, shareholders looked
like liquidity incarnate in 1990. Liquidity made more urgent by all the mismanagement of the economy and the
inability to understand and control inflation; Paul Volker's rate hike. And to make those nominee funds look
like honest business Milton Friedman began to tout shareholder rights and values. It makes sense – how it all
happened. I remember thinking, What happened to good old fashioned capitalism? more than once. This went hand
in hand with the new and improved MBA, preferably from Harvard and the valuation of efficiencies that were
short sighted and superficial. How many corporations got rid of their excess baggage, fired all their old
hands, hired new managers, etc? Then off-shoring. It amounted to decimation in order to free up liquidity –
sounds like an oxymoron now. It was based on nothing more than optimism. Which to my thinking runs sorta
parallel to ponzi. It was inevitable that shareholder capitalism was used as an excuse for tax loops and fraud.
Agents, "nominee funds", are happily removed from reality. It became open season for private equity, money
laundering, whatever. Liquidity became synonymous with profit taking. All those equities were "ambiguous
promises " which were nothing more than "residual claims" offered by nominee proxies offering no good corporate
governance. So the question pops up, What happens now that liquidity has blown itself up? Its fitting that all
the central banks are infusing money into the system as fast as they can because they must balance out the
massive inequality that occurred – even though that money isn't getting to the right party. It's so beyond
nuts. How do we make things work again? And so to the point – what does a share really mean – does it carry
both rights and obligations?, what does it mean to be a shareholder and what are the corporate obligations to
shareholders and to society? -to labor (therefore to management and good corporate governance). All those
questions just got left in the dust.
Until 1982 it was illegal for a company to borrow money in order to buy back their own shares. Il-Le-Gal.
Because it was so obviously share price manipulation by insiders.
Just reinstate that, and clean up shareholder options issuance while you're at it.
Result? Share prices would more accurately reflect the company's financial performance. You remember that
stuff: things like earnings per share, market share, new product launches, cost containment. Good governance
would follow.
Instead what we have today is just one big casino, run for the benefit of insiders.
Very grateful for this bit of rare clarity about financial intermediaries and the games they play.
Back in the beginning of joint-stock companies everyone knew they were dodgy investments run by dodgy
people. You put only a small amount of your capital in them and the bulk in government stock.
Now they have bought the protection they need, secured limited liability for their acts and got a corrupt
Treasury to enact that a company is a person. Speaks volumes about our political representatives.
A sensible article from the viewpoint of one outside looking in. But as I see it Murphy is still living in
the 19th Century.
Me? I'm retired and have $100,000 to invest for an income to sustain me. I can invest that $100,000 in one
company, pore over its accounts, watch its director's every move and snap at their heels if I don't think I'm
getting the return I should be. Of course if it's a $1billion company my snapping isn't going to have much
effect. And if the Company goes under I've lost my retirement savings.
Or I could invest $10,000 in ten companies. I'd have to choose the ten, of course, on the basis of public
information and wouldn't be able to scrutinize them all equally, and my stake would make my snapping at the
heels of the directors even less of a consideration. However I have only a 10% chance of a total loss, and a
10% chance of sharing any spectacular success.
Or I could put the $100,000 in a managed – or even a passive – fund. There I'd have less than a 1% loss if
the Company goes under and a return that should pretty much reflect what the general economy was doing. I'd
only get a tiny slice of any spectacular commercial successes, but that's the consequence of not gambling which
is what choosing to invest in one or two companies in fact is.
In short, for someone in retirement, pooled investment makes the best sense. And while I don't know the
actual figures I would be prepared to gamble a small amount that a considerable slice the total amount invested
in the stock market is 'owned' by the retired, or the sooner or later to be retired.
On the surface, it appears the dying empire must finally grab everything, no matter how
historically untouchable, in last ditch claim on total power.
Of course this is bad on every level, it's immoral, unethical, illegal, doomed to fail,
and doomed to hasten failure of the entire enterprise.
I'm dreaming here, but the best plan is to fade slowly into the night and put on the make
up tomorrow.
But anyway, the fully doomed and immoral path has a bright side for the MIC--it's a lock
on anyone who would try to shut it down. We will continue to do stupid things so we must
continue to do stupid things.
Working paper suggests "Late Capitalism" (i.e. neoliberalism + austerity + outsourcing
essential public services) is less efficient than the Soviet centralized system:
Stiglitz does not explain us what forces can bring this so called "progressive capitalism". So far I not see social forces
that can enact it.
Why financial oligarchy that is the ruling class under the neoliberalism relinquish the power voluntarily, without a fight?
After all they control the state and counterattack any changes: look at color revolution (aka Russiagate) launched against Trump,
who represent adherents of a different flavor of neoliberalism.
Neoliberalism entered zombie stage as ideology was discredited in 2008, but there is not still a viable alternative to it. Trump
is promoting "national neoliberalism" -- neoliberalism without globalization and with trade wars between rival economic blocks.
It might be worse then classic neoliberalism for common people.
Notable quotes:
"... By contrast, the third camp advocates what I call progressive capitalism , which prescribes a radically different economic agenda, based on four priorities. The first is to restore the balance between markets, the state and civil society. Slow economic growth, rising inequality, financial instability and environmental degradation are problems born of the market, and thus cannot and will not be overcome by the market on its own. Governments have a duty to limit and shape markets through environmental, health, occupational safety and other types of regulation. It is also the government's job to do what the market cannot or will not do, such as actively investing in basic research, technology, education and the health of its constituents. ..."
"... The rise in corporate market power, combined with the decline in workers' bargaining power, goes a long way toward explaining why inequality is so high and growth so tepid. Unless government takes a more active role than neoliberalism prescribes, these problems will likely become much worse, owing to advances in robotisation and artificial intelligence. ..."
"... There is no magic bullet that can reverse the damage done by decades of neoliberalism. But a comprehensive agenda along the lines sketched above absolutely can. Much will depend on whether reformers are as resolute in combating problems like excessive market power and inequality as the private sector is in creating them. ..."
"... This agenda is eminently affordable; in fact, we cannot afford not to enact it. The alternatives offered by nationalists and neoliberals would guarantee more stagnation, inequality, environmental degradation and political acrimony, potentially leading to outcomes we do not even want to imagine. ..."
"... Progressive capitalism is not an oxymoron. Rather, it is the most viable and vibrant alternative to an ideology that has clearly failed. As such, it represents the best chance we have of escaping our current economic and political malaise. ..."
Bill Clinton and Tony Blair represented neoliberalism with a human face but remained beholden to an expired ideology. Photograph:
Mark Lennihan/AP W hat kind of economic system is most conducive to human wellbeing? That question has come to define the current
era, because, after 40 years of neoliberalism in the United States and other advanced economies, we know what doesn't work.
The neoliberal experiment – lower taxes on the rich, deregulation of labour and product markets, financialisation, and globalisation
– has been a spectacular failure. Growth is lower than it was in the quarter-century after the second world war, and most of it has
accrued to the very top of the income scale. After decades of
stagnant or even falling incomes for those below them, neoliberalism must be pronounced dead and buried.
Vying to succeed it are at least three major political alternatives: far-right nationalism, centre-left reformism and the progressive
left (with the centre-right representing the neoliberal failure). And yet, with the exception of the progressive left, these alternatives
remain beholden to some form of the ideology that has (or should have) expired.
The centre-left, for example, represents neoliberalism with a human face. Its goal is to bring the policies of former US president
Bill Clinton and former British prime minister Tony
Blair into the 21st century, making only slight revisions to the prevailing modes of financialisation and globalisation.
Meanwhile, the nationalist right disowns globalisation, blaming migrants and foreigners for all of today's problems. Yet as Donald
Trump's presidency has shown, it is no less committed – at least in its American variant – to tax cuts for the rich, deregulation
and shrinking or eliminating social programmes.
By contrast, the third camp advocates what I call
progressive
capitalism , which prescribes a radically different economic agenda, based on four priorities. The first is to restore the balance
between markets, the state and civil society. Slow economic growth, rising inequality, financial instability and environmental degradation
are problems born of the market, and thus cannot and will not be overcome by the market on its own. Governments have a duty to limit
and shape markets through environmental, health, occupational safety and other types of regulation. It is also the government's job
to do what the market cannot or will not do, such as actively investing in basic research, technology, education and the health of
its constituents.
The second priority is to recognise that the "wealth of nations" is the result of
scientific inquiry – learning about the world around us – and social organisation that allows large groups of people to work
together for the common good. Markets still have a crucial role to play in facilitating social cooperation, but they serve this purpose
only if they are governed by the rule of law and subject to democratic checks. Otherwise, individuals can get rich by exploiting
others, extracting wealth through rent-seeking rather than creating wealth through genuine ingenuity. Many of today's wealthy took
the exploitation route to get where they are. They have been well served by Trump's policies, which have encouraged rent-seeking
while destroying the underlying sources of wealth creation. Progressive capitalism seeks to do precisely the opposite.
There is no magic bullet that can reverse the damage done by decades of neoliberalism
This brings us to the third priority: addressing the growing problem of concentrated
market power . By exploiting information advantages, buying up potential competitors and creating entry barriers, dominant firms
are able to engage in large-scale rent-seeking to the detriment of everyone else. The rise in corporate market power, combined with
the decline in workers' bargaining power, goes a long way toward explaining why inequality is so high and growth so tepid. Unless
government takes a more active role than neoliberalism prescribes, these problems will likely become much worse, owing to advances
in robotisation and artificial intelligence.
The fourth key item on the progressive agenda is to sever the link between economic power and political influence. Economic power
and political influence are mutually reinforcing and self-perpetuating, especially where, as in the US, wealthy individuals and corporations
may spend without limit in elections. As the US moves ever closer to a fundamentally undemocratic system of "one dollar, one vote",
the system of checks and balances so necessary for democracy likely cannot hold: nothing will be able to constrain the power of the
wealthy. This is not just a moral and political problem: economies with less inequality actually
perform better .
Progressive-capitalist reforms thus have to begin by curtailing the influence of money in politics and reducing wealth inequality.
There is no magic bullet that can reverse the damage done by decades of neoliberalism. But a comprehensive agenda along the
lines sketched above absolutely can. Much will depend on whether reformers are as resolute in combating problems like excessive market
power and inequality as the private sector is in creating them.
A comprehensive agenda must focus on education, research and the other true sources of wealth. It must protect the environment
and fight climate change with the same vigilance as the Green New Dealers in the US and Extinction Rebellion in the United Kingdom.
And it must provide public programmes to ensure that no citizen is denied the basic requisites of a decent life. These include economic
security, access to work and a living wage, health care and adequate housing, a secure retirement, and a quality education for one's
children.
This agenda is eminently affordable; in fact, we cannot afford not to enact it. The alternatives offered by nationalists and neoliberals
would guarantee more stagnation, inequality, environmental degradation and political acrimony, potentially leading to outcomes we
do not even want to imagine.
Progressive capitalism is not an oxymoron. Rather, it is the most viable and vibrant alternative to an ideology that has clearly
failed. As such, it represents the best chance we have of escaping our current economic and political malaise.
Joseph E Stiglitz is a Nobel
laureate in economics, university professor at Columbia University and chief economist at the Roosevelt Institute.
Project Syndicate
"... Friedrich von Hayek, one of the creed's most revered economic gurus, spent his productive years railing against government old age pension and medical insurance schemes. When he became old and infirm, he signed on for both social security and medicare. ..."
Friedrich von Hayek, one of the creed's most revered economic gurus, spent his productive
years railing against government old age pension and medical insurance schemes. When he
became old and infirm, he signed on for both social security and medicare.
Love it. When push comes to shove all those ideologies and beliefs crumble into the dust of
practical needs. Another individual who cloaked the self-interest of the rich and
powerful into some kind of spurious ideology.
George wrote a rather good article about Von
Hayek a few years ago I seem to remember.
"... Republicanism and true Christianity are mutually exclusive. There is nothing for them to quote. Sharing your wealth? Giving to the poor? Egalitarianism? Loving your neighbour? The Good Samaritan? ..."
"... Best to pretend that Christianity is about extreme right wing economic policy (and fascist social mores), even though it is the opposite. ..."
"... And Tea Partiers like Ayn Rand? The most anti-Christian and anti-American lunatic you can find? The corporate agenda and Wall Street interests trump everything else. No news there. ..."
"... A lot of these people describe themselves as Christian, makes you wonder which part of Jesus' message they loved more, the part that said the poor should rot without help, or the part where he said violence was justified and the chasing of wealth is to be lauded. ..."
It never stops to amaze me how the American Republican Right claims to be Christian. Have you
noticed that they NEVER quote the words of Jesus Christ? I don't blame them,
Republicanism and true Christianity are mutually exclusive. There is nothing for them to
quote. Sharing your wealth? Giving to the poor? Egalitarianism? Loving your neighbour? The
Good Samaritan?
Dirty words all. Best to pretend that Christianity is about extreme right wing
economic policy (and fascist social mores), even though it is the opposite.
If Jesus came to the US today, he would not like Republicans and they would not like him.
Santorum, Palin, Limbaugh etc. would strap him to the electric chair and pull the lever if
they could, no doubt.
And Tea Partiers like Ayn Rand? The most anti-Christian and anti-American lunatic you
can find? The corporate agenda and Wall Street interests trump everything else. No news
there.
The most bizarre aspect of the rights infatuation with Ayn Rand is that she was an
ardent Atheist who's beliefs are diametrically opposite to those of Jesus & the
Bible.
A lot of these people describe themselves as Christian, makes you wonder which part of
Jesus' message they loved more, the part that said the poor should rot without help, or the
part where he said violence was justified and the chasing of wealth is to be lauded.
"the only way you're gonna be able to sleep at night (and go to heaven in the afterlife) is
to believe that the system has some moral justification based on the laws of nature"
I think this is one of the drivers in the shift from Catholicism to Protestanism,
especially in Northern Europe.
For Medieval Catholics everyone was where God had put them, so the rich were rich and the
poor poor as part of Gods plan, and anyone trying to change it was going against God.
Which is handy if you are a Baron or Bishop living the high life surrounded my thousands of
starving peasants (having armed retainers also helped).
Come the industrial revolution and the rise of the business and trade classes that's not so
appealing, so now God rewards the virtuous and hard working, who naturally rise to the
top.
"... Mr. Macri has slashed subsidies for electricity, fuel and transportation, causing prices to skyrocket, and recently prompting Ms. Genovesi, 48, to cut off her gas service, rendering her stove lifeless. Like most of her neighbors, she illegally taps into the power lines that run along the rutted dirt streets. ..."
"... "It's a neoliberal government," she says. "It's a government that does not favor the people." ..."
"... The tribulations playing out under the disintegrating roofs of the poor are a predictable dimension of Mr. Macri's turn away from left-wing populism. He vowed to shrink Argentina's monumental deficits by diminishing the largess of the state. The trouble is that Argentines have yet to collect on the other element the president promised: the economic revival that was supposed to follow the pain. ..."
"... But as Mr. Macri seeks re-election this year, Argentines increasingly lament that they are absorbing all strife and no progress. Even businesses that have benefited from his reforms complain that he has botched the execution, leaving the nation to confront the same concoction of misery that has plagued it for decades. The economy is contracting. Inflation is running above 50 percent, and joblessness is stuck above 9 percent ..."
"... Poverty afflicts a third of the population, and the figure is climbing. ..."
"... Mr. Macri sold his administration as an evolved form of governance for these times, a crucial dose of market forces tempered by social programs. ..."
"... In the most generous reading, the medicine has yet to take effect. But in the view of beleaguered Argentines, the country has merely slipped back into the rut that has framed national life for as long as most people can remember. ..."
"... "We live patching things up," said Roberto Nicoli, 62, who runs a silverware company outside the capital, Buenos Aires. "We never fix things. I always say, 'Whenever we start doing better, I will start getting ready for the next crisis.'" ..."
"... "When our president Cristina was here, they sent people to help us," she says. "Now, if there's problems, nobody helps us. Poor people feel abandoned." ..."
On the ragged streets of the shantytown across the road, where stinking outhouses sit alongside shacks fashioned from rusted sheets
of tin, families have surrendered hopes that sewage lines will ever reach them.
They do not struggle to fashion an explanation for their declining fortunes: Since taking office more than three years ago, President
Mauricio Macri has broken with the budget-busting populism that has dominated Argentina for much of the past century, embracing the
grim arithmetic of economic orthodoxy.
Mr. Macri has slashed subsidies for electricity, fuel and transportation, causing prices to skyrocket, and recently prompting
Ms. Genovesi, 48, to cut off her gas service, rendering her stove lifeless. Like most of her neighbors, she illegally taps into the
power lines that run along the rutted dirt streets.
"It's a neoliberal government," she says. "It's a government that does not favor the people."
The tribulations playing out under the disintegrating roofs of the poor are a predictable dimension of Mr. Macri's turn away
from left-wing populism. He vowed to shrink Argentina's monumental deficits by diminishing the largess of the state. The trouble
is that Argentines have yet to collect on the other element the president promised: the economic revival that was supposed to follow
the pain.
Mr. Macri's supporters heralded his 2015 election as a miraculous outbreak of normalcy in a country with a well-earned reputation
for histrionics. He would cease the reckless spending that had brought Argentina infamy for defaulting on its debts eight times.
Sober-minded austerity would win the trust of international financiers, bringing investment that would yield jobs and fresh opportunities.
But as Mr. Macri seeks re-election this year, Argentines increasingly lament that they are absorbing all strife and no progress.
Even businesses that have benefited from his reforms complain that he has botched the execution, leaving the nation to confront the
same concoction of misery that has plagued it for decades. The economy is contracting. Inflation is running above 50 percent, and
joblessness is stuck above 9 percent.
Poverty afflicts a third of the population, and the figure is climbing.
Far beyond this country of 44 million people, Mr. Macri's tenure is testing ideas that will shape economic policy in an age of
recrimination over widening inequality. His presidency was supposed to offer an escape from the wreckage of profligate spending while
laying down an alternative path for countries grappling with the worldwide rise of populism. Now, his presidency threatens to become
a gateway back to populism. The Argentine economy is contracting. Inflation is running above 50 percent, and joblessness is stuck
above 9 percent. Poverty afflicts a third of the population. Credit Sarah Pabst for The New York Times
Image
The Argentine economy is contracting. Inflation is running above 50 percent, and joblessness is stuck above 9 percent. Poverty afflicts
a third of the population. Credit Sarah Pabst for The New York Times
As the October election approaches, Mr. Macri is contending with the growing prospect of a challenge from the president he succeeded,
Cristina Fernández de Kirchner, who faces a
series of criminal indictments for corruption . Her unbridled spending helped deliver the crisis that Mr. Macri inherited. Her
return would resonate as a rebuke of his market-oriented reforms while potentially yanking Argentina back to its accustomed preserve:
left-wing populism, in uncomfortable proximity to insolvency.
The Argentine peso lost half of its value against the dollar last year, prompting the central bank to lift interest rates to a
commerce-suffocating level above 60 percent. Argentina was forced to secure a $57 billion
rescue from the International
Monetary Fund , a profound indignity given that the fund is widely despised here for the austerity it imposed in the late 1990s,
turning an economic downturn into a depression.
For Mr. Macri, time does not appear to be in abundant supply. The spending cuts he delivered hit the populace immediately. The
promised benefits of his reforms -- a stable currency, tamer inflation, fresh investment and jobs -- could take years to materialize,
leaving Argentines angry and yearning for the past.
In much of South America, left-wing governments have taken power in recent decades as an angry corrective to dogmatic prescriptions
from Washington, where the Treasury and the I.M.F. have focused on the confidence of global investors as the key to development.
Left-wing populism has aimed to redistribute the gains from the wealthy to everyone else. It has aided the poor, while generating
its own woes --
corruption and depression in
Brazil , runaway inflation and financial ruin in Argentina. In Venezuela, uninhibited spending has turned the country with the
world's largest proven oil reserves into a land where
children starve .
Mr. Macri sold his administration as an evolved form of governance for these times, a crucial dose of market forces tempered
by social programs.
In the most generous reading, the medicine has yet to take effect. But in the view of beleaguered Argentines, the country
has merely slipped back into the rut that has framed national life for as long as most people can remember.
"We live patching things up," said Roberto Nicoli, 62, who runs a silverware company outside the capital, Buenos Aires. "We
never fix things. I always say, 'Whenever we start doing better, I will start getting ready for the next crisis.'"
Cultivating wealth
... ... ...
In the beginning, there was Juan Domingo Perón, the charismatic Army general who was president from 1946 to 1955, and then again
from 1973 to 1974. He employed an authoritarian hand and muscular state power to champion the poor. He and his wife, Eva Duarte --
widely known by her nickname, Evita -- would dominate political life long after they died, inspiring politicians across the ideological
spectrum to claim their mantle.
Among the most ardent Peronists were Néstor Kirchner, the president from 2003 to 2007, and his wife, Cristina Fernández de Kirchner,
who took office in 2007, remaining until Mr. Macri was elected in 2015.
Their version of Peronism -- what became known as Kirchnerism -- was decidedly left-wing, disdaining global trade as a malevolent
force. They expanded cash grants to the poor and imposed taxes on farm exports in a bid to keep Argentine food prices low.
As the country's farmers tell it, Kirchnerism is just a fancy term for the confiscation of their wealth and the scattering of
the spoils to the unproductive masses. They point to Ms. Kirchner's 35 percent tax on soybean exports.
"We had a saying," Mr. Tropini says. "'For every three trucks that went to the port, one was for Cristina Kirchner.'"
reduction in export taxes.
"You could breathe finally," Mr. Tropini, the farmer, says.
He was free of the Kirchners, yet stuck with nature. Floods in 2016 wiped out more than half of his crops. A drought last year
wreaked even more havoc.
"This harvest, this year," he says, "is a gift from God."
But if the heavens are now cooperating, and if the people running Buenos Aires represent change, Mr. Tropini is critical of Mr.
Macri's failure to overcome the economic crisis.
A weaker currency makes Argentine soybeans more competitive, but it also increases the cost of the diesel fuel Mr. Tropini needs
to run his machinery. High interest rates make it impossible for him to buy another combine, which would allow him to expand his
farm.
In the first years of Mr. Macri's administration, the government lifted controls on the value of the peso while relaxing export
taxes. The masters of international finance delivered a surge of investment. The economy expanded by nearly 3 percent in 2017, and
then accelerated in the first months of last year.
But as investors grew wary of Argentina's deficits, they fled, sending the peso plunging and inflation soaring. As the rout continued
last year, the central bank mounted a futile effort to support the currency, selling its stash of dollars to try to halt the peso's
descent. As the reserves dwindled, investors absorbed the spectacle of a government failing to restore order. The exodus of money
intensified, and another potential default loomed, leading a chastened Mr. Macri to accept a rescue from the dreaded IMF.
Administration officials described the unraveling as akin to a natural disaster: unforeseeable and unavoidable. The drought hurt
agriculture.
Money was flowing out of developing countries as the Federal Reserve continued to lift interest rates in the United States, making
the American dollar a more attractive investment.
But the impact of the Fed's tightening had been widely anticipated. Economists fault the government for mishaps and complacency
that left the country especially vulnerable.
.... ... ...
Among the most consequential errors was the government's decision to include Argentina's central bank in a December 2017 announcement
that it was raising its inflation target. The markets took that as a signal that the government was surrendering its war on inflation
while opting for a traditional gambit: printing money rather than cutting spending.
... ... ...
The government insists that better days are ahead. The spending cuts have dropped the budget deficit to a manageable 3 percent
of annual economic output. Argentina is again integrated into the global economy.
"We haven't improved, but the foundations of the economy and society are much healthier," said Miguel Braun, secretary of economic
policy at the Treasury Ministry. "Argentina is in a better place to generate a couple of decades of growth."
... ... ...
Their television flashes dire warnings, like "Danger of Hyper Inflation." Throughout the neighborhood, people decry the sense
that they have been forsaken by the government.
Trucks used to come to castrate male dogs to control the packs of feral animals running loose. Not anymore. Health programs for
children are less accessible than they were before, they said.
Daisy Quiroz, 71, a retired maid, lives in a house that regularly floods in the rainy season.
"When our president Cristina was here, they sent people to help us," she says. "Now, if there's problems, nobody helps us.
Poor people feel abandoned."
... ... ...
Daniel Politi contributed reporting from Buenos Aires. Peter S. Goodman is a London-based European economics correspondent.
He was previously a national economic correspondent in New York. He has also worked at The Washington Post as a China correspondent,
and was global editor in chief of the International Business Times. @
petersgoodman
Another very informative article from one of the few writers with any sense of having a
'finger on the pulse.'
It's sad that it's taken over 30 years for the real shaping influences behind the current
system to be identified and discussed outside the boundaries of a few university
conferences.
The Right have been absolutely brilliant at media control and obfuscation. Their gurus
have been camouflaged and the whole process of influencing Reagan and Thatcher's governments
from the late 1970's has escaped exactly the kind of scrutiny that George gives Rand.
We might also investigate the influence of John Nash's (A Beautiful Mind) 'Gameplay'
experiments in a similar fashion along with the economic gurus who followed Hayek so
slavishly.
It has been known for years that the neo liberal project was designed not just to under
mine democracy and convert people into passive cloned market junkies, but to put an end to
the whole of the Enlightenment Project, which perhaps naively saw human development,. growth
and other human qualities totally savaged and defeated by this poisonous evil, which emulates
all the worst aspects of Fascism without the flags and theatre.
Sadly, this is not a 'this is happening' phenomenon; it's a 'this has happened
phenomenon.' The taint and viral effect of its impact on uk and usa political structures has
already caused major damage. All three major political parties in the uk have for 30 years
subscribed to its tenets though they were no doubt not presented in such a flagrant form as
Rand's writing.
How problematic is it to now look at the polity and rescue it from such a major
ideological shift? Certainly, the major parties cannot shuck off the cape of their key
beliefs after promoting Right wing ideologies for so long, and the traditional Left is no
more.
However, it is good to see some pithy journalism that goes to the heart of the matter -
those of us who have been pleading for less x factor celebrity worshipping of politicians can
at least feel as though this shifts the spectrum to real and significant issues that have
affected the lives of everyone for so long.
I wonder how many would continue to worship at the shrine of Ayn Rand if they knew that
towards the end of her life she signed on for both Medicare and social security.
In case nobody mentioned this book before, which is relevant to the theme:
These submerged policies, Mettler shows, obscure the role of government and
exaggerate that of the market. As a result, citizens are unaware not only of the benefits
they receive, but of the massive advantages given to powerful interests, such as insurance
companies and the financial industry. Neither do they realize that the policies of the
submerged state shower their largest benefits on the most affluent Americans, exacerbating
inequality.
What has been very noticeable about the development of bureaucracy in the public and private
spheres over the last 40 years (since Thatcher govt of 79) has been the way systems are
designed now to place responsibility and culpability on the workers delivering the services -
Teachers, Nurses, social workers, etc. While those making the policies, passing the laws,
overseeing the regulations- viz. the people 'at the top', now no longer take the rap when
something goes wrong- they may be the Captain of their particular ship, but the
responsibility now rests with the man sweeping the decks. Instead they are covered by tying
up in knots those teachers etc. having to fill in endless check lists and reports, which have
as much use as clicking 'yes' one has understood those long legal terms provided by software
companies.... yet are legally binding. So how the hell do we get out of this mess? By us as
individuals uniting through unions or whatever and saying NO. No to your dumb educational
directives, No to your cruel welfare policies, No to your stupid NHS mismanagement.... there
would be a lot of No's but eventually we could say collectively 'Yes I did the right thing'.
Staff distress? Cleaning ( in another county) was privatised to make profit in Thatcher
times.The work of two cleaners became the task of one person. Extra duties were loaded on
-serving meals and drinks, fetching blankets and equipment. Wages dropped by a small degree
-but important when we ere earning, say, £65 a week. Indemnity/insurance against
catching infections was withdrawn. Firstly owned by Jeyes and then sold on to Rentokill
,obviously good for shareholders. A new 'manager' appeared with their own office.
'The left wing dialogue about neoliberalism used to be that it was the Wild West and that
anything goes. Now apparently it's a machine of mass control.'
It is the Wild West and anything goes for the corporate entities, and a machine of control
of the masses. Hence the wish of neoliberals to remove legislation that protects workers and
consumers.
As someone who thinks von Mises and Hayek made invaluable contributions to economics I was
surprised to see such a ringing endorsement for Mises's ideas in the Guardian:
"Public-service workers are now subjected to a panoptical regime of monitoring and
assessment, using the benchmarks von Mises rightly warned were inapplicable and absurd."
That is spot on. Yes, Mises thought that workers should no more be allowed to corner a
market in labour than companies should be allowed to create monopolies in products, and this
is certainly a point where he can be criticized. Using the name "neoliberal" to cover
such very different ideas as Milton's and Hayek's though is absurd - they had completely
opposite ideas about vast government spending to recover from recession. Try looking up John
James Cowperthwaite, who oversaw post-war development in Hong Kong by getting government out
of the way.
He forbade the use of any performance targets of the type Blair brought in, and refused to
compile GDP statistics, thinking the government would game them.
Both von Mises and Hayek would be horrified at the money printing of modern central banks,
especially since 2008. To ascribe modern policy to their ideas is simply nonsense - they did
not (as far as I know) ever suggest central control of interest rates , stock buying by
central banks or saving a bank that has failed through fraud and greed.
If "neoliberalism" is our present dominant ideology, then please do not use the word to
describe their work.
As a matter of semantics, neo-liberalism delivered on the promise of freedom...for
capitalists to be free of ethical accountability, social responsibility, and government
regulation and taxes...
Finally. A writer who can talk about neoliberalism as NOT being a retro version of classical
laissez faire liberalism. It is about imposing "The Market" as the sole arbiter of Truth on
us all.
Only the 'Market' knows what is true in life - no need for 'democracy' or 'education'.
Neoliberals believe - unlike classical liberals with their view of people as rational
individuals acting in their own self-interest - people are inherently 'unreliable',
stupid.
Only entrepreneurs - those close to the market - can know 'the truth' about anything.
To succeed we all need to take our cues in life from what the market tells us.
Neoliberalism is not about a 'small state'. The state is repurposed to impose the 'all
knowing' market on everyone and everything. That is neoliberalism's political project. It is
ultimately not about 'economics'.
But the world didn't work like that, and the people who didn't fit had to be shoved
under the wheel of history.
This is a remarkably similar summation of Rand's worldview of entire classes of people: if
you are poor, you deserve it. Expect nothing from the State to raise you from the cycle of
poverty. The State is evil and should be eliminated. No evil can come from the Business
Culture (or more accurately the Business Cult). The U.S. Republican worldview summed up right
there.
The only sane response to Ayn Rand is the creation of the Human Values Project ,
where creating a better world for all is its manifesto and mandate.
Many thanks for the article. The Right keep erecting her on a pedestal and saying her
ideas are infallible like the Pope. She can't be pulled down off that pedestal enough
times.
"... Your claim is not that people decide rights via participation in political process (social contract), it is that there are universal natural individual rights that cannot be violated based in... something; there is no negotiability like there is with the social contract. Your apparantly foundationless rights cannot be changed by political process - so where do they come from? ..."
"... Your claim is that some quality of people grants immutable rights, not that rights are decided by people. Are you of the strain that thinks we should be allowed to starve our kids (Rothbard)? Or that non-capitalist societies are fair game to be killed and enslaved, to have thier land put to 'better' use (Locke)? Perhaps that latter one underlies the feeling that it would be easy to up sticks and move to some undefined piece of land. ..."
"... You have changed the nice things you listed now, you said maternity leave/pay, weekends, etc. Those were granted by collective potitical action, not the generosity of the capitalists. If Jeff Bezos could hire 1st graders he obviously would. ..."
"... The State is the gun. Always has been, always will be. And yes, there is a place for the gun in society - defence - but not in extorting money from peaceful people. ..."
Your claim is not that people decide rights via participation in political process (social
contract), it is that there are universal natural individual rights that cannot be violated
based in... something; there is no negotiability like there is with the social contract. Your
apparantly foundationless rights cannot be changed by political process - so where do they
come from?
Your claim is that some quality of people grants immutable rights, not that rights are
decided by people. Are you of the strain that thinks we should be allowed to starve our kids
(Rothbard)? Or that non-capitalist societies are fair game to be killed and enslaved, to have
thier land put to 'better' use (Locke)? Perhaps that latter one underlies the feeling that it
would be easy to up sticks and move to some undefined piece of land.
You have changed the nice things you listed now, you said maternity leave/pay, weekends,
etc. Those were granted by collective potitical action, not the generosity of the
capitalists. If Jeff Bezos could hire 1st graders he obviously would.
So you having to leave because you don't wamt to participate in tax paying is coercion,
but people having to leave because they don't want to live under Libertarianism isn't?
Incidentally, which countries at the top of the PISA or OECD rankings do not have massive
state education?
As for Hong Kong, its entire existence is predicated on extreme acts of aggression by the
British. The opium trade and its profits started the ball rolling after an aggressive war.
The Hong Kong authority also owns most of the land, leasing it; they therefore have massive
influence on who gets what and what they do with it - more so than most other nations.
"As you are free to leave, no individual state institution is is forcing you to
participate under pain of violence. If the fact you have no place to go that does not take
tax means that you are coerced, then someone who cannot live but by participation in
free-market capitalism would also be coerced into participation"
I think we won't agree on this because we have a fundamentally different understanding of
coercion. The way I see it, I should not have a leave the place I live in to not have
coercive action taking away my money. I should be able to say, no thanks. It is the
difference between my willingly purchasing something and a mugger taking my money at
gunpoint. The State is the gun. Always has been, always will be. And yes, there is a place
for the gun in society - defence - but not in extorting money from peaceful people.
And people can and do live without being part of the capitalist system. They can live off
the land. They can set up communes. They can use a barter system if they want. Capitalism
just gives people more opportunities, but they can opt out if they want. Or move to a place
that doesn't have capitalism, like many places in Africa or South America or Cuba. Funny who
must people try to leave those places though. Millions do not flock there. They do the other
way round.
"In your opinion."
Yes, true. In my opinion. But I have backed that opinion up with a well reasoned argument
for my position. It didn't just come out of thin air. It comes from recognising the nature of
government is force, violence and coercion. Again, it is the gun in society. And in my
opinion, I think it is wrong, immoral and will always lead to bad outcomes to use the gun to
solve societies more tricky problems. And we can clearly see the bad results of public /
State education, socialised healthcare, welfare, government involvement in the economy, etc,
etc, etc. All do badly.
"Did I? I didn't sign up before birth to participate, and I have no other options but to
participate or die."
You have other options, as previously mentioned. Live off the land, move to a
non-capitalist country, set up a commune, etc.
"Still unsure upon what these rights are based. The mere fact that people can reason
does not necessarily instill or ground right."
Where else can they come from? If you say "government". Well when does government get its
power and decide on your rights? From the people that make up government. So we are back to
people again.
"You tell us elsewhere that we don't really have capitalism, the state and other actors
dominate and fiddle etc. Now you clam capitalism has provided all these nice things* - pick
one."
No. It is not a case of picking one. It is not an "either / or" situation. Economic
freedom and economic oppression exist on a sliding scale. You have more free economies, like
the US (especially prior to 1913) and you have less free economies, like the USSR or Cuba.
The parts of freedom we have, give us the good stuff, gives us innovation and allows society
to grow richer and lift more people out of poverty. The more bad stuff that gets involved,
the less we have, the more society stagnates. The USSR was a lot poorer and dirtier
(environmentally) and had a lot more famine and waste because it was highly centrally
controlled.
"So it had nothing to do with quasi-British authorities selling narcotics to mainland
China then?"
Not much. There may have been some of that but nowhere near enough to explain the
explosion of wealth in HK.
We ARE social animals. Which is why I laugh when I hear right-wing opinions compared to
the laws of the jungle. As far as I can gather, in the jungle, there are no such things as
property laws, inheritance, land enclosure, or indeed money! Humanity's development is as
socialised societies, with surpluses, consent, and so on.
And there has never been free-market capitalism. A misnomer if ever there was one.
"... If 'free markets' of enterprising individuals have been tested to destruction, then capitalism is unable to articulate an ideology with which to legitimise itself. ..."
"... Therefore, neoliberal hegemony can only be perpetuated with authoritarian, nationalist ideologies and an order of market feudalism. ..."
"... The market is no longer an enabler of private enterprise, but something more like a medieval religion, conferring ultimate authority on a demagogue. ..."
"... Only in theory is neoliberalism a form of laissez-faire. Neoliberalism is not a case of the state saying, as it were: 'OK everyone, we'll impose some very broad legal parameters, so we'll make sure the police will turn up if someone breaks into your house; but otherwise we'll hang back and let you do what you want'. ..."
"... Hayek is perfectly clear that a strong state is required to force people to act according to market logic. If left to their own devices, they might collectivise, think up dangerous utopian ideologies, and the next thing you know there would be socialism. ..."
"... This the paradox of neoliberalism as an intellectual critique of government: a socialist state can only be prohibited with an equally strong state. That is, neoliberals are not opposed to a state as such, but to a specifically centrally-planned state based on principles of social justice - a state which, to Hayek's mind, could only end in t totalitarianism. ..."
"... It should be understood (and I speak above all as a critic of neoliberalism) that neoliberal ideology is not merely a system of class power, but an entire metaphysic, a way of understanding the world that has an emotional hold over people. For any ideology to universalize itself, it must be based on some very powerful ideas. Hayek and Von Mises were Jewish fugitives of Nazism, living through the worst horrors of twentieth-century totalitarianism. There are passages of Hayek's that describe a world operating according to the rules of a benign abstract system that make it sound rather lovely. To understand neoliberalism, we must see that it has an appeal. ..."
"... However, there is no perfect order of price signals. People do not simply act according to economic self-interest. Therefore, neoliberalism is a utopian political project like any other, requiring the brute power of the state to enforce ideological tenets. With tragic irony, the neoliberal order eventually becomes not dissimilar to the totalitarian regimes that Hayek railed against. ..."
The other point to be made is that the return of fundamentalist nationalism is arguably a
radicalized form of neoliberalism. If 'free markets' of enterprising individuals have
been tested to destruction, then capitalism is unable to articulate an ideology with which to
legitimise itself.
Therefore, neoliberal hegemony can only be perpetuated with authoritarian, nationalist
ideologies and an order of market feudalism.
In other words, neoliberalism's authoritarian orientations, previously effaced beneath
discourses of egalitarian free-enterprise, become overt.
The market is no longer an enabler of private enterprise, but something more like a
medieval religion, conferring ultimate authority on a demagogue.
Individual entrepreneurs collectivise into a 'people' serving a market which has become
synonymous with nationhood. A corporate state emerges, free of the regulatory fetters of
democracy.
The final restriction on the market - democracy itself - is removed. There then is no
separate market and state, just a totalitarian market state.
Yes, the EU is an ordoliberal institution - the state imposing rules on the market from
without. Thus, it is not the chief danger. The takeover of 5G, and therefore our entire
economy and industry, by Huawei - now that would be a loss of state sovereignty. But because
Huawei is nominally a corporation, people do not think about is a form of governmental
bureaucracy, but if powerful enough that is exactly what it is.
Pinkie123: So good to read your understandings of neoliberalism. The political project is the
imposition of the all seeing all knowing 'market' on all aspects of human life. This version
of the market is an 'information processor'. Speaking of the different idea of the
laissez-faire version of market/non market areas and the function of the night watchman state
are you aware there are different neoliberalisms? The EU for example runs on the version
called 'ordoliberalism'. I understand that this still sees some areas of society as separate
from 'the market'?
ADamnSmith: Philip Mirowski has discussed this 'under the radar' aspect of neoliberalism. How
to impose 'the market' on human affairs - best not to be to explicit about what you are
doing. Only recently has some knowledge about the actual neoliberal project been appearing.
Most people think of neoliberalism as 'making the rich richer' - just a ramped up version of
capitalism. That's how the left has thought of it and they have been ineffective in stopping
its implementation.
Neoliberalism allows with impunity pesticide businesses to apply high risk toxic pesticides
everywhere seriously affecting the health of children, everyone as well as poisoning the
biosphere and all its biodiversity. This freedom has gone far too far and is totally
unacceptable and these chemicals should be banished immediately.
The left have been entirely wrong to believe that neoliberalism is a mobilisation of
anarchic, 'free' markets. It never was so. Only a few more acute thinkers on the left
(Jacques Ranciere, Foucault, Deleuze and, more recently, Mark Fisher, Wendy Brown, Will
Davies and David Graeber) have understood neoliberalism to be a techno-economic order of
control, requiring a state apparatus to enforce wholly artificial directives.
Also, the work
of recent critics of data markets such as Shoshana Zuboff has shown capitalism to be evolving
into a totalitarian system of control through cybernetic data aggregation.
Only in theory is neoliberalism a form of laissez-faire. Neoliberalism is not a case of the
state saying, as it were: 'OK everyone, we'll impose some very broad legal parameters, so
we'll make sure the police will turn up if someone breaks into your house; but otherwise
we'll hang back and let you do what you want'.
Hayek is perfectly clear that a strong state
is required to force people to act according to market logic. If left to their own devices,
they might collectivise, think up dangerous utopian ideologies, and the next thing you know
there would be socialism.
This the paradox of neoliberalism as an intellectual critique of
government: a socialist state can only be prohibited with an equally strong state. That is,
neoliberals are not opposed to a state as such, but to a specifically centrally-planned state
based on principles of social justice - a state which, to Hayek's mind, could only end in t
totalitarianism.
Because concepts of social justice are expressed in language, neoliberals
are suspicious of linguistic concepts, regarding them as politically dangerous. Their
preference has always been for numbers. Hence, market bureaucracy aims for the quantification
of all values - translating the entirety of social reality into metrics, data, objectively
measurable price signals. Numbers are safe. The laws of numbers never change. Numbers do not
lead to revolutions. Hence, all the audit, performance review and tick-boxing that has been
enforced into public institutions serves to render them forever subservient to numerical
(market) logic. However, because social institutions are not measurable, attempts to make
them so become increasingly mystical and absurd. Administrators manage data that has no
relation to reality. Quantitatively unmeasurable things - like happiness or success - are
measured, with absurd results.
It should be understood (and I speak above all as a critic of neoliberalism) that
neoliberal ideology is not merely a system of class power, but an entire metaphysic, a way of
understanding the world that has an emotional hold over people. For any ideology to
universalize itself, it must be based on some very powerful ideas. Hayek and Von Mises were
Jewish fugitives of Nazism, living through the worst horrors of twentieth-century
totalitarianism. There are passages of Hayek's that describe a world operating according to
the rules of a benign abstract system that make it sound rather lovely. To understand
neoliberalism, we must see that it has an appeal.
However, there is no perfect order of price signals. People do not simply act according to
economic self-interest. Therefore, neoliberalism is a utopian political project like any
other, requiring the brute power of the state to enforce ideological tenets. With tragic
irony, the neoliberal order eventually becomes not dissimilar to the totalitarian regimes
that Hayek railed against.
"Liberal" originally meant the freedom to trade and do business. Before liberalism trade was
controlled by cartels, guilds and gifted by prerogative. The freedom to trade is not the root
cause of our problems. The drift to monopoly and the legal enforcement of it is new and
should be resisted. But the freedom to do business is a freedom for us all.
1. Hayek's book 'The Road to Serfdom' uses an erroneous metaphor. He argues that if we allow gov regulation, services and spending
to continue then we will end up serfs. However, serfs are basically the indentured or slave labourers of private citizens and
landowners not of the state. Only in a system of private capital can there be serfs. Neo liberalism creates serfs not a public
system.
2. According to Hayek all regulation on business should be eliminated and only labour should be regulated to make it cheap
and contain it so that private investors can have their returns guaranteed. Hence the purpose of the state is to pass laws to
suppress workers.
These two things illustrate neo-liberalism. Deception and repression of labour.
"... First, neoliberalism, to those who understand how finance works (no mainstream economist, then) was never an economic theory, but rather a business model: essentially it describes how to structure an economy for rent seeking. ..."
"... Michael Hudson describes it as "pro-finance". His definition of austerity, which is part and parcel of the neoliberal business model, is also worth quoting: "austerity is what a good economic policy looks like to a creditor [rentier]"; in other words, it has nothing to do with the economically meaningless notion of good housekeeping (state finances are radically different from household finances). ..."
"... The term "neoliberal" is misleading. Neoliberals put capital above people. Neoliberals are the next-worst thing to neoconservatives. That said, why would anybody trust a pols promise? ..."
Neoliberalism is not an ideology in its practical application. It is a business model for
structuring the economy for rent seeking or wealth extraction: turning everything into a cash
cow to be milked until it's dry and then move on to the next one.
First, neoliberalism, to those who understand how finance works (no mainstream
economist, then) was never an economic theory, but rather a business model: essentially it
describes how to structure an economy for rent seeking.
Michael Hudson describes it as "pro-finance". His definition of austerity, which is
part and parcel of the neoliberal business model, is also worth quoting: "austerity is what a
good economic policy looks like to a creditor [rentier]"; in other words, it has nothing to
do with the economically meaningless notion of good housekeeping (state finances are
radically different from household finances).
Second, the freedom that Adam Smith talked about was freedom for the real economy from
rent seeking, from wealth extraction - freedom, in modern parlance, from the neoliberal
business model.
I think you are confusing the state with the ideology. Neoliberalism is an ideology that has
become embedded in the state. Of course it is the state that privatises public services to
private firms. But the ideology behind that policy is what George Monbiot is writing about.
I work for the NHS myself. Take for example, the policy of foundation trusts bidding to
run services hundreds of miles from their bases, etc. It may be state policy, but it is a
neoliberal nonsense. You would find the NHS littered with bureaucracy that would not be there
if the neoliberal ideology of trying to foster "competition" had not become a state
policy.
"Neoliberalism promised freedom – instead it delivers stifling control"
The term "neoliberal" is misleading.
Neoliberals put capital above people.
Neoliberals are the next-worst thing to neoconservatives.
That said, why would anybody trust a pols promise?
imo
Only the greedy, selfish, well off, egotistical and share holders believe that Public
Services should, could and would benefit from privatisation and deregulation.
Education and Health for example are (in theory) a universal right in the UK. As numbers
in the population rise and demographics change so do costs ie delivery of the service becomes
more expensive.As market force logic is introduced it also becomes less responsive - hence
people not able to get the right drugs and treatment and challenging and challenged young
people being denied an education that is vital for them in increasing numbers.
Meanwhile - as Public Services are devalued and denuded in this system the private sector
becomes increasingly wealthy at the top while its workers become poorer and less powerful at
the bottom.
With the introduction of Tory austerity which punishes the latter to the benefit of the
former there is no surprise that this system does not work and has provided a platform for
the unscrupulous greedy and corrupt to exploit Brexit and produce conditions which will take
'Neoliberalism' to where logic suggests it would always go - with the powerful rich protected
minority exerting their power over an increasingly poor and powerless majority.
Unlike the privatisations of the 80s and 90s there's barely any pretence these days
that new sell-offs are anything more than simply part of a quest to find new avenues for
profit-making in an economy with tons of liquid capital but not enough places to profitability
put it.
Back in the Thatcher/Reagan years there were at people around who genuinely believed in the
superiority of the market, or at least, made the effort to set out an intellectual case for
it.
Now we're in a different era. After 2008, hardly anyone really believes in neoliberal
ideas anymore, not to the point that they'd openly make the case for them anyway. But while
different visions have appeared to some extent on both left and right, most of those in
positions of power and influence have so internalised Thatcher's 'there is no alternative'
that it's beyond their political horizons to treat any alternatives which do emerge as
serious propositions, let alone come up with their own.
So neoliberalism stumbles on almost as a reflex action. Ben Fine calls it a 'zombie' but I
think the better analogy is cannibalism. Unlike the privatisations of the 80s and 90s there's
barely any pretence these days that new sell-offs are anything more than simply part of a
quest to find new avenues for profit-making in an economy with tons of liquid capital but not
enough places to profitability put it. Because structurally speaking most of the economy is
tapped out.
Privatising public services at this point is just a way to asset strip and/or funnel
public revenue streams to a private sector which has been stuck in neoliberal short-term, low
skill, low productivity, low wage, high debt mode for so long that it has lost the ability to
grow. So now it is eating itself, or at least eating the structures which hold it up and
allow it to survive.
"... "the administrator uses social science the way the drunk uses a lamppost, for support rather than illumination." Scholars' disinclination to be used in this way helps explain more of the distance. ..."
The evidence suggests that foreign policymakers do not seek insight from scholars, but
rather support for what they already want to do.
As Desch quotes a World War II U.S. Navy anthropologist, "the administrator uses social
science the way the drunk uses a lamppost, for support rather than illumination." Scholars'
disinclination to be used in this way helps explain more of the distance.
It was neoliberalism that moved production to China and created condition for the Chinese own companies to compete. Now Trump
goes against neoliberal dogma. So it is not accidental that he was under attack and Russiagate was launched to ensure his resignation.
Notable quotes:
"... in an editorial in the state-run People's Daily, Beijing has warned that China has "the strength and patience to withstand the trade war, and will fight to the end if the U.S. administration persists." ..."
"... China's controversial telecom giant, Huawei, filed a civil lawsuit against the US Commerce Department over the mishandling of telecommunications equipment seized by American officials, demanding its release. ..."
"... However, the equipment was not shipped back to China. It was "purportedly" seized en route and is currently sitting in Alaska, as US officials wanted to investigate whether the shipment required a special license . Such requests are usually processed within 45 days, but nearly two years have already passed since then. ..."
"... "The equipment, to the best of HT USA's knowledge, remains in a bureaucratic limbo in an Alaskan warehouse," Huawei said in its lawsuit, which was filed on Friday in federal court in Washington. ..."
"... Huawei contends that the equipment did not require a license because it did not fall into a controlled category and because it was made outside the United States and was being returned to the same country from which it came. ..."
"... The lawsuit comes amid a bitter row between two world's largest economies, and Washington's crackdown on Huawei. In May, the Trump administration added Huawei to the entity list, barring it from buying needed U.S. parts and components without U.S. government approval. The US alleges that Huawei could be spying for the Chinese government, a claim which the company has repeatedly denied. ..."
"... Of course, Huawei is not the only Chinese tech company that the White House decided to put on its trade blacklist. On Friday, five Chinese organizations – supercomputer maker Sugon, three its affiliates, and the Wuxi Jiangnan Institute of Computing Technology – were added to entity list on the grounds that their activities are allegedly contrary to US national security and foreign policy interests. ..."
"... don't expect a breakthrough: as Goldman's trade deal odds index found last week... the probability of a breakthrough between the two nations is roughly one in five. ..."
It's the weekend, which means the trade war between the US and China moved to the front page of the local propaganda media (in both
the US and China). And while Trump has yet to slam Beijing, focusing this morning on the all time high in the market instead, China
has been busy and in an editorial in the state-run People's Daily, Beijing has warned that China has "the strength and patience
to withstand the trade war, and will fight to the end if the U.S. administration persists."
Echoing what China's notorious twitter mouthpiece Hu Xijin said yesterday, the editorial said that just days ahead of the much
anticipated G-20 summit in Osaka where Trump and Xi are set to meet, " the U.S. must drop all tariffs imposed on China if it wants
to negotiate on trade, and only an equal dialogue can resolve the issue and lead to a win-win", according to Bloomberg.
The communist party's official paper also said the US had failed to take into account the interests of its own people, and they
are paying higher costs due to the trade dispute. "Wielding a big stick of tariffs" also disregards the condition of the U.S. economy
and the international economic order, according to the editorial.
Beijing's official warning to the US ended as follows: if the U.S. chooses to talk, "then it must show some good faith, take account
of key concerns from both sides and cancel all tariffs."
And just to prove that China isn't a paper tiger whose threats will be confined to the local newspapers,
Reuters reported that overnight China's controversial telecom giant, Huawei, filed a civil lawsuit against the US Commerce
Department over the mishandling of telecommunications equipment seized by American officials, demanding its release.
In an almost absurd reversal, the company whose entire existence can be traced to stealing and reverse-engineering foreign technology
and
trampling over corporate ethics , the complaint alleges that the US government took possession of hardware, including an ethernet
switch and computer server, which was transported from China to an independent laboratory in California for testing and certification
back in 2017.
However, the equipment was not shipped back to China. It was "purportedly" seized en route and is currently sitting in Alaska,
as US officials wanted to investigate whether the shipment required a special license . Such requests are usually processed within
45 days, but nearly two years have already passed since then.
"The equipment, to the best of HT USA's knowledge, remains in a bureaucratic limbo in an Alaskan warehouse," Huawei said in
its lawsuit, which was filed on Friday in federal court in Washington.
Huawei contends that the equipment did not require a license because it did not fall into a controlled category and because
it was made outside the United States and was being returned to the same country from which it came.
The company is not seeking any financial compensation and is not challenging the seizure itself, but is sending a message to Washington,
saying "post-seizure failures to act are unlawful", in effect charging the Trump admin with doing precisely what it, itself has been
accused of. Huawei wants to force the Commerce Department to decide whether an export license is really necessary and, if not, release
the withheld equipment.
The lawsuit comes amid a bitter row between two world's largest economies, and Washington's crackdown on Huawei. In May, the Trump
administration added Huawei to the entity list, barring it from buying needed U.S. parts and components without U.S. government approval.
The US alleges that Huawei could be spying for the Chinese government, a claim which the company has repeatedly denied.
Huawei CFO Meng Wanzhou, daughter of the company's founder, has been detained in Canada since December on a U.S. warrant. She
is fighting extradition on charges that she misled global banks about Huawei's relationship with a company operating in Iran.
Of course, Huawei is not the only Chinese tech company that the White House decided to put on its trade blacklist. On Friday,
five Chinese organizations – supercomputer maker Sugon, three its affiliates, and the Wuxi Jiangnan Institute of Computing Technology
– were added to entity list on the grounds that their activities are allegedly contrary to US national security and foreign policy
interests.
The fresh US blacklisting comes ahead of crucial talks between US President Donald Trump and Chinese President Xi Jinping in Osaka,
Japan, which are intended to ease tensions between the two sides. Still, don't expect a breakthrough: as
Goldman's
trade deal odds index found last week... the probability of a breakthrough between the two nations is roughly one in five.
"... As I have called to attention before , a monumental rip-off is about to take place once again. Both the Democrats and Republicans are united in their commitment to continue to feed the U.S. war machine with dollars extracted -- to the tune of 750 billion dollars -- from the working class and transferred to the pockets of the military/industrial complex. ..."
"... As seen, a state's legitimacy was based on the extent to which it recognized, protected and fulfilled the human rights of all its citizens and residents. Those rights included not only the right to information, assembly, speech and to participation in the national political life of the nation but also the right to food, water, healthcare, education, employment, substantial social security throughout life, and not just as a senior citizen. ..."
"... The counterrevolutionary program of the late 60s and 70s, especially the turn to neoliberalism which began in the 70s, would reject this paradigm and redefine the role of the state. The obligation of the state to recognize, protect and fulfill human rights was eliminated from the role of the state under neoliberalism. ..."
"... Today the consequences of four decades of neoliberalism in the global South and now in the cosmopolitan North have created a crisis of legitimacy that has made state policies more dependent on force and militarism than in any other time, including the civil war and the turmoil of the 1930s. ..."
"... Today, contrary to the claims of capitalism to guarantee the human right to a living wage ensuring "an existence worthy of human dignity," the average worker is making, adjusted for inflation, less than in 1973; i.e., some 46 years-ago. 140 million are either poor or have low-income; 80% living paycheck to paycheck; 34 million are still without health insurance; 40 million live in "official poverty;" and more in unofficial poverty as measured by alternative supplemental poverty (SPM). And more than half of those over 55 years-old have no retirement funds other than Social Security. ..."
austerity has been a central component of state policy at every level of government in the
U.S. and in Europe for the last four decades. In Europe, as the consequences of neoliberal
policies imposed on workers began to be felt and understood, the result was intense opposition.
However, in the U.S. the unevenness of how austerity policies were being applied, in particular
the elimination or reduction in social services that were perceived to be primarily directed at
racialized workers, political opposition was slow to materialize.
Today, however, relatively privileged workers who were silent as the neoliberal "Washington
consensus" was imposed on the laboring classes in the global South -- through draconian
structural adjustment policies that result in severe cutbacks in state expenditures for
education, healthcare, state employment and other vital needs -- have now come to understand
that the neoliberal program of labor discipline and intensified extraction of value from
workers, did not spare them.
The deregulation of capital, privatization of state functions -- from road construction to
prisons, the dramatic reduction in state spending that results in cuts in state supported
social services and goods like housing and access to reproductive services for the poor --
represent the politics of austerity and the role of the neoliberal state.
This materialist analysis is vitally important for understanding the dialectical
relationship between the general plight of workers in the U.S. and the bipartisan collaboration
to raid the Federal budget and to reduce social spending in order to increase spending on the
military. This perspective is also important for understanding the imposition of those policies
as a violation of the fundamental human rights of workers, the poor and the oppressed.
For the neoliberal state, the concept of human rights does not exist.
As I have called
to attention before , a monumental rip-off is about to take place once again. Both the
Democrats and Republicans are united in their commitment to continue to feed the U.S. war
machine with dollars extracted -- to the tune of 750 billion dollars -- from the working class
and transferred to the pockets of the military/industrial complex.
The only point of debate is now whether or not the Pentagon will get the full 750 billion or
around 733 billion. But whether it is 750 billion
or 733 billion, the one sector that is not part of this debate is the public. The attention
of the public has been adroitly diverted by the absurd reality show that is Russiagate. But
this week, even though the budget debate has been disappeared by corporate media, Congress is
set to begin debate on aspects of the budget and specifically on the National Defense
Authorization Act (NDAA).
Raising the alarm on this issue is especially critical at this moment. As tensions escalate
in the Persian Gulf, the corporate media is once again abdicating its public responsibility to
bring unbiased, objective information to the public and instead is helping to generate support
for war with Iran.
The Democrats, who have led the way with anti-Iran policies over the last few decades, will
be under enormous pressure not to appear to be against enhancing military preparedness and are
likely to find a way to give Trump and the Pentagon everything they want.
Support for Human Rights and Support for Empire is an Irreconcilable Contradiction
The assumption of post-war capitalist order was that the state would be an instrument to
blunt the more contradictory aspects of capitalism. It would regulate the private sector,
provide social welfare support to the most marginal elements of working class, and create
conditions for full employment. This was the Keynesian logic and approach that informed liberal
state policies beginning in the 1930s.
The idea of reforming human rights fits neatly into that paradigm.
As seen, a state's legitimacy was based on the extent to which it recognized, protected and
fulfilled the human rights of all its citizens and residents. Those rights included not only
the right to information, assembly, speech and to participation in the national political life
of the nation but also the right to food, water, healthcare, education, employment, substantial
social security throughout life, and not just as a senior citizen.
The counterrevolutionary program of the late 60s and 70s, especially the turn to
neoliberalism which began in the 70s, would reject this paradigm and redefine the role of the
state. The obligation of the state to recognize, protect and fulfill human rights was
eliminated from the role of the state under neoliberalism.
Today the consequences of four decades of neoliberalism in the global South and now in the
cosmopolitan North have created a crisis of legitimacy that has made state policies more
dependent on force and militarism than in any other time, including the civil war and the
turmoil of the 1930s.
The ideological glue provided by the ability of capitalism to deliver the goods to enough of
the population which guaranteed loyalty and support has been severely weakened by four decades
of stagnant wages, increasing debt, a shrinking middle-class, obscene economic inequality and
never-ending wars that have been disproportionately shouldered by the working class.
Today, contrary to the claims of capitalism to guarantee the human right to a living wage
ensuring "an existence worthy of human dignity," the average worker is making, adjusted for
inflation, less than in 1973; i.e., some 46 years-ago. 140 million are either poor or have
low-income; 80% living paycheck to paycheck; 34 million are still without health insurance; 40
million live in "official poverty;" and more in unofficial poverty as measured by alternative
supplemental poverty (SPM). And more than half of those over 55 years-old have no retirement
funds other than Social Security.
In a report, Philp Alston , the UN's special rapporteur on extreme poverty and human rights,
points out that : the US is one of the world's wealthiest countries. It spends more on
national defense than China, Saudi Arabia, Russia, the United Kingdom, India, France and Japan
combined.
However, that choice in public expenditures must be seen in comparison to the other factors
he lays out:
US infant mortality rates in 2013 were the highest in the developed world.
Americans can expect to live shorter and sicker lives, compared to people living in any
other rich democracy, and the "health gap" between the US and its peer countries continues to
grow.
US inequality levels are far higher than those in most European countries
In terms of access to water and sanitation the US ranks 36th in the world.
The youth poverty rate in the United States is the highest across the OECD with one
quarter of youth living in poverty compared to less than 14% across the OECD.
For African Americans in particular, neoliberalism has meant, jobs lost, hollowed out
communities as industries relocated first to the South and then to Mexico and China, the
disappearance of affordable housing, schools and hospital closings, infant and maternal
mortality at global South levels, and mass incarceration as the unskilled, low-wage Black labor
has become economically redundant.
This is the backdrop and context for the budget "debate" and Trump's call to cut spendings
to Departments of Housing and Urban Development, Education, Labor, Health and Human Services,
the Environmental Protection Agency, and even the State Department.
The U.S. could find 6 trillion dollars for war since 2003 and 16 trillion to bail out the
banks after the financial sector crashed the economy, but it can't find money to secure the
human rights of the people.
This is the one-sided class war that we find ourselves in; a war with real deaths and
slower, systematic structural violence. Neither the Democrats nor the Republicans can be
depended on to secure our rights or protect the world from the U.S. atrocities. That
responsibility falls on the people who reside at the center of the Empire to not only struggle
for ourselves but to put a brake on the Empire's ability to spread death and destruction across
the planet.
Ajamu Baraka is a board member with Cooperation Jackson, the national organizer of the
Black Alliance for Peace and was the 2016 candidate for vice president on the Green Party
ticket. He is an editor and contributing columnist for the Black Agenda Report and contributing
columnist for Counterpunch. He can be reached at www.AjamuBaraka.com Read other articles by Ajamu , or
visit Ajamu's website .
"... The Obama administration also proved itself largely incapable of enforcing laws against white-collar crime. Department of Justice careerists like Eric Holder and Lanny Breuer were terrified that anything more than gentle wrist-slap fines would undermine the stability of the financial sector . As a result, despite massive fraud carried out during the housing bubble and the ensuing crash , no major bank and none of their top executives were convicted of anything. ..."
"... Most damning of all, neoliberalism under Obama turned in the worst economic performance since the 1930s . Despite the fact that the 2008 crash left obvious excess capacity, there was no catch-up growth -- on the contrary, growth was about two-thirds the 1945-2007 average, with no sign of speeding up on the horizon. Even 10 years after the start of the recession, there is every sign that the economy is still depressed. ..."
"... So despite the confident predictions of the Chicago School, the political economy created by neoliberalism turned out to be identical to 1920s laissez-faire economics in every important respect. The United States is once again a country which functions mostly on behalf of a tiny capitalist elite. It has the same extreme inequality, the same bloated, crisis-prone financial sector, the same corruption, and the same political backlash to the status quo and rising extremist factions. ..."
From the late 1980s to 2016, neoliberal ideas held hegemonic sway among the Democratic
elite. But the economy created by this ideology -- and the ensuing crises -- is a major reason
why Clinton lost to Trump and the party is completely out of power today. This obvious failure
has provided an ideological opening that the American left has been eager to fill.
Yet even the left-wing is divided about the best way forward. Should it follow Elizabeth
Warren's lead and promise a return to the trust-busting ways of the early 20th century? Or
should it emulate the more sweeping, Nordic-style politics of Bernie Sanders? Or perhaps the
Democratic Socialists of America are right and something even more extreme is needed.
... ... ...
The Democrats swept to power in a wave election in 2008, as the economy entered free fall.
They had every opportunity to abandon neoliberalism and return to the kind of New Deal policy
that the Great Recession called for -- and they blew it.
... ... ...
Incredibly, the Democrats responded by doubling down on neoliberalism. Over and over again
during the Obama years, the party elite proved itself overly sympathetic to the concerns of the
market.
Instead of attacking the concentrated wealth and power of big finance, Democrats took the
neoliberal route and passed a blizzard of complicated rules in the Dodd-Frank financial reform
package that attempted to reduce specific financial sector risk. Many of those provisions were
quite worthy, to be sure, but after the crisis the biggest banks are even
larger than they were before the crisis and financial sector profits quickly bounced back
to their previous levels.
The Obama administration also proved itself largely incapable of enforcing laws against
white-collar crime. Department of Justice careerists like Eric Holder and Lanny Breuer were terrified
that anything more than gentle wrist-slap fines would undermine
the stability of the financial sector . As a result, despite
massive fraud carried out
during the housing bubble and the ensuing crash , no major
bank and none of their top executives were convicted of anything.
Most damning of all, neoliberalism under Obama turned in the worst economic performance
since the 1930s . Despite the fact that the 2008 crash left obvious excess capacity, there
was no catch-up growth -- on the contrary, growth was about two-thirds the 1945-2007 average,
with no sign of speeding up on the horizon. Even 10 years after the start of the recession,
there is every sign that the economy is still depressed.
So despite the confident predictions of the Chicago School, the political economy created by
neoliberalism turned out to be identical to 1920s laissez-faire economics in every important
respect. The United States is once again a country which functions mostly on behalf of a tiny
capitalist elite. It has the same extreme inequality, the same bloated, crisis-prone financial
sector, the same corruption, and the same political backlash to the status quo and rising
extremist factions.
"... A suicide occurs in the United States roughly once every 12 minutes . What's more, after decades of decline, the rate of self-inflicted deaths per 100,000 people annually -- the suicide rate -- has been increasing sharply since the late 1990s. Suicides now claim two-and-a-half times as many lives in this country as do homicides , even though the murder rate gets so much more attention. ..."
"... In some states the upsurge was far higher: North Dakota (57.6%), New Hampshire (48.3%), Kansas (45%), Idaho (43%). ..."
"... Since 2008 , suicide has ranked 10th among the causes of death in this country. For Americans between the ages of 10 and 34, however, it comes in second; for those between 35 and 45, fourth. The United States also has the ninth-highest rate in the 38-country Organization for Economic Cooperation and Development. Globally , it ranks 27th. ..."
"... The rates in rural counties are almost double those in the most urbanized ones, which is why states like Idaho, Kansas, New Hampshire, and North Dakota sit atop the suicide list. Furthermore, a far higher percentage of people in rural states own guns than in cities and suburbs, leading to a higher rate of suicide involving firearms, the means used in half of all such acts in this country. ..."
"... Education is also a factor. The suicide rate is lowest among individuals with college degrees. Those who, at best, completed high school are, by comparison, twice as likely to kill themselves. Suicide rates also tend to be lower among people in higher-income brackets. ..."
"... Evidence from the United States , Brazil , Japan , and Sweden does indicate that, as income inequality increases, so does the suicide rate. ..."
"... One aspect of the suicide epidemic is puzzling. Though whites have fared far better economically (and in many other ways) than African Americans, their suicide rate is significantly higher . ..."
"... The higher suicide rate among whites as well as among people with only a high school diploma highlights suicide's disproportionate effect on working-class whites. This segment of the population also accounts for a disproportionate share of what economists Anne Case and Angus Deaton have labeled " deaths of despair " -- those caused by suicides plus opioid overdoses and liver diseases linked to alcohol abuse. Though it's hard to offer a complete explanation for this, economic hardship and its ripple effects do appear to matter. ..."
"... Trump has neglected his base on pretty much every issue; this one's no exception. ..."
Yves here. This post describes how the forces driving the US suicide surge started well before the Trump era, but explains how
Trump has not only refused to acknowledge the problem, but has made matters worse.
However, it's not as if the Democrats are embracing this issue either.
BY Rajan Menon, the Anne and Bernard Spitzer Professor of International Relations at the Powell School, City College of New
York, and Senior Research Fellow at Columbia University's Saltzman Institute of War and Peace Studies. His latest book is The Conceit of Humanitarian Intervention
Originally published at
TomDispatch .
We hear a lot about suicide when celebrities like
Anthony Bourdain and
Kate Spade die by their own hand.
Otherwise, it seldom makes the headlines. That's odd given the magnitude of the problem.
In 2017, 47,173 Americans killed themselves.
In that single year, in other words, the suicide count was nearly
seven times greater than the number
of American soldiers killed in the Afghanistan and Iraq wars between 2001 and 2018.
A suicide occurs in the United States roughly once every
12 minutes . What's more, after decades
of decline, the rate of self-inflicted deaths per 100,000 people annually -- the suicide rate -- has been increasing sharply since
the late 1990s. Suicides now claim two-and-a-half times as many lives in this country as do
homicides , even
though the murder rate gets so much more attention.
In other words, we're talking about a national
epidemic of self-inflicted
deaths.
Worrisome Numbers
Anyone who has lost a close relative or friend to suicide or has worked on a suicide hotline (as I have) knows that statistics
transform the individual, the personal, and indeed the mysterious aspects of that violent act -- Why this person? Why now? Why in
this manner? -- into depersonalized abstractions. Still, to grasp how serious the suicide epidemic has become, numbers are a necessity.
According to a 2018 Centers for Disease Control study , between
1999 and 2016, the suicide rate increased in every state in the union except Nevada, which already had a remarkably high rate. In
30 states, it jumped by 25% or more; in 17, by at least a third. Nationally, it increased
33% . In some states the upsurge was far
higher: North Dakota (57.6%), New Hampshire (48.3%), Kansas (45%), Idaho (43%).
Alas, the news only gets grimmer.
Since 2008 , suicide has ranked 10th
among the causes of death in this country. For Americans between the ages of 10 and 34, however, it comes in second; for those between
35 and 45, fourth. The United States also has the ninth-highest
rate in the 38-country Organization for Economic Cooperation and Development.
Globally , it ranks 27th.
More importantly, the trend in the United States doesn't align with what's happening elsewhere in the developed world. The World
Health Organization, for instance, reports
that Great Britain, Canada, and China all have notably lower suicide rates than the U.S.,
as do all but
six countries in the European Union. (Japan's is only slightly lower.)
World Bank statistics show that, worldwide,
the suicide rate fell from 12.8 per 100,000 in 2000 to 10.6 in 2016. It's been falling in
China ,
Japan
(where it has declined steadily for nearly a
decade and is at its lowest point in 37 years), most of Europe, and even countries like
South Korea and
Russia that
have a significantly higher suicide rate than the United States. In Russia, for instance, it has dropped by nearly 26% from a
high point of 42 per 100,000 in
1994 to 31 in 2019.
We know a fair amount about the patterns
of suicide in the United States. In 2017, the rate was highest for men between the ages of 45 and 64 (30 per 100,000) and those 75
and older (39.7 per 100,000).
The rates in rural counties are almost double those in the most urbanized ones, which is why states like Idaho, Kansas, New
Hampshire, and North Dakota sit atop the suicide list. Furthermore, a far higher percentage of people in rural states own
guns than in cities and suburbs, leading to a
higher rate of suicide involving firearms, the means used in half
of all such acts in this country.
There are gender-based differences as well.
From 1999 to 2017, the rate for men was substantially higher than for women -- almost four-and-a-half times higher in the first of
those years, slightly more than three-and-a-half times in the last.
Education is also a factor. The suicide rate is
lowest among individuals with college degrees. Those who, at best, completed high school are, by comparison, twice as likely to kill
themselves. Suicide rates also tend to be lower
among people in higher-income brackets.
The Economics of Stress
This surge in the suicide rate has taken place in years during which the working class has experienced greater economic hardship
and psychological stress. Increased competition from abroad and outsourcing, the results of globalization, have contributed to job
loss, particularly in economic sectors like manufacturing, steel, and mining that had long been mainstays of employment for such
workers. The jobs still available often paid less and provided fewer benefits.
Technological change, including computerization, robotics, and the coming of artificial intelligence, has similarly begun to displace
labor in significant ways, leaving Americans without college degrees, especially those 50 and older, in
far more difficult straits when it comes to
finding new jobs that pay
well. The lack of anything resembling an
industrial policy of a sort that exists in Europe
has made these dislocations even more painful for American workers, while a sharp decline in private-sector union membership
-- down
from nearly 17% in 1983 to 6.4% today -- has reduced their ability to press for higher wages through collective bargaining.
Furthermore, the inflation-adjusted median wage has barely budged
over the last four decades (even as
CEO salaries have soared). And a decline in worker productivity doesn't explain it: between 1973 and 2017 productivity
increased by 77%, while a worker's average hourly wage only
rose by 12.4%. Wage stagnation has made it
harder for working-class
Americans to get by, let alone have a lifestyle comparable to that of their parents or grandparents.
The gap in earnings between those at the top and bottom of American society has also increased -- a lot. Since 1979, the
wages of Americans in the 10th percentile increased by a pitiful
1.2%. Those in the 50th percentile did a bit better, making a gain of 6%. By contrast, those in the 90th percentile increased by
34.3% and those near the peak of the wage pyramid -- the top 1% and especially the rarefied 0.1% -- made far more
substantial
gains.
And mind you, we're just talking about wages, not other forms of income like large stock dividends, expensive homes, or eyepopping
inheritances. The share of net national wealth held by the richest 0.1%
increased from 10% in the 1980s to 20% in 2016.
By contrast, the share of the bottom 90% shrank in those same decades from about 35% to 20%. As for the top 1%, by 2016 its share
had increased to almost 39% .
The precise relationship between economic inequality and suicide rates remains unclear, and suicide certainly can't simply be
reduced to wealth disparities or financial stress. Still, strikingly, in contrast to the United States, suicide rates are noticeably
lower and have been declining in
Western
European countries where income inequalities are far less pronounced, publicly funded healthcare is regarded as a right (not
demonized as a pathway to serfdom), social safety nets far more extensive, and
apprenticeships and worker
retraining programs more widespread.
Evidence from the United States
, Brazil ,
Japan , and
Sweden does indicate that, as income inequality increases,
so does the suicide rate. If so, the good news is that progressive economic policies -- should Democrats ever retake the White
House and the Senate -- could make a positive difference. A study
based on state-by-state variations in the U.S. found that simply boosting the minimum wage and Earned Income Tax Credit by 10%
appreciably reduces the suicide rate among people without college degrees.
The Race Enigma
One aspect of the suicide epidemic is puzzling. Though whites have fared far better economically (and in many other ways)
than African Americans, their suicide rate is significantly
higher . It increased from 11.3 per 100,000
in 2000 to 15.85 per 100,000 in 2017; for African Americans in those years the rates were 5.52 per 100,000 and 6.61 per 100,000.
Black men are
10 times more likely to be homicide victims than white men, but the latter are two-and-half times more likely to kill themselves.
The higher suicide rate among whites as well as among people with only a high school diploma highlights suicide's disproportionate
effect on working-class whites. This segment of the population also accounts for a disproportionate share of what economists Anne
Case and Angus Deaton have labeled "
deaths of despair
" -- those caused by suicides plus
opioid overdoses
and liver diseases linked to alcohol abuse. Though it's hard to offer a complete explanation for this, economic hardship and
its ripple effects do appear to matter.
According to a study by the
St. Louis Federal Reserve , the white working class accounted for 45% of all income earned in the United States in 1990, but
only 27% in 2016. In those same years, its share of national wealth plummeted, from 45% to 22%. And as inflation-adjusted wages have
decreased for
men without college degrees, many white workers seem to have
lost hope of success of
any sort. Paradoxically, the sense of failure and the accompanying stress may be greater for white workers precisely because they
traditionally were much
better off economically than their African American and Hispanic counterparts.
In addition, the fraying of communities knit together by employment in once-robust factories and mines has increased
social isolation
among them, and the evidence that it -- along with
opioid addiction and
alcohol abuse -- increases the risk of suicide
is strong . On top of that,
a significantly higher proportion of
whites than blacks and Hispanics own firearms, and suicide rates are markedly higher in states where gun
ownership is more widespread.
Trump's Faux Populism
The large increase in suicide within the white working class began a couple of decades before Donald Trump's election. Still,
it's reasonable to ask what he's tried to do about it, particularly since votes from these Americans helped propel him to the White
House. In 2016, he received
64% of the votes of whites without college degrees; Hillary Clinton, only 28%. Nationwide, he beat Clinton in
counties where deaths of despair rose significantly between 2000 and 2015.
White workers will remain crucial to Trump's chances of winning in 2020. Yet while he has spoken about, and initiated steps aimed
at reducing, the high suicide rate among
veterans , his speeches and tweets have never highlighted the national suicide epidemic or its inordinate impact on white workers.
More importantly, to the extent that economic despair contributes to their high suicide rate, his policies will only make matters
worse.
The real benefits from the December 2017 Tax Cuts and Jobs Act championed by the president and congressional Republicans flowed
to those on the top steps of the economic ladder. By 2027, when the Act's provisions will run out, the wealthiest Americans are expected
to have captured
81.8% of the gains. And that's not counting the windfall they received from recent changes in taxes on inheritances. Trump and
the GOP
doubled the annual amount exempt from estate taxes -- wealth bequeathed to heirs -- through 2025 from $5.6 million per individual
to $11.2 million (or $22.4 million per couple). And who benefits most from this act of generosity? Not workers, that's for sure,
but every household with an estate worth $22 million or more will.
As for job retraining provided by the Workforce Innovation and Opportunity Act, the president
proposed
cutting that program by 40% in his 2019 budget, later settling for keeping it at 2017 levels. Future cuts seem in the cards as
long as Trump is in the White House. The Congressional Budget Office
projects that his tax cuts alone will produce even bigger budget
deficits in the years to come. (The shortfall last year was
$779 billion and it is expected to
reach $1 trillion by 2020.) Inevitably, the president and congressional Republicans will then demand additional reductions in spending
for social programs.
This is all the more likely because Trump and those Republicans also
slashed corporate taxes
from 35% to 21% -- an estimated
$1.4
trillion in savings for corporations over the next decade. And unlike the income tax cut, the corporate tax has
no end
date . The president assured his base that the big bucks those companies had stashed abroad would start flowing home and produce
a wave of job creation -- all without adding to the deficit. As it happens, however, most of that repatriated cash has been used
for corporate stock buy-backs, which totaled more than
$800 billion last year. That, in turn, boosted share prices, but didn't exactly rain money down on workers. No surprise, of course,
since the wealthiest 10% of Americans own at least
84% of all stocks and the bottom
60% have less than
2% of them.
And the president's corporate tax cut hasn't produced the tsunami of job-generating investments he predicted either. Indeed, in
its aftermath, more than 80% of American
companies stated that their plans for investment and hiring hadn't changed. As a result, the monthly increase in jobs has proven
unremarkable compared to President Obama's
second term, when the economic recovery that Trump largely inherited began. Yes, the economy did grow
2.3%
in 2017 and
2.9% in 2018 (though not
3.1% as the president claimed). There wasn't, however, any "unprecedented economic boom -- a boom that has rarely been seen before"
as he insisted in this year's State of the Union
Address .
Anyway, what matters for workers struggling to get by is growth in real wages, and there's nothing to celebrate on that front:
between 2017 and mid-2018 they actually
declined by 1.63% for white workers and 2.5% for African Americans, while they rose for Hispanics by a measly 0.37%. And though
Trump insists that his beloved tariff hikes are going to help workers, they will actually raise the prices of goods, hurting the
working class and other low-income Americans
the most .
Then there are the obstacles those susceptible to suicide face in receiving insurance-provided mental-health care. If you're a
white worker without medical coverage or have a policy with a deductible and co-payments that are high and your income, while low,
is too high to qualify for Medicaid, Trump and the GOP haven't done anything for you. Never mind the president's
tweet proclaiming that "the Republican Party Will Become 'The Party of Healthcare!'"
Let me amend that: actually, they have done something. It's just not what you'd call helpful. The
percentage of uninsured
adults, which fell from 18% in 2013 to 10.9% at the end of 2016, thanks in no small measure to
Obamacare , had risen to 13.7% by the end of last year.
The bottom line? On a problem that literally has life-and-death significance for a pivotal portion of his base, Trump has been
AWOL. In fact, to the extent that economic strain contributes to the alarming suicide rate among white workers, his policies are
only likely to exacerbate what is already a national crisis of epidemic proportions.
Trump is running on the claim that he's turned the economy around; addressing suicide undermines this (false) claim. To state
the obvious, NC readers know that Trump is incapable of caring about anyone or anything beyond his in-the-moment interpretation
of his self-interest.
Not just Trump. Most of the Republican Party and much too many Democrats have also abandoned this base, otherwise known as
working class Americans.
The economic facts are near staggering and this article has done a nice job of summarizing these numbers that are spread out
across a lot of different sites.
I've experienced this rise within my own family and probably because of that fact I'm well aware that Trump is only a symptom
of an entire political system that has all but abandoned it's core constituency, the American Working Class.
Yep It's not just Trump. The author mentions this, but still focuses on him for some reason. Maybe accurately attributing the
problems to a failed system makes people feel more hopeless. Current nihilists in Congress make it their duty to destroy once
helpful institutions in the name of "fiscal responsibility," i.e., tax cuts for corporate elites.
I'd assumed, the "working class" had dissappeared, back during Reagan's Miracle? We'd still see each other, sitting dazed on
porches & stoops of rented old places they'd previously; trying to garden, fix their car while smoking, drinking or dazed on something?
Those able to morph into "middle class" lives, might've earned substantially less, especially benefits and retirement package
wise. But, a couple decades later, it was their turn, as machines and foreigners improved productivity. You could lease a truck
to haul imported stuff your kids could sell to each other, or help robots in some warehouse, but those 80s burger flipping, rent-a-cop
& repo-man gigs dried up. Your middle class pals unemployable, everybody in PayDay Loan debt (without any pay day in sight?) SHTF
Bug-out bags® & EZ Credit Bushmasters began showing up at yard sales, even up North. Opioids became the religion of the proletariat
Whites simply had much farther to fall, more equity for our betters to steal. And it was damned near impossible to get the cops
to shoot you?
Man, this just ain't turning out as I'd hoped. Need coffee!
We especially love the euphemism "Deaths O' Despair." since it works so well on a Chyron, especially supered over obese crackers
waddling in crusty MossyOak™ Snuggies®
This is a very good article, but I have a comment about the section titled, "The Race Enigma." I think the key to understanding
why African Americans have a lower suicide rate lies in understanding the sociological notion of community, and the related concept
Emil Durkheim called social solidarity. This sense of solidarity and community among African Americans stands in contrast to the
"There is no such thing as society" neoliberal zeitgeist that in fact produces feelings of extreme isolation, failure, and self-recriminations.
An aside: as a white boy growing up in 1950s-60s Detroit I learned that if you yearned for solidarity and community what you had
to do was to hang out with black people.
" if you yearned for solidarity and community what you had to do was to hang out with black people."
amen, to that. in my case rural black people.
and I'll add Hispanics to that.
My wife's extended Familia is so very different from mine.
Solidarity/Belonging is cool.
I recommend it.
on the article we keep the scanner on("local news").we had a 3-4 year rash of suicides and attempted suicides(determined by chisme,
or deduction) out here.
all of them were despair related more than half correlated with meth addiction itself a despair related thing.
ours were equally male/female, and across both our color spectrum.
that leaves economics/opportunity/just being able to get by as the likely cause.
Actually, in the article it states:
"There are gender-based differences as well. From 1999 to 2017, the rate for men was substantially higher than for women -- almost
four-and-a-half times higher in the first of those years, slightly more than three-and-a-half times in the last."
which in some sense makes despair the wrong word, as females are actually quite a bit more likely to be depressed for instance,
but much less likely to "do the deed". Despair if we mean a certain social context maybe, but not just a psychological state.
Suicide deaths are a function of the suicide attempt rate and the efficacy of the method used. A unique aspect of the US is
the prevalence of guns in the society and therefore the greatly increased usage of them in suicide attempts compared to other
countries. Guns are a very efficient way of committing suicide with a very high "success" rate. As of 2010, half of US suicides
were using a gun as opposed to other countries with much lower percentages. So if the US comes even close to other countries in
suicide rates then the US will surpass them in deaths.
https://en.wikipedia.org/wiki/Suicide_methods#Firearms
Now we can add in opiates, especially fentanyl, that can be quite effective as well.
The economic crisis hitting middle America over the past 30 years has been quite focused on the states and populations that
also tend to have high gun ownership rates. So suicide attempts in those populations have a high probability of "success".
I would just take this opportunity to add that the police end up getting called in to prevent on lot of suicide attempts, and
just about every successful one.
In the face of so much blanket demonization of the police, along with justified criticism, it's important to remember that.
As someone who works in the mental health treatment system, acute inpatient psychiatry to be specific, I can say that of the
25 inpatients currently here, 11 have been here before, multiple times. And this is because of several issues, in my experience:
inadequate inpatient resources, staff burnout, inadequate support once they leave the hospital, and the nature of their illnesses.
It's a grim picture here and it's been this way for YEARS. Until MAJOR money is spent on this issue it's not going to get better.
This includes opening more facilities for people to live in long term, instead of closing them, which has been the trend I've
seen.
One last thing the CEO wants "asses in beds", aka census, which is the money maker. There's less profit if people get better
and don't return. And I guess I wouldn't have a job either. Hmmmm: sickness generates wealth.
"... Early in any psychology course, students are taught to be very cautious about accepting people's reports. A simple trick is to stage some sort of interruption to the lecture by confederates, and later ask the students to write down what they witnessed. Typically, they will misremember the events, sequences and even the number of people who staged the tableaux. Don't trust witnesses, is the message. ..."
"... The three assumptions -- lack of rationality, stubbornness, and costs -- imply that there is slim chance that people can ever learn or be educated out of their biases; ..."
"... So, are we as hopeless as some psychologists claim we are? In fact, probably not. Not all the initial claims have been substantiated. For example, it seems we are not as loss averse as previously claimed. Does our susceptibility to printed visual illusions show that we lack judgement in real life? ..."
"... Well the sad fact is that there's nobody in the position to protect "governments" from their own biases, and "scientists" from theirs ..."
"... Long ago a lawyer acquaintance, referring to a specific judge, told me that the judge seemed to "make shit up as he was going along". I have long held psychiatry fits that statement very well. ..."
"... Here we have a real scientist fighting the nonsense spreading from (neoclassical) economics into other realms of science/academia. ..."
"... Behavioral economics is a sideline by-product of neoclassical micro-economic theory. It tries to cope with experimental data that is inconsistent with that theory. ..."
"... Everything in neoclassical economics is a travesty. "Rational choice theory" and its application in "micro economics" is false from the ground up. It basically assumes that people are gobbling up resources without plan, meaning or relevant circumstances. Neoclassical micro economic theory is so false and illogical that I would not know where to start in a comment, so I should like to refer to a whole book about it: Keen, Steve: "Debunking economics". ..."
"... As the theory is totally wrong it is really not surprising that countless experiments show that people do not behave the way neoclassical theory predicts. How do economists react to this? Of course they assume that people are "irrational" because they do not behave according to their studied theory. (Why would you ever change your basic theory because of some tedious facts?) ..."
"... The title of the 1st ed. of Keen's book was "Debunking Economics: The Naked Emperor of the Social Sciences" which was simply a perfect title. ..."
Early in any psychology course, students are taught to be very cautious about accepting people's reports. A simple trick is
to stage some sort of interruption to the lecture by confederates, and later ask the students to write down what they witnessed.
Typically, they will misremember the events, sequences and even the number of people who staged the tableaux. Don't trust witnesses,
is the message.
Another approach is to show visual illusions, such as getting estimates of line lengths in the Muller-Lyer illusion, or studying
simple line lengths under social pressure, as in the Asch experiment, or trying to solve the Peter Wason logic problems, or the puzzles
set by Kahneman and Tversky. All these appear to show severe limitations of human judgment. Psychology is full of cautionary tales
about the foibles of common folk.
As a consequence of this softening up, psychology students come to regard themselves and most people as fallible, malleable, unreliable,
biased and generally irrational. No wonder psychologists feel superior to the average citizen, since they understand human limitations
and, with their superior training, hope to rise above such lowly superstitions.
However, society still functions, people overcome errors and many things work well most of the time. Have psychologists, for one
reason or another, misunderstood people, and been too quick to assume that they are incapable of rational thought?
He is particularly interested in the economic consequences of apparent irrationality, and whether our presumed biases really result
in us making bad economic decisions. If so, some argue we need a benign force, say a government, to protect us from our lack of capacity.
Perhaps we need a tattoo on our forehead: Diminished Responsibility.
The argument leading from cognitive biases to governmental paternalism -- in short, the irrationality argument -- consists
of three assumptions and one conclusion:
1. Lack of rationality. Experiments have shown that people's intuitions are systematically biased.
2. Stubbornness. Like visual illusions, biases are persistent and hardly corrigible by education.
3. Substantial costs. Biases may incur substantial welfare-relevant costs such as lower wealth, health, or happiness.
4. Biases justify governmental paternalism. To protect people from theirbiases, governments should "nudge" the public
toward better behavior.
The three assumptions -- lack of rationality, stubbornness, and costs -- imply that there is slim chance that people can ever
learn or be educated out of their biases; instead governments need to step in with a policy called libertarian paternalism (Thaler
and Sunstein, 2003).
So, are we as hopeless as some psychologists claim we are? In fact, probably not. Not all the initial claims have been substantiated.
For example, it seems we are not as loss averse as previously claimed. Does our susceptibility to printed visual illusions show that
we lack judgement in real life?
In Shepard's (1990) words, "to fool a visual system that has a full binocular and freely mobile view of a well-illuminated scene
is next to impossible" (p. 122). Thus, in psychology, the visual system is seen more as a genius than a fool in making intelligent
inferences, and inferences, after all, are necessary for making sense of the images on the retina.
Most crucially, can people make probability judgements? Let us see. Try solving this one:
A disease has a base rate of .1, and a test is performed that has a hit rate of .9 (the conditional probability of a positive
test given disease) and a false positive rate of .1 (the conditional probability of a positive test given no disease). What is
the probability that a random person with a positive test result actually has the disease?
Most people fail this test, including 79% of gynaecologists giving breast screening tests. Some researchers have drawn the conclusion
that people are fundamentally unable to deal with conditional probabilities. On the contrary, there is a way of laying out the problem
such that most people have no difficulty with it. Watch what it looks like when presented as natural frequencies:
Among every 100 people, 10 are expected to have a disease. Among those 10, nine are expected to correctly test positive. Among
the 90 people without the disease, nine are expected to falsely test positive. What proportion of those who test positive actually
have the disease?
In this format the positive test result gives us 9 people with the disease and 9 people without the disease, so the chance that
a positive test result shows a real disease is 50/50. Only 13% of gynaecologists fail this presentation.
Summing up the virtues of natural frequencies, Gigerenzer says:
When college students were given a 2-hour course in natural frequencies, the number of correct Bayesian inferences increased
from 10% to 90%; most important, this 90% rate was maintained 3 months after training (Sedlmeier and Gigerenzer, 2001). Meta-analyses
have also documented the "de-biasing" effect, and natural frequencies are now a technical term in evidence-based medicine (Akiet
al., 2011; McDowell and Jacobs, 2017). These results are consistent with a long literature on techniques for successfully teaching
statistical reasoning (e.g., Fonget al., 1986). In sum, humans can learn Bayesian inference quickly if the information is presented
in natural frequencies.
If the problem is set out in a simple format, almost all of us can all do conditional probabilities.
I taught my medical students about the base rate screening problem in the late 1970s, based on: Robyn Dawes (1962) "A note on
base rates and psychometric efficiency". Decades later, alarmed by the positive scan detection of an unexplained mass, I confided
my fears to a psychiatrist friend. He did a quick differential diagnosis on bowel cancer, showing I had no relevant symptoms, and
reminded me I had lectured him as a student on base rates decades before, so I ought to relax. Indeed, it was false positive.
Here are the relevant figures, set out in terms of natural frequencies
Every test has a false positive rate (every step is being taken to reduce these), and when screening is used for entire populations
many patients have to undergo further investigations, sometimes including surgery.
Setting out frequencies in a logical sequence can often prevent misunderstandings. Say a man on trial for having murdered his
spouse has previously physically abused her. Should his previous history of abuse not be raised in Court because only 1 woman in
2500 cases of abuse is murdered by her abuser? Of course, whatever a defence lawyer may argue and a Court may accept, this is back
to front. OJ Simpson was not on trial for spousal abuse, but for the murder of his former partner. The relevant question is: what
is the probability that a man murdered his partner, given that she has been murdered and that he previously battered her.
Accepting the figures used by the defence lawyer, if 1 in 2500 women are murdered every year by their abusive male partners, how
many women are murdered by men who did not previously abuse them? Using government figures that 5 women in 100,000 are murdered every
year then putting everything onto the same 100,000 population, the frequencies look like this:
So, 40 to 5, it is 8 times more probable that abused women are murdered by their abuser. A relevant issue to raise in Court about
the past history of an accused man.
Are people's presumed biases costly, in the sense of making them vulnerable to exploitation, such that they can be turned into
a money pump, or is it a case of "once bitten, twice shy"? In fact, there is no evidence that these apparently persistent logical
errors actually result in people continually making costly errors. That presumption turns out to be a bias bias.
Gigerenzer goes on to show that people are in fact correct in their understanding of the randomness of short sequences of coin
tosses, and Kahneman and Tversky wrong. Elegantly, he also shows that the "hot hand" of successful players in basketball is a real
phenomenon, and not a stubborn illusion as claimed.
With equal elegance he disposes of a result I had depended upon since Slovic (1982), which is that people over-estimate the frequency
of rare risks and under-estimate the frequency of common risks. This finding has led to the belief that people are no good at estimating
risk. Who could doubt that a TV series about Chernobyl will lead citizens to have an exaggerated fear of nuclear power stations?
The original Slovic study was based on 39 college students, not exactly a fair sample of humanity. The conceit of psychologists
knows no bounds. Gigerenzer looks at the data and shows that it is yet another example of regression to the mean. This is an apparent
effect which arises whenever the predictor is less than perfect (the most common case), an unsystematic error effect, which is already
evident when you calculate the correlation coefficient. Parental height and their children's heights are positively but not perfectly
correlated at about r = 0.5. Predictions made in either direction will under-predict in either direction, simply because they are
not perfect, and do not capture all the variation. Try drawing out the correlation as an ellipse to see the effect of regression,
compared to the perfect case of the straight line of r= 1.0
What diminishes in the presence of noise is the variability of the estimates, both the estimates of the height of the sons based
on that of their fathers, and vice versa. Regression toward the mean is a result of unsystematic, not systematic error (Stigler,1999).
Gigerenzer also looks at the supposed finding that people are over-confidence in predictions, and finds that it is another regression
to the mean problem.
Gigerenzer then goes on to consider that old favourite, that most people think they are better than average, which supposedly
cannot be the case, because average people are average.
Consider the finding that most drivers think they drive better than average. If better driving is interpreted as meaning fewer
accidents, then most drivers' beliefs are actually true. The number of accidents per person has a skewed distribution, and an
analysis of U.S. accident statistics showed that some 80% of drivers have fewer accidents than the average number of accidents
(Mousavi and Gigerenzer, 2011)
Then he looks at the classical demonstration of framing, that is to say, the way people appear to be easily swayed by how the
same facts are "framed" or presented to the person who has to make a decision.
A patient suffering from a serious heart disease considers high-risk surgery and asks a doctor about its prospects.
The doctor can frame the answer in two ways:
Positive Frame: Five years after surgery, 90% of patients are alive.
Negative Frame: Five years after surgery, 10% of patients are dead.
Should the patient listen to how the doctor frames the answer? Behavioral economists say no because both frames are logically
equivalent (Kahneman, 2011). Nevertheless, people do listen. More are willing to agree to a medical procedure if the doctor uses
positive framing (90% alive) than if negative framing is used (10% dead) (Moxeyet al., 2003). Framing effects challenge the assumption
of stable preferences, leading to preference reversals. Thaler and Sunstein (2008) who presented the above surgery problem, concluded
that "framing works because people tend to be somewhat mindless, passive decisionmakers" (p. 40)
Gigerenzer points out that in this particular example, subjects are having to make their judgements without knowing a key fact:
how many survive without surgery. If you know that you have a datum which is more influential. These are the sorts of questions patients
will often ask about, and discuss with other patients, or with several doctors. Furthermore, you don't have to spin a statistic.
You could simply say: "Five years after surgery, 90% of patients are alive and 10% are dead".
Gigerenzer gives an explanation which is very relevant to current discussions about the meaning of intelligence, and about the
power of intelligence tests:
In sum, the principle of logical equivalence or "description invariance" is a poor guide to understanding how human intelligence
deals with an uncertain world where not everything is stated explicitly. It misses the very nature of intelligence, the ability
to go beyond the information given (Bruner, 1973)
The key is to take uncertainty seriously, take heuristics seriously, and beware of the bias bias.
One important conclusion I draw from this entire paper is that the logical puzzles enjoyed by Kahneman, Tversky, Stanovich and
others are rightly rejected by psychometricians as usually being poor indicators of real ability. They fail because they are designed
to lead people up the garden path, and depend on idiosyncratic interpretations.
Critics of examinations of either intellectual ability or scholastic attainment are fond of claiming that the items are "arbitrary".
Not really. Scholastic tests have to be close to the curriculum in question, but still need to a have question forms which are simple
to understand so that the stress lies in how students formulate the answer, not in how they decipher the structure of the question.
Intellectual tests have to avoid particular curricula and restrict themselves to the common ground of what most people in a community
understand. Questions have to be super-simple, so that the correct answer follows easily from the question, with minimal ambiguity.
Furthermore, in the case of national scholastic tests, and particularly in the case of intelligence tests, legal authorities will
pore over the test, looking at each item for suspected biases of a sexual, racial or socio-economic nature. Designing an intelligence
test is a difficult and expensive matter. Many putative new tests of intelligence never even get to the legal hurdle, because they
flounder on matters of reliability and validity, and reveal themselves to be little better than the current range of assessments.
In conclusion, both in psychology and behavioural economics, some researchers have probably been too keen to allege bias in cases
where there are unsystematic errors, or no errors at all. The corrective is to learn about base rates, and to use natural frequencies
as a guide to good decision-making.
Don't bother boosting your IQ. Boost your understanding of natural frequencies.
Good concrete advice. Perhaps even more useful for those who need to explain things like this to others than for those seeking
to understand for themselves.
"intelligence deals with an uncertain world where not everything is stated explicitly. It misses the very nature of intelligence,
the ability to go beyond the information given (Bruner, 1973)"
"The key is to take uncertainty seriously, take heuristics seriously, and beware of the bias bias."
Actually I think this is an example of an increasingly common genre of malapropism, where the writer gropes for the right word,
finds one that is similar, and settles for that. The worst of it is that readers intuitively understand what was intended, and
then adopt the marginally incorrect usage themselves. That's perhaps how the world and his dog came to say "literally" when they
mean "figuratively". Maybe a topic for a future article?
In 2009 Google finished engineering a reverse search engine to find out what kind of searches people did most often. Seth Davidowitz
and Steven Pinker wrote a very fascinating/entertaining book using the tool called Everybody Lies
Everybody Lies offers fascinating, surprising, and sometimes laugh-out-loud insights into everything from economics to ethics
to sports to race to sex, gender, and more, all drawn from the world of big data. What percentage of white voters didn't vote
for Barack Obama because he's black? Does where you go to school effect how successful you are in life? Do parents secretly
favor boy children over girls? Do violent films affect the crime rate? Can you beat the stock market? How regularly do we lie
about our sex lives, and who's more self-conscious about sex, men or women?
Investigating these questions and a host of others, Seth Stephens-Davidowitz offers revelations that can help us understand
ourselves and our lives better. Drawing on studies and experiments on how we really live and think, he demonstrates in fascinating
and often funny ways the extent to which all the world is indeed a lab. With conclusions ranging from strange-but-true to thought-provoking
to disturbing, he explores the power of this digital truth serum and its deeper potential – revealing biases deeply embedded
within us, information we can use to change our culture, and the questions we're afraid to ask that might be essential to our
health – both emotional and physical. All of us are touched by big data every day, and its influence is multiplying. Everybody
Lies challenges us to think differently about how we see it and the world.
I shall treat this posting (for which many thanks, doc) as an invitation to sing a much-loved song: everybody should read Gigerenzer's
Reckoning with Risk. With great clarity it teaches what everyone ought to know about probability.
(It could also serve as a model for writing in English about technical subjects. Americans and Britons should study the English
of this German – he knows how, you know.)
Inspired by "The original Slovic study was based on 39 college students" I shall also sing another favorite song. Much of Psychology
is based on what small numbers of American undergraduates report they think they think.
" Gigerenzer points out that in this particular example, subjects are having to make their judgements without knowing a key fact:
how many survive without surgery. "
This one reminds of the false dichotomy. The patient has additional options! Like changing diet, and behaviours such as exercise,
elimination of occupational stress , etc.
The statistical outcomes for a person change when the person changes their circumstances/conditions.
@Tom
Welsh A disposition (conveyance) of an awkwardly shaped chunk out of a vast estate contained reference to "the slither of
ground bounded on or towards the north east and extending two hundred and twenty four meters or thereby along a chain link fence "
Not poor clients (either side) nor cheap lawyers. And who never erred?
Better than deliberately inserting "errors" to guarantee a stream of tidy up work (not unknown in the "professional" world)
in future.
Good article. 79% of gynaecologists fail a simple conditional probability test?! Many if not most medical research papers use
advanced statistics. Medical doctors must read these papers to fully understand their field. So, if medical doctors don't fully
understand them, they are not properly doing their job. Those papers use mathematical expressions, not English. Converting them
to another form of English, instead of using the mathematical expressions isn't a solution.
Regarding witnesses: When that jet crashed into Rockaway several years ago, a high percentage of witnesses said that they saw
smoke before the crash. But there was actually no smoke. The witnesses were adjusting what they saw to conform to their past experience
of seeing movie and newsreel footage of planes smoking in the air before a crash. Children actually make very good witnesses.
Regarding the chart. Missing, up there in the vicinity of cancer and heart disease. The third-leading cause of death. 250,000
per year, according to a 2016 Hopkins study. Medical negligence.
1. Lack of rationality. Experiments have shown that people's intuitions are systematically biased.
2. Stubbornness. Like visual illusions, biases are persistent and hardly corrigible by education.
3. Substantial costs. Biases may incur substantial welfare-relevant costs such as lower wealth, health, or happiness.
4. Biases justify governmental paternalism. To protect people from theirbiases, governments should "nudge" the public toward
better behavior.
Well the sad fact is that there's nobody in the position to protect "governments" from their own biases, and "scientists"
from theirs.
So, behind the smoke of all words and rationalisations, the law is unchanged: everyone strives to gain and exert as much power
as possible over as many others as possible. Most do that without writing papers to say it is right, others write papers,
others books. Anyway, the fundamental law would stay as it is even if all this writing labour was spared, wouldn't it?
But then another fundamental law, the law of framing all one's drives as moral and beneffective comes into play the papers
and the books are useful, after all.
An interesting article. However, I think that the only thing we have to know about how illogical psychiatry is this:
In 1973, the American Psychiatric Association (APA) asked all members attending its convention to vote on whether they believed
homosexuality to be a mental disorder. 5,854 psychiatrists voted to remove homosexuality from the DSM, and 3,810 to retain
it.
The APA then compromised, removing homosexuality from the DSM but replacing it, in effect, with "sexual orientation disturbance"
for people "in conflict with" their sexual orientation. Not until 1987 did homosexuality completely fall out of the DSM.
The article makes no mention of the fact that no "new science" was brought to support the resolution.
It appears that the psychiatrists were voting based on feelings rather than science. Since that time, the now 50+ genders have
been accepted as "normal" by the APA. My family has had members in multiple generations suffering from mental illness. None were
"cured". I know others with the same circumstances.
How does one conclude that being repulsed by the prime directive of every
living organism – reproduce yourself – is "normal"? That is not to say these people are horrible or evil, just not normal. How
can someone, who thinks (s)he is a cat be mentally ill, but a grown man thinking he is a female child is not?
Long ago a lawyer acquaintance, referring to a specific judge, told me that the judge seemed to "make shit up as he was going
along". I have long held psychiatry fits that statement very well.
Thank you for this article. I find the information about the interpretation of statistical data very interesting. My take on the
background of the article is this:
Here we have a real scientist fighting the nonsense spreading from (neoclassical) economics into other realms of science/academia.
Behavioral economics is a sideline by-product of neoclassical micro-economic theory. It tries to cope with experimental
data that is inconsistent with that theory.
Everything in neoclassical economics is a travesty. "Rational choice theory" and its application in "micro economics" is
false from the ground up. It basically assumes that people are gobbling up resources without plan, meaning or relevant circumstances.
Neoclassical micro economic theory is so false and illogical that I would not know where to start in a comment, so I should like
to refer to a whole book about it:
Keen, Steve: "Debunking economics".
As the theory is totally wrong it is really not surprising that countless experiments show that people do not behave the
way neoclassical theory predicts. How do economists react to this? Of course they assume that people are "irrational" because
they do not behave according to their studied theory. (Why would you ever change your basic theory because of some tedious facts?)
We live in a strange world in which such people have control over university faculties, journals, famous prizes. But at least
we have some scientists who defend their area of knowledge against the spreading nonsense produced by economists.
The title of the 1st ed. of Keen's book was "Debunking Economics: The Naked Emperor of the Social Sciences" which was simply
a perfect title.
Once declared by The New York Times to be,
"the most important intellectual alive," a quote it surely regrets, prolific gadfly Noam
Chomsky has said that, "Any dictator would admire the uniformity and obedience of the U.S.
media." How true. However, the same dictator might find the sloppy, often incoherent work of
that uniform press to be a problem in need of a solution, especially at a time when it finds
itself assaulted on all sides by alternative media. The mainstream finds itself desperately
waging rearguard actions as it stumbles beyond the shadow of respectability. As it retreats
into a shell of reactionary conformity, the mainstream has become a parody of itself. Once, its
propaganda was well-crafted and replete with nuance and high-quality dissimulation, such that
the average American reader could be duped regardless of his or her preconceived notions.
That is no longer the case. The demise of authority in the mainstream is thanks largely to
the relentless round-the-clock news cycle and a deep bias in favor of sound bytes and
sensationalism. How ironic that the collapse of faith in western media is caused by its own
relentless fealty to profitability. The corporate press has now become, for vast segments of
the population, a transparently deceitful congeries of second-rate pseudo-journalists who
traffic in base fictions at the behest of elite capital. Meanwhile, ranks of first-rate
independent journalists now dot the coarse hide of the staggering beast of the mainstream, more
woodpeckers than parasites, slowly penetrating the dense carapace of falsehood that coarsens
the consciousness of western citizenry. Only relentless infusions of capital are keeping the
beast alive. Quantitative easing for the propaganda class.
If you want a nice index of the abysmal depths to which modern political discourse has sunk,
there are dozens of pristine examples on YouTube. In fact, the site is in some sense a
junk-strewn wasteland of western cultural debris, each piece of trash boasting thousands of
views. I recently watched an episode of the BBC's, "The Daily Politics",
now mercifully discontinued after 15 years of spreading disinformation disguised as "in depth"
coverage of political events. Last July, just before being shuttered for good,, the show hosted
the communist Aaron Bastani. (Perhaps this was another effort to align Labour's Jeremy Corbyn
with the fraudulent effigies of Stalin and Mao.)
This show is a particularly good example of what happens when a freethinker is for some
reason permitted time on a mainstream network and utters viewpoints that are well outside the
Overton Window of acceptable opinion. The airing of such thinkers is not, as most suspect, an
example of an open press, but rather a calculated effort to censor unacceptable ideas. On a
psychological level, it serves the same purpose of unifying the herd as burning witches did in
the medieval epoch. There is some sort of malign catharsis in communal attacks on ideological
enemies. Just look at the vicious historical Hindu violence against minority Muslims in India.
Communalism, they call it. In any event, this collection of pseudo-journalists, arrayed around
a table in comfortable chairs, was an especially nice representation of the idiocy of our
current political dialogue. Four neoliberals had to be brought on to collectively mock,
browbeat, and quiz the good-natured YouTube host
of "The Bastani Factor" on his bizarre communist politics.
Theater of the Absurd
The stage is set by show producers when they cast a giant image of a yellow hammer and
sickle against a vast background of red (gulag blood, no doubt). This farcical backdrop covers
half the set. The "guest" Bastani is first mocked for handing out a t-shirt that says, "I'm
literally a communist." Then he is asked by moderator Jo Coburn, a haughty establishment tool
with a penchant for constant interruptions, whether or not Bastani is simply whitewashing "a
murderous ideology."
After Bastani finishes describing communism for the panel, Laura Hughes of the highly
esteemed Financial Times declares that she felt like she'd just sat through her high
school history class all over again, and that what was really needed was, "a new word" other
than communism, since the latter was obviously so freighted with capitalist propaganda (she
didn't exactly say that). Political pundit and Tory Matthew Parris then jumps in to say he's
perfectly comfortable with the current word, and that Marx was perfectly clear about what he
meant by it. Hughes gazes at Parris, nodding with a condescending smile, before Coburn leaps in
to ask again about the supposedly nine million slaughtered at the hands of Stalin's purges,
gulags, and induced famines. Parris laughs uncomfortably and defensively remarks, "Well, I'm
not a communist!" But the bloodthirsty Coburn isn't satisfied. Is understanding communism
not, in effect, trivializing its crimes? Parris then confirms for all and sundry that the
practice of communism will most certainly require mass slaughter.
Coburn jumps back to Bastani, asking whether it requires violence. Rather than say it
requires the seizure of property from the ruling class, and that this act might inspire violent
resistance, as it did from the kulaks following the Bolshevik revolution, Bastani attempts to
smooth it all over with an anecdote from the 14th century, which appeases no one and distracts
everyone. Here another conservative journalist, Suzanne Evans, declares, in reference to the
disturbing t-shirt, to say, "I'm literally a communist" is tantamount to saying, "I'm literally
a fascist." Hughes bounces up and down in her chair and reminds the panel that communism
"didn't work!" She then reiterates her call for "a new word." Someone then asks whether Labour
leader Jeremy Corbyn would wear Bastani's communist t-shirt, prompting Bastani to point out
that Corbyn isn't actually a communist. Evans smugly replies, "He's 90 percent a communist" (to
guffaws in the gallery).
Parris has by this point recovered from the dreadful insinuation that he was a tankie. He
then announces that one of the main problems with communism, aside from the mass slaughter, is
that it still has a "student Che Guevara mystique about it." This insight is met with knowing
nods and throaty growls from the panel. He then bafflingly adds that free marketers (like
himself) "haven't been robust enough in defending what we believe in." Bastani might have noted
that a century of nonstop laissez faire propaganda from the business press should surely
have squelched a few noisy gangs of undergrads in Che t-shirts. Alas, the show then dribbled to
a close, everyone declining the offer of the t-shirt as though it were smallpox-infested
blanket from colonial times.
The comments section beneath the YouTube video was largely sympathetic to Bastani, but in
places typically descended into an intra-communist debate about what communism actually is,
with one ideologue insisting that, "The USSR was not remotely Marxist!" Several naysayers
chimed in with the usual boilerplate about how everything we enjoy today is a product of
capitalism and how capitalism is "by far" the best system ever conceived for human prosperity,
etc. As usual, the capitalists take credit for everything except the death toll.
Punching Back
Unfortunately, this is garden variety stuff on mainstream television. One hardly utters a
non-mainstream perspective before opposition pundits have their hackles up and are firing off
stock phrases about the glories of the free market. There are numberless responses to this kind
of commercial pablum, of which a handful come to mind.
First, no one is saying capitalism isn't a great engine of material production. Even Marx
praised it on that count. But we should never tire of pointing out that capitalism isn't about
markets; it's the division of resources between capital and labor, the latter of which get
brutally exploited by the former. As for markets, there were plenty of slave markets in the
ancient world, and plenty of markets under feudalism, and there have been plenty of markets in
socialist economies. Second, the numerous social advances made in the US were made in
spite of capitalism, not because of it. It's not as though the franchise, the eight-hour work
day, or the social safety net were commodities distributed by profit-seeking capitalists in
some magically humane laissez faire agora.
Third, the Soviet Union was a demonstrable success, achieving some remarkable industrial
gains during just the Thirties alone, before western jackals watched while the Nazi
Wehrmacht rolled into Russia, and was finally unraveled by pro-western factions within
the Soviet state. The German Democratic Republic is another example of a profoundly different,
and generally more humane, kind of social organization, that is continuously given the short
shrift by ideologues hurling their "Stasi state" jibes into the bristling ether of social
media. Fourth, we'd have never even begun to exit the Great Recession of 2008 without China's
command economy, with its various socialist aims and government controlled production.
Fifth, no one bothers to investigate the propaganda surrounding communism, referred to in
this awful BBC show
as a "murderous ideology". The purge and gulag and famine death figures were popularly
disseminated largely by Robert Conquest, a British propagandist, and are suspect at best, and
at worst fraudulent. The majority of the left won't even go there for fear of crossing the
threshold into pariah status, and being thrust into that burgeoning cultural pen of actual
socialists and communists. Sixth, there are thought to be
some 20 million people since the end of WWII who have died at the hands of imperial
capitalism, and its unquenchable thirst for new markets. Those figures are not likely to be
falsified, at least partially because they are not the product of a ferociously anti-Communist
propaganda system, but rather independent alternative journalists without a bourgeois mandate
to romanticize neoliberalism and demonize communism. Nor are those numbers likely to stall; the
implacable drive for hegemony promises much more slaughter, with many more million brown men,
women, and children adding to the figures, plenty of them doubtless LGBTQ+ and trans. Seventh,
India, for instance, is hardly better off than it was before the capitalist invasion by
Britain. Same goes for the Congo or anyplace else capital has reached for market access. Life
in the metropole is considerably different than life in the ransacked provinces.
Eighth, when you argue for the current system, you're arguing for a capitalist oligarchy in
which 1 percent of humanity controls more than half the world's wealth, and 30 percent control
95 percent of the wealth, leaving 70 percent of the world's population to support itself on 5
percent of the world's resources, access to which are nevertheless being hotly contested by
capital. Ninth, recent studies have shown marked rises in suicides as neoliberal austerity
takes hold in the metropole itself, while hundreds of thousands of Indian farmers have taken
their own lives thanks to neoliberal structural reforms in a story that provoked meager
interest in western capitals. Tenth, it's been conclusively shown that we are heading into the
sixth mass extinction event in history, produced by capitalist industrialization. Yet almost
all of us are in denial, either as Republicans hastily summoning their liberal conspiracy
talking points, or as neoliberal Democrats who still cling to the meager thread of the Obama
era and the Paris Accords, as if Obama and Paris were really going to address climate change
the way it needs to be addressed.
Alas, these responses might have short-circuited the hive mind of the BBC panel. Facts,
hurled into a pandemonium of deceits, can have that effect. Of course, Bastani was shuttled
away before any of these considerations were tabled, the benighted doxies of imperialism happy
to have had another go at the far left before decamping for their next bourgeois dinner party,
anxious to don their own 'most important intellectual' attire and regale placid peers of the
intelligentsia with tales of ideology run amuck.
Jason Hirthler is a writer, political commentator, and veteran of the communications
industry. He has written for many political communities. He is the recent author of Imperial Fictions, a collection of essays from between 2015-2017. He lives in
New York City and can be reached at[email protected] . Read other articles by Jason .
The politics of economic growth are complex and contested as never before. In rich
countries, rates of GDP growth have declined, decade after decade since the 1960s. The 2008
crash was deep, and the post-crisis recovery has been slow. This poses problems for
governments, given that their 'performance legitimacy' requires some degree of popular approval
of their perceived success in charting a growth path that satisfies the citizenry's demand for
goods and services. Where growth is low and governments choose to respond with austerity
programmes, these bring additional misery and hardship -- including tens of thousands of
premature deaths
in Britain alone .
In the same decades, growth scepticism has thrived. It takes two main forms: one highlights
the impact of infinite growth on finite resources and on the natural environment. Recognition
of the dangers of climate breakdown has transformed this debate – while mainstream
opinion retains the traditional faith in growth, now refashioned as ' green growth ', the heretics are
rallying to ' degrowth '.
The other emphasises the disconnect between growth and social well-being. The days are long
gone when growth was seen as the fast track to general prosperity, as normal and natural as
sunrise. It is well established that the
relationship between growth and well-being is partial at best. Such a correlation does exist,
but weakens after a certain point -- roughly speaking when per capita GDP exceeds $15,000. At
higher levels, the translation of growth into improvements in health and well-being is tenuous.
Other variables, notably levels of equality, are critical.
In combination, these developments have motivated the '
Beyond GDP ' agenda. Whether for reasons of growth scepticism or out of concern that if GDP
growth remains slack governments' performance legitimacy will suffer too, political leaders,
civil servants and academics -- among them
Nicolas Sarkozy , Jacinda Ardern ,
Gus O'Donnell , Joseph Stiglitz and Amartya Sen -- are promoting alternative
yardsticks.
To assess these debates it helps to dig into the history and morphology of the 'growth
paradigm' -- the belief that economic growth is good, imperative, essentially limitless, and
the principal remedy for a litany of social problems – and ask the following: when and
how did this paradigm originate?
From Rain Dance to Nasdaq
One response was offered in 1960 by Elias Canetti. In
quasi-Nietzschean vein, he invoked a transhistorical 'will to grow'. Humans are always striving
for more . Whether the parent monitoring her child's weight or the state official
seeking to augment her power, or the community expanding its population, we all want growth.
The desire to accumulate goods, the drive for economic growth, the wish for prosperity –
they are all innate to human social being. Humans in groups are driven to seek increase: of
their numbers, of the conditions of production, and of the products they require and desire.
The very earliest homo sapiens sought the enlargement of their "own horde through a plentiful
supply of children." And later, in the age of modern industrial production, the growth drive
came into its own.
"If there is now one faith, it is faith in production, the modern frenzy of increase; and
all the peoples of the world are succumbing to it one after the other. Every factory is a unit
serving the same cult. What is new is the acceleration of the process. What in former days was
generation and increase of expectancy, directed towards rain or corn, has today become
production itself." A straight line runs from the rain dance to the Nasdaq.
But this is to confuse the wiring of our current economy with the wiring of the human brain.
Canetti's 'will to grow' doesn't withstand scrutiny. The diverse behaviours he describes can't
be reduced to a single logic. The 'will' behind creating babies is quite unlike the will to
accumulate acreage or gold. And the latter is relatively recent. For much of the human story,
societies were nomadic or semi-nomadic, and organised in immediate-return systems .
Stashes of food were set aside to tide the group over for days or weeks, but long-term storage
was impractical. The accumulation of possessions would hamper mobility. The measures that such
societies used to reduce the risks of scarcity centred not on accumulating stores of goods but
on knowledge of the environment, and interpersonal relationships (borrowing, sharing, and so
on). The moral economy of sharing necessitates a muscular egalitarianism that is undermined by
the accumulation of property.
Logics of accumulation -- and, in the loosest sense, growth -- were not initiated until the
Neolithic revolution. Its technological and institutional transformations included settled
agriculture and storage, class division, states, warfare and territoriality, and, later, the
invention of money. Population growth joined with class exploitation and interstate competition
to expand the sway of agrarian empires. Farmers enlarged the ploughlands, scholars penned
proposals for improving the organisation of agriculture or trade, merchants amassed wealth, and
rulers, seeking to enlarge population and tribute, extended their domains. Only now -- in the
post-Neolithic age -- did gold achieve its
fetish quality as the source and symbol of power.
Scour the documents from ancient civilisations and you'll find tales of competition for
territory and the accumulation of property, but nothing that resembles the modern growth
paradigm. No conception of 'an economy' that can grow, still less of one that tends to the
infinite. And you'll find little, if any, notion of linear historical progress. Instead,
cyclical cosmologies prevailed. A partial exception is the fourteenth century polymath,
Ibn
Khaldun . He developed a sophisticated analysis of growth dynamics. But his ideas weren't
widely adopted, and his theory is cyclical: it describes negative feedback mechanisms that
ensure any economic upticks will necessarily hit barriers and retreat.
When, then, did the modern growth paradigm originate -- and why?
Petty's Arithmetic
The evolution of the growth paradigm was integrally connected to the capitalist system and
its colonial thrusts. The basic link between the growth drive and capitalism is transparent.
The latter is a system of competitive accumulation. The former, in suggesting that the system
is natural and brings benefit also to the '99%', provides ideological cover in that growth
serves as an idealised and democratised redescription of capital accumulation. But there's more
to it than that. The capitalist transition was to a system of generalised commodity production,
in which formal 'productive' economic activity takes the shape of commodities interacting
through the price mechanism, in a regularised manner. If earlier political-economic thought had
construed its subject as the affairs of the royal household, during the capitalist transition a
new model emerged, with an interconnected market field posited as essentially outside the
state.
In seventeenth-century England, just as the universe was being re-imagined by Newton et al
as a machine determined by lawful regularities, the idea that economic
behaviour follows natural laws became commonplace. By the close of the following century,
Richard Cantillon had presented the market system as self-equilibrating, a machine that
functions in a law-like manner; Quesnay's Tableau had depicted the economic system as a
unified process of reproduction; Adam Smith had theorised the dynamics of economic growth; and
philosophers (such as William Paley) had developed the creed that steady
economic growth legitimates the social system and renders system-critical demands
unnecessary and dangerous.
The same centuries experienced a revolution in statistics. In the England of 1600, the
growth paradigm could scarcely have existed. No one knew the nation's income, or even its
territory or population. By 1700
all these had been calculated , at least in some rough measure, and as new data arrived
England's 'material progress' could be charted. Simultaneously, the usage of 'growth' had
extended from the natural and concrete toward abstract phenomena: the growth of England's
colonies in Virginia and Barbados, the ' growth
of trade ,' and suchlike.
But the capitalist transition revolutionised much more than the formal economy and economic
concepts. As land came to be regarded as a commodity-like object, the idea -- found to some
degree in antiquity -- that nature exists to serve the purposes of landowners and is
fundamentally external to human beings, gained definition. The early-modern regimes of
abstract social labour
and
abstract social nature (i.e. the constitution of labour and nature as commodities) were
sustained by the scientific revolution, and also by the construction of capitalist time .
Over centuries, time became flattened into an abstract, infinite and divisible continuum, one
that permitted economic life to be re-imagined as subject to continuous
growth and cultivation . Morality was upended, too, most significantly in the discarding of
the age-old proscriptions against acquisitiveness.
The more that economic activity came to be marshalled behind the imperatives of capital
accumulation, the more it became subject to regimes of 'improvement' and quantification. In
Jacobean and Cromwellian England, these practices and discourses proliferated.
Agrarian-capitalist improvement was fuelled by scientific discoveries. These, in turn, were
spurred on by the navigational and martial demands of explorers, freebooters and conquerors.
European settlers in the New World not only exterminated and subjugated 'new' peoples, but
turned to objectifying and cataloguing them, drawing comparisons with their own kind and
'improving' them. 'Improvement' and its theologically-intoxicated transplantation to colonial
locations generated new data and new demands for detailed knowledge. How profitable is this
tract of land, and its denizens? How can
they be made more profitable ? Answering such questions was enabled by modern accounting
techniques, with their sharper definition of such abstractions as profit and capital.
No surprise, then, that the first statistically rigorous accounting of the wealth of a
country (as distinct from, say, a royal household) was conducted by a capitalist on a
colonial mission . William Petty planted quantification at the heart of scientific
economics, crafted to the purposes of English merchants and empire, and gaining ideological
force from the sheen of objectivity with which economic statistics -- or 'political arithmetic'
as he termed it -- comes coated. In his work the conquest of nature and the idea of nature as a
machine, and of the economy as a productive engine, blended to produce a new concept of wealth
as " resources and the productive power
to harness them " in contrast to the mercantilist concept, centred on the accumulation of
bullion.
Colonisation of the New World contributed powerfully to capital accumulation in Western
Europe, but it also spurred Europe's philosophers to elaborate a racialised progress ideology .
The question of what to make of the peoples encountered in the Americas, and what implications
followed from their property arrangements, stimulated a new reading of the human story: a
narrative of social progress. From the vantage point of the colonialists, if 'they' were at the
primitive stage, had 'we' once occupied it too?
Centred on a mythical ladder that climbs up from barbarism to civilisation, the progress
idea hammered the diversity of human populations into a single temporal-economic chain .
By indexing the richer and higher-tech nations (and 'races') as history's vanguard, it
justified their bossing of the rest. It was a manifesto that drummed out capital's rhythms, and
later found new forms as ' modernisation theory ,' 'the development project,'
and so forth, articulated through a grammar of 'growth.' Through its marriage to progress and
development, in the belief that social advance requires a steady upward ratchet in national
income, growth gained its ideological heft.
The Globalisation of an Ideology
In the nineteenth and twentieth centuries, the consolidation and globalisation of capitalist
relations was accompanied by the growth paradigm. The first half of the twentieth century saw
its definition sharpen. A pronounced shift occurred from a rather vague sense -- long prevalent
-- that government should preside over economic 'improvement' and 'material progress' to an
urgent conviction that promoting growth is a matter of national priority. Factors behind the
shift included intensified geopolitical rivalry, and the increasing 'muscularity' of states,
with their expanded bureaucratic apparatuses, surveillance systems and welfare provision, as
well as the segue from the age of empires to that
of nation states , a shift that helped consolidate the discourse of the 'national economy.'
In many countries the expansion of suffrage was an additional factor: rights were extended and
an infrastructure and ideology of national belonging was constructed with the aim of
incorporating the lower orders as citizens into the body politic. With the Great Depression,
restoring growth became an urgent project of states, and provided the context for the national
income accounting that eventually led to GDP.
The acme of the growth paradigm was reached in the mid twentieth century. Growth was firmly
established everywhere: in the state-capitalist economies of the 'Second World,' the market
economies of the West, and the postcolonial world too. It became part of the economic-cultural
furniture, and played a decisive part in binding 'civil society' into capitalist hegemonic
structures -- with social democratic parties and trade unions crucial binding agents. It came
to be seen as the key metric of national progress and as a magic wand to achieve all sorts of
goals: to abolish the danger of returning to depression, to sweeten class antagonisms, to
reduce the gap between 'developed' and 'developing' countries, to carve a path to international
recognition, and so on. There was a military angle too. For the Cold War rivals, growth
promised geopolitical success. "If we lack a first-rate growing economy," cautioned JFK on the
campaign trail, "
we cannot maintain a first-rate defense ." The greater the rate of growth, it was
universally supposed, the lesser the economic, social and political challenges, and the more
secure the regime.
The growth paradigm, I suggest, is a form of fetishistic consciousness. It functions as
commodity fetishism at one remove. Growth, although the result of social relations among
people, assumes the veneer of objective necessity. The growth paradigm elides the exploitative
process of accumulation, portraying it instead as a process in the general interest. As
Mike Kidron and Elana
Gluckstein note, as a system of competition "capitalism depends on the growth of capital;
as a class system it depends on obscuring the sources of that growth."
For a long time, GDP growth was widely assumed to be the route to prosperity. Since then,
cracks have appeared. In the rich world, we are beginning to realise that continuous GDP growth
leads not simply to wealth and wellbeing, but to environmental collapse and barbecued
grandchildren. But growth is not its own cause. GDP mirrors the power structure and form of
value of capitalist society, but it doesn't define the system's core goal. That goal is the
competitive accumulation of capital, and the accounting principles that guide it are those at
the level of the firm, not the state. Put differently, the relentless increase in global
resource throughput and environmental despoliation is not principally the result of states
aspiring to a metric – higher GDP – but of industrial and financial firms, driven
by market competition to expand turnover, develop new products, and increase profits and
interest.
If the above analysis is correct, insofar as critical debates on growth focus solely on GDP
while being coy about capital, they are enacting a form of displacement .
In writing a dissertation in 2014 I read Alchian's theory of the firm where he said
cooperation is what fosters a peaceful condition for growth to occur, where as competition
does the opposite. I've lived by that idea since, at least for us here in Lagos we have a
chance to build a more cooperative and less competitive society
If we were actually pursuing growth things would be a lot better.
The current goal is making money (capital accumulation).
What is this GDP thing anyway?
In the 1930s, they pondered over where all that wealth had gone to in 1929 and realised
inflating asset prices doesn't create real wealth, they came up with the GDP measure to track
real wealth creation in the economy.
The transfer of existing assets, like stocks and real estate, doesn't create real wealth
and therefore does not add to GDP. The real wealth creation in the economy is measured by
GDP.
Inflated asset prices aren't real wealth, and this can disappear almost over-night, as it
did in 1929 and 2008.
The economics of globalisation precedes the GDP measure when they thought inflating asset
prices created real wealth.
Real wealth creation involves real work, producing new goods and services in the
economy.
We need an economics that focuses on GDP to grow GDP.
Neoclassical economics makes you think you are creating real wealth by inflating asset
prices and we have been faffing about doing that.
The new scientific economics of globalisation = 1920's neoclassical economics with some
complex maths on top.
" Distinctions must be kept in mind between quantity and quality of growth, between its
costs and return, and between the short and the long term. Goals for more growth should
specify more growth of what and for what "
This is not by me, but by the creator of the GDP formula, Simon Kuznets. GDP is a very
poor indicator for many reasons, even apart from those mentioned above. Borrowing money and
squandering it adds to GDP while the resulting debt is ignored. Extracting and burning fossil
fuels adds to GDP while the future depletion is ignored. Stripmining and deforesting nature
adds to GDP while you get my drift. To paraphrase Bastiat, the growth in GDP that is seen
tends to mask decline in areas like nature and wellbeing that are not seen.
It is tragic to see politicians and pundits thoughtlessly raving about a few tenths of a
percent change in GDP while never seeming to realize how poorly this represents things that
are really important to humanity.
When will people stop worshipping at the GDP altar?
Wonderful!
BrainyQuote attributes it ("Growth for the sake of growth is the ideology of the cancer
cell.") to Edward Abbey, who also came out with "Society is like a stew. If you don't stir it
up every once in a while then a layer of scum floats to the top."
Thank you.
"Anyone who believes exponential growth can go on forever in a finite world is either a
madman or an economist."
"Attributed to Kenneth Boulding in: United States. Congress. House (1973) Energy
reorganization act of 1973: Hearings, Ninety-third Congress, first session, on H.R. 11510. p.
248"
Where the author says 'For much of the human story, societies were nomadic or
semi-nomadic, and organized in immediate-return systems.' that is not entirely true that.
Here I am thinking of the early Bantu in their expansion in Africa. Their wealth for them
were in their cattle herds which being mobile, made possible the expansion of the Bantu down
eastern Africa and into Southern Africa. These were long-term investments and Bantu society
evolved to take care of these herds as they expanded. Your wealth in that society was in how
many cattle you had.
I suppose when you think about it, the paradigm of growth works – to an extent –
when there are more lands to discover, more continents to be opened up, more frontiers to be
discovered. But all of that ran out a century ago and so with no more new resources to be
found to be exploited, we have now reached the point where where we have come up hard against
the natural limits of this planet. And yet, our economies still use the same mode of
operating when we lived in an ever-expanding world. We are far beyond the point where we
should have evolved into a closed-loop economy.
More than that. For example. A young man could only really use cattle to be the dowry that
he would need to attract a bride so cattle was a sign of his wealth. The status came with it.
Cattle shaped their society immensely. Their villages were huge rings where the cattle would
be locked in of a night and were called kraals. The people were so familiar with their cattle
that a herdsman at a glance of a herd of several hundred cattle would be able to tell
straight away if one were missing. It was a fascinating society.
The statement "For much of the human story, societies were nomadic or semi-nomadic, and
organized in immediate-return systems" is absolutely true. Please see the book "Limited
Wants, Unlimited Means" for a good primer. It includes an excerpt from Marshall Sahlins' "The
Original Affluent Society" – a great introduction to hunter-gatherer societies. There
is also a wonderful comparison of immediate return and delayed return societies as
exemplified in the Hadza people, and the problems that arise once an immediate return society
begins to settle, even minimally.
The Bantu evolved later and are agro-pastoralists, not foragers. The Hadza have persisted
as foragers even after contact with the Bantu and other groups. They have also repeatedly
resisted government and missionary efforts to introduce farming and Christianity. The Hadza
are perhaps the best example of how human beings lived on earth for over 99% of our
existence, that being in a largely cooperative, egalitarian manner, devoid of concepts such
as wealth.
Bantu people were not cattle herders, west central and much of Southern Africa is
basically forest, there's no way in this world anyone could move herds this way; it's our
northern brothers and sisters that are cattle herders. That being said, culturally we (Bantu)
generally moved to set up new families/villages that's how we spread not through some farming
technique, that's false
When I comment with someone, my wife for instance, about the need to get rid of GDP growth
as the main political objective and think of small well being objectives I tipically receive
commiseration in their eyes: "Yes Nacho, you are right, go and rest for a while"
As usual, scale is ignored. In my (still living) 94 year old mother's lifetime, human
population quadrupled. In large mammals, this is sometimes called "plague phase." Add a
(minimally) tenfold increase in technological leverage in converting finite resources into
infrastructure, food, transportation, consumable goods and services, and the increasingly
rapid decline of the ecosphere is hardly a surprise. Dematerialization of the economy is a
myth! And don't expect money printing or cyber tokens as solutions. They are simply power
tools to access real stuff.
One of the drivers of growth in the UK in the late 18th century that was missing, was
money. It reached a crisis stage in 1797.
A chronic shortage of coins, silver specie in particular.
Then, the freebooters came to the rescue!
Silver 8 Reales coins plundered from the Spanish were reworked into being coins of the
British realm & many other outposts in the colonies.
The first effort was pretty weak, all that was done was they were counterstamped with a
small portrait of King George III upon the countenance of King Charles IIII, which led to
this ditty:
"In order to enable the Spanish Dollar to pass, the head of a fool was struck on the neck
of an ass."
A couple of drivers of growth showed up both around the same time, the Haber Bosch process
that allowed for pretty much unlimited food resources, and worldwide fiat money, which also
had no limits to production.
We've quadrupled the world's population since these 2 events.
The Haber-Bosch process allowed for a vast, but in no way unlimited, expansion of
production.
Fiat money can be produced in unlimited amounts, but, according to both common sense and MMT,
actual production also has actual limits.
Setting the world free from first gold and then silver restraints (the last silver coins
issued for circulation in the 1st world was in 1969) allowed for a as much as you'd like fiat
economy, beyond limits and also risk. (for now, that is)
For what it's worth, there has never been an instance of hyperinflation in the cyber money
age.
As much wood, steel and cement, or as many doctors, teachers and entertainers as you'd
like, without limits, just because money can be printed without limits?
It's a fundamental issue: money is an abstraction that can increase without limits; the
real world, the real economy, is not. MMT does address that, but I think it's a root source
of the persistent inflation that plagued the economy until rather recently. Apparently the
Fed, or somebody, can stop it if they wish. However, I think that that history is one reason
for the resistance to MMT – it sounds like a formula for more inflation. Since it
hasn't actually been tried as a policy (the Pentagon's limitless funds are really just
corruption), we won't know for sure until it's tried. There always seems to be a lot that the
economists don't know or won't admit.
Politicians don't have the analytical tools to pick apart the "constant growth" argument
so they default to trumpeting it as a cure for all social ills (no doubt with encouragement
from mainstream economists). On the other end of the spectrum, the growth story seduces
ordinary people because they're told their share of the spoils, courtesy of the trickling
down effect, will lead them to a "better life". As such, nothing short of a massive
ideological decolonization effort is needed to strip growth of the superhero status it enjoys
in contemporary economic discourse.
The only positive hope is that enough people take it upon themselves to rise to the
occasion. People who have freed themselves from the tyranny of the current economic system
need to be examples for others to follow. Those that can, must change their lifestyles. They
indirectly become leaders by example.
There is a spiritual component in this transformation that has not really surfaced yet,
but feels like it is stirring under the surface. There is so much denial going on that
something will burst forth. What form that takes is anyones guess, but most people are just
looking for leadership when pressed.
Instead of the neoliberal message of selfish pursuits lead to a better life, the message
of self-sacrifice and service to something greater resonates with most people. Instead of
being just lip-service or propaganda, this sentiment must be channeled into concrete policies
and actions- beginning with oneself.
Underlying all this is the need for peace. The Big Lie of growth pales in comparison to
the Big Lie of perpetual war. Both lies reinforce each other.
How to explain the conflict between capitalists and well, all the rest, other than a
spiritual war. Where does one place ones faith? Violent and selfish Nationalism will not
suffice.
Strength in humility instead of conquest is the dividing line. The decolonization of the
human mind must be followed by an awareness and consciousness that the world is here to live
in, not conquer. That is an enormous shift in human action and consciousness- those that live
this ideal must be valued and emulated.
The growth paradigm, I suggest, is a form of fetishistic consciousness.
Elsewhere today Lambert talks about religion as Marx's "opiate of the people" but there
are many versions of that drug and our secular overlords seem to have replaced the Bible with
other unquestioned assumptions, many of them economic. Perhaps at some point rationality has
its limits and illusions of some kind of are necessary to make the engine go. The problem
unfortunately is that the current engineers seem to believe those illusions themselves and
follow them blindly. They are addicts too. Is it time to "just say no"?
Good essay. The author gets the the heart of it with this –
The evolution of the growth paradigm was integrally connected to the capitalist system
and its colonial thrusts. The basic link between the growth drive and capitalism is
transparent. The latter is a system of competitive accumulation. The former, in suggesting
that the system is natural and brings benefit also to the '99%', provides ideological cover
in that growth serves as an idealised and democratised redescription of capital
accumulation.
– where the theory of growth is an attempt to rationalize the greed of the few who
really like playing capitalist at the expense of everyone else. How about they get their
jollies playing Monopoly and leave the rest of us alone?
I'll just leave this here, a beautiful tune by one of my favorite bands, Old Crow Medicine
Show. Four minutes that will make you feel better after reading of all the nastiness in the
world, and very apropos to this article –
is an attempt to rationalize the greed of the few who really like playing capitalist at
the expense of everyone else.
As noxious as their displays of wealth are, and as much as it's possible to make a case
that pathological narcissism infuses the system, the motive to accumulate to compete with
rivals, current and future, is central. It's politically useful to attack the way that this
motive draws others into its van, i.e. to make them personally despicable. But it might be
worthwhile to consider how much the accumulation motive is embodied as a kind of social
contract in the firm's organization. I imagine that individual capitalists say to themselves
"I've made my pile, time to sail away in my yacht," but the firm and those who will stay on
want to keep things going.
. The moral economy of sharing necessitates a muscular egalitarianism that is
undermined by the accumulation of property.
this really stuck out to me.
and I can't really identify why, however I couldn't stop thinking about the growing
proliferation of plastic while reading the article
Back in the early 80s, the professor for whom I was a grad assistant frequently urged me
to read Canetti's "Crowds and Power." It's a powerful and useful book. Well-written and
accessible and full of thought-provoking ideas. I'd recommend it for anyone who wants to
ponder social relations.
In this case, Dale seems to use Canetti's book as a kind of straw-man entry to his real
topic:an intro to his discussion of growth/degrowth. I guess you gotta start somewhere? Maybe
he should have simply directly referenced Canetti on his notion of "feast crowds" (pg 62 of
my edition of Crowds and Power.)
The above comments by Sound of the Suburbs and Joe Oskam are incisive, imo. The essence of
the matter boils down to developing a more rigorous distinction (and understanding) of the
difference between productive economic activity and non-productive economic activity. Hudson
is really good on this.
Go back further and Gustave Le Bon's The Crowd from 1896 ages well, because human
motives don't change much
"The masses have never thirsted after truth. Whoever can supply them with illusions is
easily their master; whoever attempts to destroy their illusions is always their
victim."
"A crowd thinks in images, and the image itself calls up a series of other images,
having no logical connection with the first A crowd scarcely distinguishes between the
subjective and the objective. It accepts as real the images invoked in its mind, though
they most often have only a very distant relation with the observed facts .Crowds being
only capable of thinking in images are only to be impressed by images."
"We see, then, that the disappearance of the conscious personality, the predominance of
the unconscious personality, the turning by means of suggestion and contagion of feelings
and ideas in an identical direction, the tendency to immediately transform the suggested
ideas into acts; these, we see, are the principal characteristics of the individual forming
part of a crowd. He is no longer himself, but has become an automaton who has ceased to be
guided by his will."
As I read these quoted words it is hard not to think of the crowds that surround Trump on
his so-called "rallies" for his base. One cannot but help ask, Why is anyone listening to
this man? Ans: "He is no longer himself, but has become an automaton who has ceased to be
guided by his will."
What makes the masses the masses is that they are followers. This is a double edged sword
the elite exploit relentlessly- that is what makes them the elite. They hold the power, and
desire, to manipulate the masses through narrative and image. These stories and images make
the world and human experience comprehensible. When corruption sinks in, that whole group is
doomed to eventual failure if a self-correcting mechanism is not present. Leaders/elite and
masses both fail.
It is very self-serving for the elite to blame the masses when the "illusions" stop
working their magic. Have the elite ever "thirsted after truth" either? Truth meaning a
universal truth applicable to all, or the Truth embodied in a personal view as apposed to a
public view? Such Truths tend to obfuscate the drive for personal power, which doesn't sit
well within groups of people let alone groups of differing cultural or ethnic
experiences.
Manipulation of the masses is not the problem, it is manipulation to what end that is the
issue. In that respect, the elite leadership should take more responsibility and bear a
greater portion of blame for failure- for in fact, they are driving the whole process.
In a nutshell, this is the failure of the current human situation. A greedy elite
incapable or unwilling to use the powers at hand to bring about a fair and equatable world.
It is just too easy for them to continue their deceitful manipulations and blame hapless or
trusting victims.
Another way is for the elite leadership to listen to the people/masses and take their
needs and desires into account when molding public opinion. Such an elite will foster the
population's wellbeing, not fear them or treat them as a mob. That process makes the elite
leadership legitimate.
The most stupid leadership is one that fails to change course when the images and
narratives moving its society are failing. The whole society becomes weak and ineffective on
multiple levels.
At some point, the factional fighting must stop. It seems inevitable that human society
will rebalance itself to manageable levels. The question becomes how violent that transition
will be.
LeBon writes of crowds as though there is a complete discontinuity between a person's
thought and behavior when they are in a crowd and when they are not. That's nonsense, a
cocktail party generalization. I've been in plenty of political crowds and the remarkable
transformation he purports was not evident. Le Bon was a rank conservative and his analysis
reflected his detestation of the French left, fueled by his experience of the Commune. He's
writing in a way that helps justify the massacres that concluded it.
I often wondered about this fetishisation of growth in GDP (I'm in my sixties now), when
in developed countries it seemed to have as many negatives as positives.
Then I realised that capital, in its most general sense, doesn't invest in the hope of
getting its money back, but in the hope of its money back plus some more . The only way that
can carry on for very long is through growth.
I'm not an economist, but that explanation really rang true for me.
Just Thank You. Thank You tons. I will remember the name Gareth Dale and The Ecologist.
And the reference to the (unexplained) runaway condition of human economics as "Capitalist
Time" v. (of course) real time. Because as we have learned here at NC "financial time goes
much faster than real time." And etc. This essay was wonderful, and now we have an outline of
why that is true.
"roughly speaking when per capita GDP exceeds $15,000. At higher levels, the translation
of growth into improvements in health and well-being is tenuous."
The implications of this statement are large, for it multiplies out to a US GDP of 330E6 x
15E3 = 4.95 Trillion or about ONE FOURTH of the current USA economic output (19.39 trillion
in 2017).
Forget the Green New Deal, shrink economic output by 3/4 in the USA while drastically
lowering inequality to share the shrunken economic pie and one should observe a large
positive effect on future climate change while having a reasonable USA citizen
well-being,.
"... From the 1980s to 2008, neoliberal politics and policies succeeded in expanding inequality around the world. The political climate Ayn Rand celebrated—the reign of brutal capitalism—intensified. Though Ayn Rand’s popularity took off in the 1940s, her reputation took a dive during the 1960s and ’70s. Then after her death in 1982, during the neoliberal administrations of Ronald Reagan in the United States and Margaret Thatcher in the United Kingdom, her star rose once more. (See chapter 4 for a full discussion of the rise of neoliberalism.) ..."
"... During the global economic crisis of 2008 it seemed that the neoliberal order might collapse. It lived on, however, in zombie form as discredited political policies and financial practices were restored. ..."
"... We are in the midst of a major global, political, economic, social, and cultural transition — but we don’t yet know which way we’re headed. The incoherence of the Trump administration is symptomatic of the confusion as politicians and business elites jockey with the Breitbart alt-right forces while conservative evangelical Christians pull strings. The unifying threads are meanness and greed, and the spirit of the whole hodgepodge is Ayn Rand. ..."
"... The current Trump administration is stuffed to the gills with Rand acolytes. Trump himself identifies with Fountainhead character Howard Roark; former secretary of state Rex Tillerson listed Adas Shrugged as his favorite book in a Scouting magazine feature; his replacement Mike Pompeo has been inspired by Rand since his youth. Ayn Rand’s influence is ascendant across broad swaths of our dominant political culture — including among public figures who see her as a key to the Zeitgeist, without having read a worth of her writing.’’ ..."
"... Rand biographer Jennifer Burns asserts simply that Ayn Rand's fiction is “the gateway drug” to right-wing politics in the United States — although her influence extends well beyond the right wing ..."
"... The resulting Randian sense of life might be called “optimistic cruelty.” Optimistic cruelty is the sense of life for the age of greed. ..."
"... The Fountainhead and especially Atlas Shrugged fabricate history and romanticize violence and domination in ways that reflect, reshape, and reproduce narratives of European superiority' and American virtue. ..."
"... It is not an accident that the novels’ fans, though gender mixed, are overwhelmingly white Americans of the professional, managerial, creative, and business classes." ..."
"... Does the pervasive cruelty of today's ruling classes shock you? Or, at least give you pause from time to time? Are you surprised by the fact that our elected leaders seem to despise people who struggle, people whose lives are not cushioned and shaped by inherited wealth, people who must work hard at many jobs in order to scrape by? If these or any of a number of other questions about the social proclivities of our contemporary ruling class detain you for just two seconds, this is the book for you. ..."
"... As Duggan makes clear, Rand's influence is not just that she offered a programmatic for unregulated capitalism, but that she offered an emotional template for "optimistic cruelty" that has extended far beyond its libertarian confines. Mean Girl is a fun, worthwhile read! ..."
"... Her work circulated endlessly in those circles of the Goldwater-ite right. I have changed over many years, and my own life experiences have led me to reject the casual cruelty and vicious supremacist bent of Rand's beliefs. ..."
"... In fact, though her views are deeply-seated, Rand is, at heart, a confidence artist, appealing only to narrow self-interest at the expense of the well-being of whole societies. ..."
Mean Girls, which was based on interviews with high school girls
conducted by Rosalind Wiseman for her 2002 book Queen Bees
and War/tubes, reflects the emotional atmosphere of the age of
the Plastics (as the most popular girls at Actional North Shore
High are called), as well as the era of Wall Street's Gordon Gekko,
whose motto is “Greed is Good.”1 The culture of greed is the
hallmark of the neoliberal era, the period beginning in the 1970s
when the protections of the U.S. and European welfare states,
and the autonomy of postcolonial states around the world, came
under attack. Advocates of neoliberalism worked to reshape global capitalism by freeing transnational corporations from
restrictive forms of state regulation, stripping away government
efforts to redistribute wealth and provide public services, and
emphasizing individual responsibility over social concern.
From
the 1980s to 2008, neoliberal politics and policies succeeded in
expanding inequality around the world. The political climate
Ayn Rand celebrated—the reign of brutal capitalism—intensified. Though Ayn Rand’s popularity took off in the 1940s, her
reputation took a dive during the 1960s and ’70s. Then after her
death in 1982, during the neoliberal administrations of Ronald
Reagan in the United States and Margaret Thatcher in the
United Kingdom, her star rose once more. (See chapter 4 for a
full discussion of the rise of neoliberalism.)
During the global economic crisis of 2008 it seemed that the
neoliberal order might collapse. It lived on, however, in zombie
form as discredited political policies and financial practices
were restored. But neoliberal capitalism has always been contested, and competing and conflicting political ideas and organizations proliferated and intensified after 2008 as well.
Protest
politics blossomed on the left with Occupy Wall Street, Black
Lives Matter, and opposition to the Dakota Access oil pipeline
at the Standing Rock Sioux reservation in the United States, and
with the Arab Spring, and other mobilizations around the world.
Anti-neoliberal electoral efforts, like the Bernie Sanders campaign for the U.S. presidency, generated excitement as well.
But
protest and organizing also expanded on the political right, with
reactionary populist, racial nationalist, and protofascist gains in
such countries as India, the Philippines, Russia, Hungary, and
the United States rapidly proliferating. Between these far-right
formations on the one side and persistent zombie neoliberalism
on the other, operating sometimes at odds and sometimes in
cahoots, the Season of Mean is truly upon us.
We are in the midst of a major global, political, economic,
social, and cultural transition — but we don’t yet know which
way we’re headed. The incoherence of the Trump administration is symptomatic of the confusion as politicians and business
elites jockey with the Breitbart alt-right forces while conservative evangelical Christians pull strings. The unifying threads
are meanness and greed, and the spirit of the whole hodgepodge
is Ayn Rand.
Rand’s ideas are not the key to her influence. Her writing does
support the corrosive capitalism at the heart of neoliberalism,
though few movers and shakers actually read any of her nonfiction. Her two blockbuster novels, 'The Fountainpen and Atlas
Shrugged, are at the heart of her incalculable impact. Many politicians and government officials going back decades have cited
Rand as a formative influence—particularly finance guru and
former Federal Reserve chairman Alan Greenspan, who was a
member of Rand's inner circle, and Ronald Reagan, the U.S.
president most identified with the national embrace of neoliberal
policies.
Major figures in business and finance are or have been
Rand fans: Jimmy Wales (Wikipedia), Peter Thiel (Paypal), Steve
Jobs (Apple), John Mackey (Whole Foods), Mark Cuban (NBA),
John Allison (BB&T Banking Corporation), Travis Kalanik
(Uber), Jelf Bezos (Amazon), ad infinitum.
There are also large
clusters of enthusiasts for Rand’s novels in the entertainment
industry, from the 1940s to the present—from Barbara Stanwyck,
Joan Crawford, and Raquel Welch to Jerry Lewis, Brad Pitt,
Angelina Jolie, Rob Lowe, Jim Carrey, Sandra Bullock, Sharon
Stone, Ashley Judd, Eva Mendes, and many more.
The current
Trump administration is stuffed to the gills with Rand acolytes.
Trump himself identifies with Fountainhead character Howard
Roark; former secretary of state Rex Tillerson listed Adas
Shrugged as his favorite book in a Scouting magazine feature; his
replacement Mike Pompeo has been inspired by Rand since his
youth. Ayn Rand’s influence is ascendant across broad swaths of
our dominant political culture — including among public figures
who see her as a key to the Zeitgeist, without having read a worth
of her writing.’’
But beyond the famous or powerful fans, the novels have had a wide popular impact as bestsellers since publication. Along with
Rand’s nonfiction, they form the core texts for a political/ philosophical movement: Objectivism. There are several U.S.- based
Objectivist organizations and innumerable clubs, reading groups, and social circles. A 1991 survey by the Library of Congress and the Book of the Month Club found that only the Bible
had influenced readers more than Atlas Shrugged, while a 1998
Modern Library poll listed The Fountainhead and Atlas Shrugged
as the two most revered novels in English.
Atlas Shrugged in particular skyrocketed in popularity in the wake of the 2008 financial crash.
The U.S. Tea Party movement, founded in 2009, featured numerous Ayn Rand—based signs and slogans, especially
the opening line of Atlas Shrugged: “Who is John Galt?” Republican pundit David Frum claimed that the Tea Party
was reinventing the GOP as “the party of Ayn Rand.” During 2009 as
well, sales of Atlas Shrugged tripled, and GQ_magazine called
Rand the year’s most influential author. A 2010 Zogby poll found
that 29 percent of respondents had read Atlas Shrugged, and half
of those readers said it had affected their political and ethical
thinking.
In 2018, a business school teacher writing in Forbes
magazine recommended repeat readings: “Recent events — the
bizarro circus that is the 2016 election, the disintegration of Venezuela, and so on make me wonder if a lot of this could have
been avoided bad we taken Atlas Shrugged's message to heart. It is
a book that is worth re-reading every few years.”3
Rand biographer Jennifer Burns asserts simply that Ayn Rand's fiction is “the
gateway drug” to right-wing politics in the United States — although her influence extends well beyond the right wing.4
But how can the work of this one novelist (also an essayist,
playwright, and philosopher), however influential, be a significant source of insight into the rise of a culture of greed? In a
word: sex. Ayn Rand made acquisitive capitalists sexy. She
launched thousands of teenage libidos into the world of reactionary politics on a wave of quivering excitement. This sexiness extends beyond romance to infuse the creative aspirations,
inventiveness, and determination of her heroes with erotic
energy, embedded in what Rand called her “sense of life.” Analogous to what Raymond Williams has called a “structure of
feeling,” Rand’s sense of life combines the libido-infused desire for
heroic individual achievement with contempt for social inferiors
and indifference to their plight.5
Lauren Berlant has called the
structure of feeling, or emotional situation, of those who struggle for a good life under neoliberal conditions
“cruel optimism”—the complex of feelings necessary to keep plugging
away hopefully despite setbacks and losses.'’ Rand's contrasting
sense of life applies to those whose fantasies of success and domination include no doubt or guilt. The feelings of aspiration and
glee that enliven Rand’s novels combine with contempt for and
indifference to others. The resulting Randian sense of life might
be called “optimistic cruelty.” Optimistic cruelty is the sense of
life for the age of greed.
Ayn Rand’s optimistic cruelty appeals broadly and deeply
through its circulation of familiar narratives: the story of “civilizational” progress, die belief in American exceptionalism, and a
commitment to capitalist freedom.
Her novels engage fantasies of European imperial domination conceived as technological and
cultural advancement, rather than as violent conquest. America
is imagined as a clean slate for pure capitalist freedom, with no
indigenous people, no slaves, no exploited immigrants or workers
in sight. The Fountainhead and especially Atlas Shrugged fabricate
history and romanticize violence and domination in ways that
reflect, reshape, and reproduce narratives of European superiority'
and American virtue.
Their logic also depends on a hierarchy of
value based on radicalized beauty and physical capacity — perceived
ugliness or disability' are equated with pronounced worthlessness
and incompetence.
Through the forms of romance and melodrama, Rand novels extrapolate the story of racial capitalism as a
story of righteous passion and noble virtue. They retell The Birth of
a Ntation through the lens of industrial capitalism (see chapter 2).
They solicit positive identification with winners, with dominant
historical forces. It is not an accident that the novels’ fans, though
gender mixed, are overwhelmingly white Americans of the professional, managerial, creative, and business classes."
Ayn Rand is a singular influence on American political thought, and this book brilliantly
unfolds how Rand gave voice to the ethos that shapes contemporary conservatism. Duggan --
whose equally insightful earlier book Twilight of Equality offered an analysis of
neoliberalism and showed how it is both a distortion and continuation of classical liberalism
-- here extends the analysis of American market mania by showing how an anti-welfare state
ethos took root as a "structure of feeling" in American culture, elevating the individual
over the collective and promoting a culture of inequality as itself a moral virtue.
Although
reviled by the right-wing press (she should wear this as a badge of honor), Duggan is the
most astute guide one could hope for through this devastating history of our recent past, and
the book helps explain how we ended up where we are, where far-right, racist nationalism
colludes (paradoxically) with libertarianism, an ideology of extreme individualism and
(unlikely bed fellows, one might have thought) Silicon Valley entrepreneurship.
This short,
accessible book is essential reading for everyone who wants to understand the contemporary
United States.
Does the pervasive cruelty of today's ruling classes shock you? Or, at least give you
pause from time to time? Are you surprised by the fact that our elected leaders seem to
despise people who struggle, people whose lives are not cushioned and shaped by inherited
wealth, people who must work hard at many jobs in order to scrape by? If these or any of a
number of other questions about the social proclivities of our contemporary ruling class
detain you for just two seconds, this is the book for you.
Writing with wit, rigor, and vigor, Lisa Duggan explains how Ayn Rand, the "mean girl,"
has captured the minds and snatched the bodies of so very many, and has rendered them immune
to feelings of shared humanity with those whose fortunes are not as rosy as their own. An
indispensable work, a short read that leaves a long memory.
Mean Girl offers not only a biographical account of Rand (including the fact that she
modeled one of her key heroes on a serial killer), but describes Rand's influence on
neoliberal thinking more generally.
As Duggan makes clear, Rand's influence is not just that
she offered a programmatic for unregulated capitalism, but that she offered an emotional
template for "optimistic cruelty" that has extended far beyond its libertarian confines. Mean
Girl is a fun, worthwhile read!
Sister, June 3, 2019
Superb poitical and cultural exploration of Rand's influence
Lisa Duggan's concise but substantive look at the political and cultural influence of Ayn Rand is stunning. I feel like
I've been waiting most of a lifetime for a book that is as wonderfully readable as it is insightful. Many who write about
Rand reduce her to a caricature hero or demon without taking her, and the history and choices that produced her seriously as
a subject of cultural inquiry. I am one of those people who first encountered Rand's books - novels, but also some nonfiction
and her play, "The Night of January 16th," in which audience members were selected as jurors – as a teenager.
Under the thrall of some right-wing locals, I was so drawn to Rand's larger-than-life themes, the crude polarization of
"individualism" and "conformity," the admonition to selfishness as a moral virtue, her reductive dismissal of the public good
as "collectivism."
Her work circulated endlessly in those circles of the Goldwater-ite right. I have changed over many years, and my own
life experiences have led me to reject the casual cruelty and vicious supremacist bent of Rand's beliefs.
But over those many years, the coterie of Rand true believers has kept the faith and expanded. One of the things I value
about Duggan's compelling account is her willingness to take seriously the far reach of Rand's indifference to human
suffering even as she strips away the veneer that suggests Rand's beliefs were deep.
In fact, though her views are deeply-seated, Rand is, at heart, a confidence artist, appealing only to narrow
self-interest at the expense of the well-being of whole societies.
I learned that the hard way, but I learned it. Now I am recommending Duggan's wise book to others who seek to understand
today's cultural and political moment in the United States and the rise of an ethic of indifference to anybody but the
already affluent. Duggan is comfortable with complexity; most Randian champions or detractors are not.
The author is a very fuzzy way comes to the idea that neoliberalism is in essence a Trotskyism for the rich and that
neoliberals want to use strong state to enforce the type of markets they want from above. That included free movement of
capital goods and people across national borders. All this talk about "small government" is just a smoke screen for naive fools.
"... The second explanation was that neoliberal globalization made a small number of people very rich, and it was in the interest of those people to promote a self-serving ideology using their substantial means by funding think tanks and academic departments, lobbying congress, fighting what the Heritage Foundation calls "the war of ideas." Neoliberalism, then, was a restoration of class power after the odd, anomalous interval of the mid-century welfare state. ..."
"... Neoliberal globalism can be thought of in its own terms as a negative theology, contending that the world economy is sublime and ineffable with a small number of people having special insight and ability to craft institutions that will, as I put it, encase the sublime world economy. ..."
"... One of the big goals of my book is to show neoliberalism is one form of regulation among many rather than the big Other of regulation as such. ..."
"... I build here on the work of other historians and show how the demands in the United Nations by African, Asian, and Latin American nations for things like the Permanent Sovereignty over Natural Resources, i.e. the right to nationalize foreign-owned companies, often dismissed as merely rhetorical, were actually existentially frightening to global businesspeople. ..."
"... They drafted neoliberal intellectuals to do things like craft agreements that gave foreign corporations more rights than domestic actors and tried to figure out how to lock in what I call the "human right of capital flight" into binding international codes. I show how we can see the development of the WTO as largely a response to the fear of a planned -- and equal -- planet that many saw in the aspirations of the decolonizing world. ..."
"... The neoliberal insight of the 1930s was that the market would not take care of itself: what Wilhelm Röpke called a market police was an ongoing need in a world where people, whether out of atavistic drives or admirable humanitarian motives, kept trying to make the earth a more equal and just place. ..."
"... The culmination of these processes by the 1990s is a world economy that is less like a laissez-faire marketplace and more like a fortress, as ever more of the world's resources and ideas are regulated through transnational legal instruments. ..."
Hardcover: 400 pages
Publisher: Harvard University Press (March 16, 2018)
Language: English
ISBN-10: 0674979524
ISBN-13: 978-0674979529
From introduction
...The second explanation was that neoliberal globalization made a small number of people very rich, and it was in the interest of
those people to promote a self-serving ideology using their substantial means by funding think tanks and academic departments, lobbying
congress, fighting what the Heritage Foundation calls "the war of ideas." Neoliberalism, then, was a restoration of class power after
the odd, anomalous interval of the mid-century welfare state.
There is truth to both of these explanations. Both presuppose a kind of materialist explanation of history with which I have no
problem. In my book, though, I take another approach. What I found is that we could not understand the inner logic of something like
the WTO without considering the whole history of the twentieth century. What I also discovered is that some of the members of the
neoliberal movement from the 1930s onward, including Friedrich Hayek and Ludwig von Mises, did not use either of the explanations
I just mentioned. They actually didn't say that economic growth excuses everything. One of the peculiar things about Hayek, in particular,
is that he didn't believe in using aggregates like GDP -- the very measurements that we need to even say what growth is.
What I found is that neoliberalism as a philosophy is less a doctrine of economics than a doctrine of ordering -- of creating
the institutions that provide for the reproduction of the totality [of financial elite control of the state]. At the core of the strain I describe is not the idea that we
can quantify, count, price, buy and sell every last aspect of human existence. Actually, here it gets quite mystical. The Austrian
and German School of neoliberals in particular believe in a kind of invisible world economy that cannot be captured in numbers
and figures but always escapes human comprehension.
After all, if you can see something, you can plan it. Because of the very limits to our knowledge, we have to default to ironclad
rules and not try to pursue something as radical as social justice, redistribution, or collective transformation. In a globalized
world, we must give ourselves over to the forces of the market, or the whole thing will stop working.
So this is quite a different version of neoliberal thought than the one we usually have, premised on the abstract of individual
liberty or the freedom to choose. Here one is free to choose but only within a limited range of options left after responding to
the global forces of the market.
One of the core arguments of my book is that we can only understand the internal coherence of neoliberalism if we see it as a
doctrine as concerned with the whole as the individual. Neoliberal globalism can be thought of in its own terms as a negative theology,
contending that the world economy is sublime and ineffable with a small number of people having special insight and ability to craft
institutions that will, as I put it, encase the sublime world economy.
To me, the metaphor of encasement makes much more sense than the usual idea of markets set free, liberated or unfettered. How
can it be that in an era of proliferating third party arbitration courts, international investment law, trade treaties and regulation
that we talk about "unfettered markets"? One of the big goals of my book is to show neoliberalism is one form of regulation among
many rather than the big Other of regulation as such.
What I explore in Globalists is how we can think of the WTO as the latest in a long series of institutional fixes proposed
for the problem of emergent nationalism and what neoliberals see as the confusion between sovereignty -- ruling a country -- and
ownership -- owning the property within it.
I build here on the work of other historians and show how the demands in the United Nations
by African, Asian, and Latin American nations for things like the Permanent Sovereignty over Natural Resources, i.e. the right to
nationalize foreign-owned companies, often dismissed as merely rhetorical, were actually existentially frightening to global businesspeople.
They drafted neoliberal intellectuals to do things like craft agreements that gave foreign corporations more rights than domestic
actors and tried to figure out how to lock in what I call the "human right of capital flight" into binding international codes. I
show how we can see the development of the WTO as largely a response to the fear of a planned -- and equal -- planet that many saw
in the aspirations of the decolonizing world.
Perhaps the lasting image of globalization that the book leaves is that world capitalism has produced a doubled world -- a world
of imperium (the world of states) and a world of dominium (the world of property). The best way to understand neoliberal globalism
as a project is that it sees its task as the never-ending maintenance of this division. The neoliberal insight of the 1930s was that
the market would not take care of itself: what Wilhelm Röpke called a market police was an ongoing need in a world where people,
whether out of atavistic drives or admirable humanitarian motives, kept trying to make the earth a more equal and just place.
The culmination of these processes by the 1990s is a world economy that is less like a laissez-faire marketplace and more like
a fortress, as ever more of the world's resources and ideas are regulated through transnational legal instruments. The book acts
as a kind of field guide to these institutions and, in the process, hopefully recasts the 20th century that produced them.
3.0 out of 5 stars
One half of a decent book May 14, 2018 Format: Hardcover Verified Purchase This is a rather
interesting look at the political and economic ideas of a circle of important economists, including Hayek and von Mises, over
the course of the last century. He shows rather convincingly that conventional narratives concerning their idea are wrong. That
they didn't believe in a weak state, didn't believe in the laissez-faire capitalism or believe in the power of the market. That
they saw mass democracy as a threat to vested economic interests.
The core beliefs of these people was in a world where money, labor and products could flow across borders without any limit.
Their vision was to remove these subjects (tariffs, immigration and controls on the movement of money) from the control of the
democracy-based nation-state and instead vesting them in international organizations. International organizations which were by
their nature undemocratic and beyond the influence of democracy. That rather than rejecting government power, what they rejected
was national government power. They wanted weak national governments but at the same time strong undemocratic international organizations
which would gain the powers taken from the state.
The other thing that characterized many of these people was a rather general rejection of economics. While some of them are
(at least in theory) economists, they rejected the basic ideas of economic analysis and economic policy. The economy, to them,
was a mystical thing beyond any human understanding or ability to influence in a positive way. Their only real belief was in "bigness".
The larger the market for labor and goods, the more economically prosperous everyone would become. A unregulated "global" market
with specialization across borders and free migration of labor being the ultimate system.
The author shows how, over a period extending from the 1920s to the 1990s, these ideas evolved from marginal academic ideas
to being dominant ideas internationally. Ideas that are reflected today in the structure of the European Union, the WTO (World
Trade Organization) and the policies of most national governments. These ideas, which the author calls "neoliberalism", have today
become almost assumptions beyond challenge. And even more strangely, the dominating ideas of the political left in most of the
west.
The author makes the point, though in a weak way, that the "fathers" of neoliberalism saw themselves as "restoring" a lost
golden age. That golden age being (roughly) the age of the original industrial revolution (the second half of the 1800s). And
to the extent that they have been successful they have done that. But at the same time, they have brought back all the political
and economic questions of that era as well.
In reading it, I started to wonder about the differences between modern neoliberalism and the liberal political movement during
the industrial revolution. I really began to wonder about the actual motives of "reform" liberals in that era. Were they genuinely
interested in reforms during that era or were all the reforms just cynical politics designed to enhance business power at the
expense of other vested interests. Was, in particular, the liberal interest in political reform and franchise expansion a genuine
move toward political democracy or simply a temporary ploy to increase their political power. If one assumes that the true principles
of classic liberalism were always free trade, free migration of labor and removing the power to governments to impact business,
perhaps its collapse around the time of the first world war is easier to understand.
He also makes a good point about the EEC and the organizations that came before the EU. Those organizations were as much about
protecting trade between Europe and former European colonial possessions as they were anything to do with trade within Europe.
To me at least, the analysis of the author was rather original. In particular, he did an excellent job of showing how the ideas
of Hayek and von Mises have been distorted and misunderstood in the mainstream. He was able to show what their ideas were and
how they relate to contemporary problems of government and democracy.
But there are some strong negatives in the book. The author offers up a complete virtue signaling chapter to prove how the
neoliberals are racists. He brings up things, like the John Birch Society, that have nothing to do with the book. He unleashes
a whole lot of venom directed at American conservatives and republicans mostly set against a 1960s backdrop. He does all this
in a bad purpose: to claim that the Kennedy Administration was somehow a continuation of the new deal rather than a step toward
neoliberalism. His blindness and modern political partisanship extended backward into history does substantial damage to his argument
in the book. He also spends an inordinate amount of time on the political issues of South Africa which also adds nothing to the
argument of the book. His whole chapter on racism is an elaborate strawman all held together by Ropke. He also spends a large
amount of time grinding some sort of Ax with regard to the National Review and William F. Buckley.
He keeps resorting to the simple formula of finding something racist said or written by Ropke....and then inferring that anyone
who quoted or had anything to do with Ropke shared his ideas and was also a racist. The whole point of the exercise seems to be
to avoid any analysis of how the democratic party (and the political left) drifted over the decades from the politics of the New
Deal to neoliberal Clintonism.
Then after that, he diverts further off the path by spending many pages on the greatness of the "global south", the G77 and
the New International Economic Order (NIEO) promoted by the UN in the 1970s. And whatever many faults of neoliberalism, Quinn
Slobodian ends up standing for a worse set of ideas: International Price controls, economic "reparations", nationalization, international
trade subsidies and a five-year plan for the world (socialist style economic planning at a global level). In attaching himself
to these particular ideas, he kills his own book. The premise of the book and his argument was very strong at first. But by around
p. 220, its become a throwback political tract in favor of the garbage economic and political ideas of the so-called third world
circa 1974 complete with 70's style extensive quotations from "Senegalese jurists"
Once the political agenda comes out, he just can't help himself. He opens the conclusion to the book taking another cheap shot
for no clear reason at William F. Buckley. He spends alot of time on the Seattle anti-WTO protests from the 1990s. But he has
NOTHING to say about BIll Clinton or Tony Blair or EU expansion or Obama or even the 2008 economic crisis for that matter. Inexplicably
for a book written in 2018, the content of the book seems to end in the year 2000.
I'm giving it three stars for the first 150 pages which was decent work. The second half rates zero stars. Though it could
have been far better if he had written his history of neoliberalism in the context of the counter-narrative of Keynesian economics
and its decline. It would have been better yet if the author had the courage to talk about the transformation of the parties of
the left and their complicity in the rise of neoliberalism. The author also tends to waste lots of pages repeating himself or
worse telling you what he is going to say next. One would have expected a better standard of editing by the Harvard Press.
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The book follow the Austrians from the beginning in the Habsburgischer empire to the beginning rebellion against the WTO. However,
most importantly it follows the thinking and the thoughts behind the building of a global empire of capitalism with free trade,
capital and rights. All the way to the new "human right" to trade. It narrows down what neoliberal thought really consist of and
indirectly make a differentiation to the neoclassical economic tradition.
What I found most interesting is the turn from economics to law - and the conceptual distinctions between the genes, tradition,
reason, which are translated into a quest for a rational and reason based protection of dominium (the rule of property) against
the overreach of imperium (the rule of states/people). This distinction speaks directly to the issues that EU is currently facing.
3.0 out of 5 stars
A historian with an agenda October 22, 2018 Format: Hardcover Author is covering Mises, Hayek, Machlup in Vienna. How to produce
order once the Habsburg empire had been broken after 1918? They pioneered data gathering about the economy. However, such data
came to be used by the left as well. This forced the people mentioned to become intellectual thinkers as opposed to something
else(??). I like how the author is situating the people in a specific era, but he is reading history backwards. The book moves
on, but stays in Central Europe. Ordocapitalism followed after Hitler. It was a German attempt to have a both strong state and
strong by market, which given Europe's fragmentation required international treaties. This was seen as a way to avoid another
Hitler. Later, international organisations like IMF and TWO became the new institutions that embedded the global markets. The
book ends in the 90s. So in reading history backwards, the author finds quotations of Mises and Hayek that "prove" that they were
aiming to create intellectual cover for the global financial elite of the 2010s.
Nevertheless, the book is interesting if you like the history of ideas. He frames the questions intelligently in the historical
context at the time. However a huge question-mark for objectivity. The book is full of lefty dog whistles: the war making state,
regulation of capitalism, reproducing the power of elites, the problem [singular] of capitalism. In a podcast the author states
point blank "I wanted the left to see what the enemy was up too". I find it pathetic that authors are so blatantly partisan. How
can we know whether he is objective when he doesn't even try? He dismissively claims that the neoliberal thinkers gave cover to
what has become the globalist world order. So why should we not consider the current book as intellectual cover for some "new
left" that is about to materialise? Maybe the book is just intellectual cover for the globalist elite being educated in left-wing
private colleges.
You stated, "Let's also ignore the fact that the sons and grandsons of the unionised
postwar generation for the most part subsequently rejected blue collar work no matter what
the pay. This is a sign of decadence I will grant you, and I am guilty as charged. "
This canard doesn't hold up in the face of empirical evidence. One example: 20,000 waiting
in line for lousy warehouse jobs at Amazon. The fact is, open borders and illegal immigration
are NeoLiberal tactics to promote wage arbitrage. In California, those impacted the most by
illegal immigration are African Americans. Whole sectors, such as hotel maintenance and
janitorial service, had been unionized, and had principally employed black workers whose
salaries enabled them to move into the middle class. The hotel industry welcomed the influx
of illegal immigrants willing to work for drastically lower wages. Black workers were
replaced and the union destroyed. Unfortunately, many in the US and globally have been so
propagandized about illegal immigration that even mentioning illegal immigration gets one
falsely labeled racist. in the US, Democrats use illegal immigration as a "demographic
strategy," which enables Democrats to remain in power while remaining wholly loyal to Wall
Street and doing nothing to ameliorate the misery of the bottom 90%.
"... He would be given a lavish reception in Riyadh, where he would deliver a speech thanking our Saudi allies for leading the brave fight against "Iranian homophobia." ..."
On the bright side, if ever there were a candidate who might be inclined to rethink our
relationship with the Saudis, it's Buttigieg.
Oh, who am I kidding? He would be given a lavish reception in Riyadh, where he would
deliver a speech thanking our Saudi allies for leading the brave fight against "Iranian
homophobia."
"... Across-the-board rivalry with China is becoming an organising principle of US economic, foreign and security policies. ..."
"... An effort to halt China's economic and technological rise is almost certain to fail. Worse, it will foment deep hostility in the Chinese people. In the long run, the demands of an increasingly prosperous and well-educated people for control over their lives might still win out. But that is far less likely if China's natural rise is threatened. ..."
"... The tragedy in what is now happening is that the administration is simultaneously launching a conflict between the two powers, attacking its allies and destroying the institutions of the postwar US-led order. ..."
The disappearance of the Soviet Union left a big hole. The "war on terror" was an inadequate replacement. But China ticks all boxes.
For the US, it can be the ideological, military and economic enemy many need. Here at last is a worthwhile opponent. That was the
main conclusion I drew from this year's Bilderberg meetings.
Across-the-board
rivalry with China is becoming
an organising principle of US economic, foreign and security policies.
Whether it is Donald Trump's organizing principle is less important. The US president has the gut instincts of a nationalist and
protectionist. Others provide both framework and details. The aim is US domination. The means is control over China, or separation
from China.
Anybody who believes a rules-based multilateral order, our globalised economy, or even harmonious international relations, are
likely to survive this conflict is deluded. The astonishing
white paper on the
trade conflict
, published on Sunday by China, is proof. The -- to me, depressing -- fact is that on many points Chinese positions are right.
The US focus on
bilateral imbalances is economically illiterate. The view that theft of intellectual property has caused huge damage to the US
is
questionable . The proposition that China has grossly violated its commitments under its 2001 accession agreement to the World
Trade Organization is hugely exaggerated.
Accusing China of cheating is hypocritical when almost all trade policy actions taken by the Trump administration are in breach
of WTO rules, a fact implicitly conceded by its determination
to destroy the
dispute settlement system .
A dispute over the terms of market opening or protection of intellectual property might be settled with careful negotiation. Such
a settlement might even help China, since it would lighten the heavy hand of the state and promote market-oriented reform.
But the issues are now too vexed for such a resolution. This is partly because of the bitter breakdown in negotiation. It is still
more because the US debate is increasingly over whether integration with China's state-led economy is desirable. The fear over Huawei
focuses on national security and technological autonomy.
[Neo]liberal commerce is increasingly seen as "trading with the enemy".
A framing of relations with China as one of zero-sum conflict is emerging. Recent remarks by Kiron Skinner, the US state department's
policy planning director (a job once held by cold war strategist George Kennan) are revealing. Rivalry with Beijing,
she suggested at a
forum organised
by New America , is "a fight with a really different civilisation and a different ideology, and the United States hasn't had
that before".
She added that this would be "the first time that we will have a great power competitor that is not Caucasian". The war with Japan
is forgotten.
But the big point is her framing of this as a civilizational and racial war and so as an insoluble conflict. This cannot be accidental.
She is also still in her job. Others present the conflict as one over ideology and power.
Those emphasising the former point to President Xi Jinping's Marxist rhetoric and the reinforced role of the
Communist party . Those emphasising the latter point to China's rising economic might. Both perspectives suggest perpetual conflict.
This is the most important geopolitical development of our era. Not least, it will increasingly force everybody else to take sides
or fight hard for neutrality. But it is not only important. It is dangerous. It risks turning a manageable, albeit vexed, relationship
into all-embracing conflict, for no good reason. China's ideology is not a threat to liberal democracy in the way the Soviet Union's
was. Rightwing demagogues are far more dangerous.
An effort to halt China's economic and technological rise is almost certain to fail. Worse, it will foment deep hostility in the
Chinese people. In the long run, the demands of an increasingly prosperous and well-educated people for control over their lives
might still win out. But that is far less likely if China's natural rise is threatened.
Moreover, the rise of China is not an important cause of western malaise. That reflects far more the indifference and incompetence
of domestic elites. What is seen as theft of intellectual property reflects, in large part, the inevitable attempt of a rising economy
to master the technologies of the day. Above all, an attempt to preserve the domination of 4 per cent of humanity over the rest is
illegitimate.
This certainly does not mean accepting everything China does or says. On the contrary, the best way for the west to deal with
China is to insist on the abiding values of freedom, democracy, rules-based multilateralism and global co-operation. These ideas
made many around the globe supporters of the US in the past.
They still captivate many Chinese people today. It is quite possible to uphold these ideas, indeed insist upon them far more strongly,
while co-operating with a rising China where that is essential, as over protecting the natural environment, commerce and peace.
A blend of competition with co-operation is the right way forward. Such an approach to managing China's rise must include co-operating
closely with like-minded allies and treating China with respect.
The tragedy in what is now happening is that the administration is simultaneously launching a conflict between the two powers,
attacking its allies and destroying the institutions of the postwar US-led order.
Today's attack on China is the wrong war, fought in the wrong way, on the wrong terrain. Alas, this is where we now are.
Two important posts from Michael Roberts' Facebook.
About the USA:
The end of the American dream (if it ever existed)..
In America and also much of Europe, the current post-war baby boomer generation will be
the first that cannot expect their children to get higher living standards than them. The
percentage of 30-year olds earning more than their parents is at its lowest level ever
recorded.
Inequality of income is at its highest in 100 years, when you compare the share of the
top 1% to the bottom 90%.
The economic mobility rate in the US is now one of the worst in the developed world. In
the US, people in the bottom income quartile have a 40% chance of having a father in the
bottom quartile (in the father's prime earning years) and people in the top quartile have
only about an 8% chance of having a father in the bottom quartile, suggesting half of the
average probability of moving up and one of the worst probabilities of all the countries
analyzed.
About Japan and Germany:
Two key G7 economies continue to show a significant slowdown in economic growth.
German industrial production plunged 1.9 percent from a month earlier in April 2019,
much worse than market expectations of a 0.4 percent fall and after a 0.5 percent gain in
the previous month.
That was the biggest drop in output since August 2015, amid falls in the production of
capital goods (-3.3 percent), intermediate goods (-2.1 percent), energy (-1.1 percent) and
consumer goods (-0.8 percent). Year-on-year, industrial production dropped 1.8 percent in
April, following a 0.9 percent fall in March. Manufacturing output dropped 3.4% over the
year. Both exports and imports fell.
The German Bundesbank cut its GDP growth forecast for this year to just 0.6%, down from
1.6% at the beginning of 2019.
Japanese wages fell for the fourth consecutive month and overall household spending
slowed sharply. Unemployment, currently at record lows, is set to rise.
"... "A half-century ago, a top automobile executive named George Romney -- yes, Mitt's father -- turned down several big annual bonuses. He told his company's board he believed that no executive should make more than $225,000 a year (which translates into almost $2 million today). ..."
"... "The salary of the chief executive of a large corporation is not a market award for achievement. It is frequently in the nature of a warm personal gesture by the individual to himself." John Kenneth Galbraith ..."
"... It is worth remembering just how much the companies of the mega-rich depend on tax paid for services and infrastructure. Where would Amazon be with out the road and US postal service? ..."
"... AOC is a ground-breaker on taxing the rich. I hope she takes on raising the corporate tax, which Bernie has hinted at. ..."
"... Neoliberal capitalism has gutted the American middle and working classes, leaving only gig economy jobs, like Saturn eating his children. Tax 'em and put their money to use on health care, education, the Green New Deal and job creation, affordable daycare, and rebuilding communities. ..."
NYT David Leonhardt "When the Rich Said No To Getting Richer". Quite a contrast. "A half-century ago, a top automobile
executive named George Romney -- yes, Mitt's father -- turned down several big annual bonuses. He told his company's board he
believed that no executive should make more than $225,000 a year (which translates into almost $2 million today).
He worried that "the temptations of success" could distract people from more important matters. This belief seems to have stemmed
from both Romney's Mormon faith and a culture of financial restraint that was once commonplace in this country. Romney didn't
try to make every dollar he could, or anywhere close to it. The same was true among many of his corporate peers. In the early
1960s, the typical chief executive at a large U.S. company made only 20 times as much as the average worker, rather than the current
271-to-1 ratio. Today, some C.E.O.s make $2 million in a single month. The old culture of restraint had multiple causes. One was
the tax code. When Romney was saying no to bonuses, the top marginal tax rate was 91%." That was under GOP Eisenhower. And jobs
here, unions strong, state college tuition tax subsidized-- the middle/working class had upward mobility and faith in the future.
Now, per the international GINI Index of middle class security and upward economic mobility, the USA ranks behind many other capitalist
democracies. What would George Romney say about Trump as president?
@Tom: Could it be possible too many loopholes and deductions are written into the system to make it effective? We have been
defunding the IRS and building a tax system that favors creative returns for decades. Maybe it's time to go in another direction.
@Ron Cohen "The salary of the chief executive of a large corporation is not a market award for achievement. It is frequently
in the nature of a warm personal gesture by the individual to himself." John Kenneth Galbraith
@WPLMMT; You mistunderstand. The 70% applies only to income OVER the threshold. So theoretically, the first 50 thousand (above
the standard deduction) could be taxed at ,say 10%, the next 50K at 20%, from 100K - 500K at 30%, from 500k to a million at 50%.
So the takehome from a million would be 715K, enough for anyone to live on. The exact details don't matter. It is the idea that
only income above a very high number would be taxed at the marginal rate.
If the goal is to raise revenue by taxing high earners at a higher rate, it seems to me that a good place to begin would be
to raise the effective tax rate on the rich to around 40% by eliminating the 50% discount on capital gains, and the depreciation
allowances for real estate investments.
Income tax rate increases at high income levels would help but they miss the point. The real wealth in this country is from
those who own assets, not those who draw a paycheck. The real deal would be to raise taxes on passive income and estate taxes
on an ever increasing scale where, say, anything over $1m in annual passive income and $50m in estate value is taxed at 50% or
higher. America is the land of opportunity; if those of us lucky enough to make it just leave it all to our heirs, they will have
little incentive to work and add value to their own lives as well as to society. Plus the velocity of capital that would occur
from heirs being forced to sell companies, real estate and other assets to pay estate taxes will place those assets in the hands
of those best able to maximize their value going forward. Paul and AOC, I hope you are reading this and plugging it into your
thinking.
I only wish the democrats would try to educate what the marginal tax means when they discuss policy in the public sphere. The
media is going to go nuts with this 70% rate without taking the time to explain that it's only an additional bracket at the tippy
top of the scale. This proposal wouldn't affect 99% of the country.
Every day I see and hear more about this young woman, I am more impressed. Disclaimer: I am a 68 year old white guy (Jew).
She is smart, articulate, talks truth to power, and is also very hot! A tough combination to beat.Her Twitter comebacks against
old Republican men are witty and hilarious, and hit home. I say AOC has a great future. She will learn the political ropes quickly.
In ten years, stand by to stand by.
A high percentage of wealthy people inherited their money. There are many examples of highly successful men who marry beautiful,
but not necessarily intelligent women. Their children's IQs are somewhere in between their parents IQ numbers. The end result
is greed-driven wealth management and less than honorable decisions, including buying politicians. Narcissism runs rampant among
this group with POTUS and some of his children as a prime example. Thomas Jefferson strongly felt that large inheritances should
be heavily taxed to prevent the harmful activities of the very rich from destroying our democracy. He was right.
We all benefit from living in this great nation of opportunity. Once you make more than 100K per month you should pay 70% tax.
It is OFFENSIVE that our great nation does not provide free education through college, provide health insurance (especially, since
there are people making millions ripping off the medical system), provide free daycare, housing and food for those who need support.
TAX INCOME OVER 1 million....if this is a disinsentive then there is something seriously wrong with you.
The U.S. has had a long history of a graduated income tax. In the Reagan era, the tax rate was at 50 percent having come down
from 70 percent. We are not funding government spending, and are instead running up substantial deficits. Moreover, as the baby-boom
population retires, social security and medicare will become unsustainable. While we can certainly reduce government spending
significantly (especially the sacred cow of military spending), we will need to increase tax revenues. Tax increases are inevitable,
and the most fair way to distribute the burden of increased taxes is through a graduated income tax. Those with the ability to
pay, should pay more. After all, they are certainly enjoying the benefits of a free and stable country more than those at the
other end of the income spectrum. While we can argue what the top marginal rate should be, it certainly should be 50 percent or
greater. We should also eliminate the special tax preference given to dividends and capital gains, which mainly inure to the wealthy.
To those whom much is given, much is expected.
@Jason First, no one is talking about taxing businesses at 73%, only individuals who are at extreme high levels of income.
Second, why do the rich always seem to think that the "unwashed masses" owe them something? Go to Canada where in addition to
a higher tax rate on your business you will also be paying for single payer health care for employees and subject to common sense
regulations that businesses here are no subject to. The grass is always greener.
@NR Agreed and same here with our money. How much does anyone really need, beyond a certain point? Wherever that point is,
I passed it decades ago. It's so disheartening to see how many people, often quite poor people, fully believe the mantra that
taking money from rich people will reduce jobs and growth. Very little of my wealth goes towards growth. It's in index funds and
T-bills and other instruments that mostly hold it until it's traded to some other wealthy person, hopefully at a profit to me.
About the only way my money leads to growth is through the start-ups I have self-funded over the years. And even these were sold
to large corporations (or they failed) by the time they had a few hundred employees. Most exits occurred with just a dozen or
so employees. Mostly the wealthy barter and trade pieces of their portfolios with one another. It's just a game.
The most obvious thought to share here is about the laughable efforts of people who don't know economics from shoe boxes to
try and sound more knowledgeable than a Nobel prize winning economist quoting... Nobel prize winning economists. The second most
obvious thought is that the threat/boogie man of all the "rich people" leaving the US for "greener pastures" is both ludicrous
and historically refuted. They simply DID NOT LEAVE in the 20th century, despite the economy becoming more mixed. They DID NOT
LEAVE when the top MARGINAL tax rates were above 75%. And they did not leave when their research (you know, there actually is
a fairly high correlation between affuence and intelligence...) revealed the FACT that the best places in the world to live are
almost universally even more "mixed" than the US, are almost universally further left than what passes for a "left" in the US,
and almost universally have significantly higher taxes. Folks, they just aren't going to bag up their bucks and blow town.
Before Ronald Reagan, the top marginal tax rate was 70%. The country was doing fine and the rich were doing well also. Reagan
reduced it to 50% and the rate was further reduced in subsequent administrations. For the last 40 years, there has been a massive
transfer of wealth from the middle and the bottom earners to the very top. A main reason for the income inequality that we see
in the country today. The top marginal rate should be raised above 70%. Money made by labor and money made by money (investment)
should be taxed at the same rate if we want to narrow the income inequality in the country and also find the money for investments
in infrastructure etc. What AOC is saying is nothing radical but common sense.
"You see, the mere thought of having a young, articulate, telegenic nonwhite woman serve is driving many on the right mad --
and in their madness they're inadvertently revealing their true selves." Actually, professor, the mere thought of having a young,
articulate, telegenic nonwhite man as president for 8 years DROVE many on the right mad- and in their madness they're inadvertently
revealing their true selves.
But rich people also benefit from raising their taxes in that the society as a whole takes a huge leap forward. Investment
in our society leads to lower crime rates and less incarceration lead to a bigger tax base. Improvements to infrastructure and
health care reduce enormous drains on the economy. Investment in education increase the value of labor, and most of all eliminating
the deficit makes us strong at home and abroad. Everyone wins.
@Red Sox, '04, '07, '13, '18, It is worth remembering just how much the companies of the mega-rich depend on tax paid for
services and infrastructure. Where would Amazon be with out the road and US postal service?
@Billy Walker At less than $100k/year in income, you needn't worry. In income tax terminology, the term "marginal" means a
rate that's applied only to income above a high threshold affecting the top percentile of earners. In your IRS Form 1040, you'll
note that you are taxed at a certain percentage based on your adjusted gross income (AGI). Your AGI places you in a tax bracket,
or income range. A marginal rate of 70% would apply to the highest tax bracket, because it would affect only those dollars that
exceed a certain threshold (such as the $10 million mentioned by Ocasio-Cortez) - a threshold most of us will never even imagine
earning, much less topping. Don't let the number scare you, Billy Walker - unless you hit the Powerball.
Professor Krugman, I am delighted that you are back to writing what you know best and help the nation understand what is behind
the noisy rhetoric. Ocasio-Cortez is an impressive politician. By getting good advice from experts, whether it is economists,
sociologist, climate scientists and political philosophers, she will deliver to the congress a much needed intelligent and sunny
feedback to propose and implement good policy. Please seek her out and offer her your advice. People like Saez, Piketty, Reich,
Stiglitz and yourself are treasures (except for the second and perhaps the first national treasures) politicians should tap into.
We need the GOP out of our lives. Rational taxation policy is one of the key elements of a successful Democratic government. It
will help pay for all the good ideas: universal healthcare (you are lagging behind there), free public education from Kindergarten
through College, environmental sanity. Regulation of Big Pharma, Wall Street (tax algorithmic trading for one, bring back G-S
for another), Big Tech and of course Big Healthcare will all help getting back our country to sound governance of the FDR era,
tax policies included. Thank you in advance.
@Charlie in NY I do get tired of this type of comment, 'outsourced their military defence to the US'. The cold reality is that
US administrations have very much wanted to have the largest military and a stunning number of military bases around the world.
Your governments have embraced the role of world's police force including covertly (and openly) pursuing regime change in many
jurisdictions. Over the decades your country has very much wanted this role, at the expense of other important priorities and
needs in your country. Don't blame the rest of us for wanting a more balanced approach to military and other spending. Your wars
in the Middle East, which have nothing to do with Europe, have cost you tremendously.
AOC is a ground-breaker on taxing the rich. I hope she takes on raising the corporate tax, which Bernie has hinted at.
Chris Rock once explained, "Shaq is rich, but the white man who signs his check is wealthy." Raise Bezos' income and capital gains
taxes, sure, but go for the big money -- tax Amazon's profits, assets, stock trading, acquisitions, and end all tax break/corporate
welfare. Apple spent its Trump tax break buying back stock to enrich stockholders and executives; Sheldon Adelson put his on Republicans
in the '18 election. Hedge funds bought, dismembered and stripped, then bankrupted Toys R Us and Sears, and another is ripping
off Puerto Rico.
Neoliberal capitalism has gutted the American middle and working classes, leaving only gig economy jobs, like Saturn eating
his children. Tax 'em and put their money to use on health care, education, the Green New Deal and job creation, affordable daycare,
and rebuilding communities.
@Michael Evans-Layng, PhD Yes, I agree with this comment. It's not even possible to conclude that there is a correlation here;
my guess is that a correlation would not hold up to statistical analysis. However, it is certainly clear that, "high taxes on
the wealthy and solid economic performance can coexist just fine". And that's all one needs to know, as a higher marginal rate
will bring many benefits without having to hold the burden of being a single-variable driver of growth.
If 20% of this country understands what marginal rates are, then I'd be surprised. I have been a financial professional for
30+ years, and I rarely have a client - no matter how sophisticated - that understands it. And somehow I wonder how much of Congress
understands it. Our country experienced strong growth and a healthy economy when marginal rates were high. And the concentration
of wealth did not exist back then. We are just rationalizing a greed is good mentality by using terms like 70% tax rate - to scare
people - instead of just saying raise taxes on the top 5%.
The Republicans are looting the country with no one stopping them. The rich control all three branches of our government, which
explains our current fiscal policy. The rich obviously don't want to be part of America other than to own it.
@MV This reminds me of when, I believe it was towards the end of the last recession, I accidentally found myself on a Republican
phone list. I got a call during which they were pitching tax breaks for the wealthy saying how it would create jobs. My response
was to say that they wouldn't add jobs, just spend it on more Hermes scarves. (They go from several hundred to a couple thousand
dollars.) I thought I was wise-cracking but sure enough I saw in the news a day or two later that Hermes stock was doing remarkably
well.
@Jason, the rationale here is that society is better served with more equitable wealth distribution, as seen in Scandinavian
countries, rather then the obscene wealth disparities seen here in the U.S. Your answer to this is, if you try and raise my taxes
in order to benefit society as a whole, rather then just me I will run to anywhere that has the lowest tax rate. Well this is
the mantra of every wealthy individual and business globally and as a result we have a tax base comprised of higher rates for
middle income Americans who are squeezed financially in every direction and actually need the money, who carry the financial burden,
while the wealthy use their money to buy political influence and over time further lower their tax rate for themselves and the
business's they own, thus skirting their financial responsiblity to society which they benefit from. The rich have done plenty
wrong, that is the point. We would not be in the horrible situation we are in now as a country without the sociopathic levels
of greed seen in the upper echelons of wealth. Its time to take back the country from people like yourself who would rather run
and preserve or hide their wealth then be willing to pay their fair share of taxes.
@Allan Reagan I doubt very seriously that you or just about anyone else regularly works 75 hours a week. That would very roughly
translate into just under 11 hours a day seven days a week. Meaning you are at the office by 8:00 AM and leave around 8:00 PM
seven days a week. I am being very conservative in allocating only one hour for eating, bathroom breaks, personal phone calls,
etc... Your wealth would likely mean a mansion in the suburbs. Figure a minimum of 45 minutes each way drive time. Total round
trip an hour and a half. An hour to shower, shave, have coffee and quickly check the daily newspaper. I have allocated zero time
for dinner time, shopping for clothes or food, etc... Zero family time. The math just does not add up. If by some freak of nature
you really do work 75 hours a week then you are an all-time terrible husband and/or father. No matter how big your bank account
is or how many houses you own. Ask your family....would they rather have less things and you only working 45-50 hours a week or
more things. If they even care anymore. Promoting absentee husbands and fathers is certainly not the way to craft a truly civil
society.
Zillionaires work harder by investing smarter. Investing smarter often means certainty in return on that investment. How better
to insure that certainty than to invest in a "low tax" congressperson? Much easier and better expected return than say R&D or
infrastructure.
@Barking Doggerel Intel is a prime example. The first Intel CEO who was a Republican, was a Bush supporter named Paul Otellini.
He famously told Steve Jobs that Intel did not want to make the microprocessor for the iPhone. Intel then went from being the
number one maker of microprocessors to being the number two. The second Intel CEO who was a Republican, was a Trump supporter
named Brian Krzanich. He was an "expert" at manufacturing. Under his leadership Intel went for being the number one semiconductor
company to being the number two. Apparently Republicans have a penchant for turning everything into number two.
@vulcanalex: As a frequent commenter here, you SHOULD know about marginal tax rates, namely, that even with a top tax rate
of 90%, nobody would pay that on their entire income. In the days when that rate was in force, it kicked in at an income level
that would be equal to about $4 million per year. In order to avoid that, rich people upped their charitable contributions and
did other things that might benefit society. Best of all, none of them starved.
@Andrew You are right - Warren Buffett stated that he pays less income tax than his secretary as his income derives from capital
gains and dividends, and hers from employment.
His article was about personal income tax, not business tax. Unless you relinquish your US citizenship, you will have to pay
income tax regardless of where your business is located. The point of discussing an increase in income tax on the ultra rich is
to be able to fund social security, Medicare and Medicaid, and the other federal programs and agencies. Why is this relevant?
Because Republicans routinely cut taxes for the wealthy and then say they need to cut funding for all these programs to balance
the federal budget. If we can generate sufficient revenue for the federal government then we don't need to cut funding for all
these federal programs.
The Trump tax cut has added $2trillion to the national debt -- -an increase of 10%. The tax cut was supposed to pay for itself,
because the increase in wages and profits would provide enough in tax revenue ( even at the lower tax rate). The deficits would
shrink and eventually go away. None of these fantasies have ever been realized. Not under Reagan, W, or Trump. Its time to Ms.
Cortez-Ocasio's "insane" ideas -- a 90% tax on income over $10 million per year is no crazier than these Republican tax schemes
and the "suffering" only affects a tiny nunber of citizens. A return to Eisenhower-era tax rates hardly constitutes Bolshevism.
There are a lot of comments here criticizing AOC and Professor Krugman over the idea of such a high tax on the mega-wealthy.
To them I simply say this: You can't get away from our country's history. We were collectively at our most prosperous as a nation
for the twenty-five years after the Second World War, during which time our middle class was the envy of the world. During that
time, taxes on the very rich were in line with what AOC is proposing. Corporate taxes were also high. Union membership was also
high. Our country was much better off for all of those things. I'm already a fan of AOC. She's going to make a lot of right-wing
heads explode.
I'd be interested in knowing to what extent much higher tax rates on the wealthy drive severe tax avoidance behavior, like
parking money overseas. Clearly higher rates would have to be accompanied by stricter enforcement and tighter rules to avoid losing
the expected revenue windfall.
@hammond Good point about the postwar conditions that went along with high marginal rates. But even if we avoid the mistake
of concluding that high rates caused growth, there is still no reason to conclude that high rates impede growth.
Maybe a higher marginal tax rate with stricter enforcement woudl have driven Trump out of the country and saved us the horror
of the last two years. :-)
@Barking Doggerel: "And the very wealthy I've known are not smarter, more creative or virtuous than the folks who work for
them or for other wealthy executives." That goes for politicians and economists, too.
What is stupendous wealth good for? The marginal utility of wealth is quickly decreasing for ordinary survival goods like food
and tents. But very expensive goods can only be had by the most wealthy. To get the most expensive and desirable things you must
outbid other wealthy people. If you want to influence a key senator, for instance, you're going to have to come up with more than
the opposition. If you want an original Van Gogh to impress others, you're going to have to outbid everybody else. If you need
a kidney transplant quickly it won't be cheap. Wealth buys power. A mere millionaire nowadays only has leverage against common
folk but is seen as a whiff by any billionaire. Power is roughly proportional to wealth, it's a relative thing. Those more wealthy
can always kick sand in your face and that's still aggravating despite that you can kick sand in the faces of the myriads of the
poor. The wealthy believe in the legitimacy of wealth and strive to purify this. There are always illegitimate jerks trying to
beat the system, trying to circumvent the power of wealth. Jerks yammer about things like truth, science and justice. What they're
really trying to do is get power without properly paying for it. It's necessary to put down those upstarts who whine about such
things. This is another thing wealth is good for and another reason why you can never have enough.
You quote economists in defense of your argument, or as the Republicans would say 'pointy-headed intellectuals'. But if Ocasio-Cortez
is crazy, what would the Republicans call Dwight David Eisenhower? He thought a marginal tax rate of 91% was just right. So he's
obviously far crazier than Ocasio-Cortez. Dan Kravitz
@Rima Regas The Rich really do believe they're entitled to rob the poor, and they've created various laws that make it easy
and legal, which further entitles them, or so they believe. It's all part of the Rich-person alt-reality - a perk of being rich.
Just a reminder – and of course this is obvious to most readers – but neither the article nor many of the comments make it
clear that the 73% or 80% is the last step of a progressive scale. Krugman and AOC are not proposing that ALL income be taxed
at that rate. The maximum rate would apply only to that portion of a taxpayer's income above a certain dollar amount. The 73%
or 80% rate could actually be set at a very high level of income, say $1 million or more. The benefits to all would be enormous.
The detriment to high earners would be small.
@vulcanalex And what is good for the country and your fellow citizens? I would hope that it is not all about you. If one's
goal is to have a vibrant economy, good infrastructure and education are needed. I have two suggestions as to where to look for
the needed funds: corporations (especially those paying employees less than a living wage and depending on taxpayers to provide
food stamps and subsidize health care) and the very high income individuals. You may not be in the latter class. I believe a fact-based
national conversation about tax rates (individual and corporate, earned and unearned income and capital gains) would benefit the
nation. I am not optimistic this could occur without significant leadership.
Paul, I must plainly admit, not too often do a shed a tear when reading, your article today was such a moment. It was on a
sidewalk in Paris or New York to celebrate my daughters birthday, that surfaced as I read on. Pretty sure it was Paris, as we
walked along, I noticed a family. I looked only at the father - sitting on some cardboard, his two children and his wife beside
him - I gave what i could and his eyes spoke thanks and my eyes spoke hope for his obviously wonderful family(and himself as well).
Paul, as the good man said "the times they are a changin" and I believe with all my heart that Equality really needs to be spoken
of at many dinner tables. Sincerely, Peter
Very interesting how AOC understands economics in this country, and how many GOP'er bugaboos are about to get skewered :) Why,
we might even find ourselves in a public discussion of democracy and unrestrained capitalism being polar opposites, with GOP'ers
having to admit there was democracy in this country - which heavily restrained capitalism - long before the vaunted animal spirits
of free marketeer piracy descended upon us. As in, democracy provided the environment for capitalism to succeed, not the other
way 'round, and that democracy should take precedence over free marketeering piracy. After all, the original settlers and colonists
only allowed corporations to exist with charters which had automatic expiration dates, corpoorations were only allowed to exist
for the purpose of some public works project, and a corporation's charter was immediately revoked if it was found to be trying
to influence a political campaign; in no sense of the word were corporations people, too, my friend (quoting a famous American).
My, my, my, what an interesting history discussion is about to occur - could Elizabeth Warren please be the Professor, Professor
Professeur K. ?
Hate to disagree, but there's clear evidence AOC doesn't understand economics. For instance, she has argued it's impossible
for her to find affordable housing in Washington DC. Whereas it's become plain that she is living rent-free in the heads of many
Republicans.
@Red Sox, '04, '07, '13, '18, The rich that benefit from profits of large companies, like Walmart for example, do not do the
actual work themselves. Instead they rely on the working poor to create their profits and then they hoard it all, while the rest
of us provide money for food stamps etc.
@Kenneth Johnson The 73% rate would only be on income above a stipulated amount, say $10,000,000 a year. Are your yearly earnings
above $10.000.000 a year? The problem with unregulated capitalism is that it leads to people eventually wanting to impose an unrealistic
form of socialism. Experience strongly suggests that a mixed capitalist-socialist economy is as good as it gets.
@MV "Those who get that little extra $1,000 will easily spend it on a necessity, like an appliance". Exactly. And, given the
tax giveaway the Republicans gave to corporations and the 1% last year, there probably won't be that little extra $1,000 for the
appliance buyers this year. They'll probably owe.
@SandraH. Exactly. Impose high marginal rates on capital gains at the same time. We could make them a bit lower than income
tax rates to incentivize capital investment. But now, even with low income tax rates, the difference between capital gains and
income tax rates is a scandal--basically a fat loophole for rich capitalists.
@Billy Walker How much of Jeff Bezo's (for example, nothing against him specifically) billions in annual income would have
been possible without the existence of the interstate highway system? How about without the existence of the US postal service?
How about without the internet (it wouldn't exist without DARPA's pioneering research)? Seems to me the government and US taxpayers
were equal partners (or greater) in his earnings.
I would be more inclined to not laugh at Ms. Ocasio-Cortez if she had articulate and well reasoned thoughts. Instead she spouts
leftist talking points and when asked for detail or context she almost always struggle to provide it. But because leftists like
what she is saying they give her credibility just like Mr. Krugman.
My father was a CPA during the years from 1947 to 1983. We had this discussion about tax rates early on when the highest rate
(during the Eisenhower administration) was 90%. When I asked him about it as a child, he said simply that no one paid 90% of their
income to the government. First of all the tax code had many more loopholes than later on, and secondly, he taught me the idea
of a "graduated tax", which we still have on the books. All of us pay 10% on the first 15,000 or so that we earn, then 12% on
the next 10,000 or so, then 15% on the next, and so to the top rate of 36%. The problem, as AOC and Prof. Krugman point out is
that those at the very top of the income scale pay practically nothing compared to those below. The same is true when speaking
about the Social Security tax (FICA) which is something like 6% of you pretax income and is capped, at I believe, around 128,000.
Which simply means that if you make 100,000 a year your paying 6000 into the system, if you make 10 million, your still paying
only around 6000 into the system (or about 0.0006%).
So much greed by these socialists. No, you do not have a right to someone else's properties simply because they have more than
you do. The rich already pays an oversized amount of taxes, while the bottom 50% pay zero in federal taxes. That does not sound
fair. In America, everyone is free to start a business and make money, and most billionaires in this country are self made. They
worked harder than anyone else. Bill Gates, for instance, started Microsoft at age 18, when most other guys his age were wasting
their time at meaningless night clubs. He worked hard and long, and for ten years, did not take a single day off from work. Eventually,
it began to pay off. The the greedy socialists came out of the woodwork, demanding to "tax the rich" to pay their "fair" share.
Well, the rich already pay more than their fair share.
The comments to this piece have reinforced my belief that a sizable portion of American taxpayers do not have a clue as to
how the calculation of their federal tax bill is actually structured. At the very least, the term "marginal tax rate" is synonymous
with "total tax rate" for most. To those who are trying to effect a sane change to our country's taxation policies, I say you
need a structured PR campaign to raise awareness of just what the heck "marginal tax rate" actually means. You could start by
showing how, even under current rates, it's possible for someone making an average income (Warren Buffett's secretary?) to pay
a higher effective/total tax rate than someone (Warren Buffett?) whose income puts them in the top 0.1%. If you don't believe
me, next time you're discussing taxes with friends, ask them the following math problem: John's adjusted gross income is $1M;
The top marginal rate on that income is 37%; How much tax does John pay? If the answer you get is, $370k, well, that's my point.
Most people won't say that there's too little information given to solve the problem. (This is, the current top rate on that income,
by the way.) Once a sizable majority of Americans actually understand this, getting the support to enact a top MARGINAL rate of
70% shouldn't be too hard of a sell.
@Charlie in NY The Scandinavian countries are facing a whole lot less difficulties than the US. The military spending argument
is a red herring. The US deal with NATO is/was that the Europeans would provide the cannon fodder for WW3, while the US would
provide the nukes and high tech systems. This allowed the US to funnel money into the defense industry, while not maintaining
as large an army as would otherwise be required. Back out of NATO, and all those European countries will "go nuclear" as fast
as they can buy the technology from Israel. Is this in the US's best interests? We didn't think so after WW2. The saying was:
NATO was designed to Keep the US in, the Russians out, and the Germans down.
@Freda Pine the top rate 70% would not apply to you and if it did, the author of this opinion piece and most of its supporters
would likely agree that you should not pay anywhere near 70% if you are making 300,000$
"We can have democracy in this country or we can have great wealth concentrated in the hands of a few, but we can`t have both."
--Supreme Court Justice Louis D. Brandeis A fundamental reason for higher tax rates on the rich.
I think it would serve progressives well to clarify their rhetoric and policy proposals and speak about raising taxes on the
ULTRA RICH? I think there are many people who might be considered "rich", who already pay quite a bit in taxes, but aren't earning
enough to engage in the complicated tax-dodging schemes that the ultra rich use. They bear the brunt of a tax code that allows
ultra rich earners off the hook while they pay a lot in relation to their earnings. I know many upper-middle class people who
might otherwise agree with Democratic policies, but when they hear "tax the rich" they vote Republican because they can't imagine
paying more in taxes. It's the Jared Kushners of the world who should pay more, not the small business owner with a few million
in a retirement portfolio.
A more pedestrian way to view Prof. Krugman's argument is to compare social unease and income/wealth distribution during what
many, including conservatives, regard as the nostalgic fifties (fifty years ago, they commonly were labeled the fabulous fifties)
with those of today. The 1950s, while it certainly had its problems and the civil rights movement still was in its nascency of
emerging from 150 years of overwhelming oppression, nevertheless marked a decade of arguably America's most prosperous period
when the prosperity metric is distributed proportionately across all socio-economic classes. The wealthiest lived very well indeed.
Private railroad cars still adorned rail lines before the advent of private jets. While extreme poverty existed, especially among
urban blacks and other minorities, and some rural communities, for the most part, the vast middle class was progressing and living
comfortably. Top-tier marginal tax rates for large corporations and the wealthiest hovered close to AOC's proffered 80%. Most
importantly, large corporations still operated on the principle that they were accountable to their stakeholders, i.e., investors,
employees, customers, suppliers and communities, not solely to shareholders. Companies offered retirement pension plans rather
than 401ks and they honored them. Management was compensated reasonably for their services, not with get-ultra-rich schemes that
were backed by ludicrous fail-safe parachutes for malperformance. AOC is right.
@hammond Look at the dates on the graph, the high growth came AFTER 1960. Which war are you thinking "supercharged" the manufacturing
sector? As far as causality and causation, gee wiz, this is a newspaper, not an academic journal, the man can only give so much
evidence without losing readers. For a more complete presentation, read Jacob Hacker, "American Amnesia: How the War on Government
Made Led Us to Forget What Made America Prosper." Government investment is critical for high growth rates, and the wealthy need
to pay taxes for that to happen.
@Jason The rich do something wrong every day. From the perspective of someone concerned with labor rights, which perhaps you
aren't, they receive compensation vastly disproportional to the amount of labor they expend, and outrageously disproportional
to the amount of labor expended by people who aren't rich who work equally long hours and make similar sacrifices. That is what
is wrong with the notion of a free market. It is immoral and unethical, and you have to put an academic faith in the superiority
of the free market system above your concern for what's right in order to participate in a system like that, and most of us either
do or simply don't have any choice in the matter. Not everyone cares about that. From the perspective of someone who is just concerned
with incentives and outputs, who has bought into the notion of a free market system, what is wrong is that, as Krugman points
out, we don't operate within perfectly competitive markets, not even close. From that perspective, the rich profit from a system
that naturally favors them completely independent of variables like labor, risk, demand, etc. I don't guess you have to go to
confession for having done something wrong, but a little humility and perspective never hurt.
@Bruce Rozenblit " To top off the entire royalty thing, much of their wealth was most likely generated from tax breaks, tax
giveaways, tax shelters and the like. Odds are that a substantial portion of their wealth was never taxed to begin with and with
the loss of the estate tax, they get to will it to their heirs tax free." Example #1. Trump and his family. Example #2 Mitt Romney,
whose Bain Capital wealth derived from tax breaks earned by bankrupting once solid corporations and raiding their pension funds,
etc, then delivering the bill to the tax payers to pay through the Federal Pension Insurance agency and other tax payer funded
sources like welfare, Medicaid and unemployment insurance for those who lost their jobs and benefits.
Bravo, AOC. Hopefully this will mean growth in the middle class. Many of the very wealthy don't like to admit that their wealth
was largely contingent upon economic and tax policies that drove many from the middle class down to have-not status. Hopefully
this kind of policy will right that wrong.
Squeezing the top 5% will not be enough to fill the Federal coffers. The super rich have superbly qualified accountants. In
our borderless economy, tax havens and loopholes galore to attract and retain rich folks from all over the world. They exist right
now but the incentives to hide from Uncle Sam are far less than the overtaxed, nanny states of Europe. Cortex the conquistador
needs to earn money on her own by working first, pay taxes, meet payroll or know people who are not on the doll in order to understand
taxes make the wealthy flee. And, investment will sink. Talks like this has already made her the East Coast counterpart of the
elder stateswomen of stupidity, Rep. Maxine Waters. It is hard to recover from absurd public pronouncements that are etched in
hard disks forever.
A 90% tax rate on anybody doesn't seem to be a fair number. Nor 80% or 70%. Sorry but how about institute a luxury tax penalty
on corporations who give out huge CEO payouts. Works for the NBA
The unstated but glaringly obvious assumption in Paul Krugman's and Sandy Ocasio's worldview is that "The Rich" are not citizens
and human individuals with their own rights and interests, and families for which to care, but rather livestock to be farmed,
milked, and slaughtered for the sustenance of everyone else -- under the wise instruction of Paul Krugman and Sandy Ocasio, of
course, who as the will not be required to make the same sacrifices they demand of their fellows amongst The Rich. It's appalling
in its entitlement. No thanks, Comrades.
Diminished utility? How can they get that fourth mansion, complete with a set of cars and matching clothes in the closets of
all houses? How can they get a second, bigger yacht? How can they get that private plane upgrade? That costs tens of millions.
That is their utility. It just comes with much higher price tags. They need those things to be "part of the world" in which they
live. That is how they can lend a plane or a yacht to a politician. It is how they show they are real people, not just those little
tax payers. Readers may think I'm exaggerating here. I'm not. That really is their world. We are so far outside it we never see
it, but it does leak into the press, only to be hushed up. Remember Mitt Romney's car elevator? That was paid for with the retirement
funds of workers stripped out of closed companies wrecked by Bain Capital, a vulture capitalist firm. They have no retirement,
but he's got a car elevator. Utility.
Luke 12:48: "For unto whomsoever much is given, of him shall be much required." You'd think all those good Christians on the
right, even if they are not that much into economics could find some direction from the New Testament. Trickle Down is a Big Con.
The president is the Grifter in Chief. And the GOP knows it. They just don't want to kill the orange goose that laid their tax
rates (among other things).
Assume the Republican congress had drastically cut taxes on everyone named Howard (either first or last name). Our extra spending
would have stimulated the economy and created jobs. Could the reason that Republicans did not do this is that we Howards did not
band together and give the Republicans massive campaign contributions? If we had, I am sure the Republicans would have claimed
that the tax cuts to the Howards would have paid for themselves. This is the intellectual depth, or lack thereof, at which the
Republican Congress operates.
The unfortunate truth is that there are really three kinds of Republicans when it comes to tax policy. The ignorant; those
who have "faith" in the conservative shibboleth that low taxes drive growth and everyone benefits. Like most faithful, they deny
facts and endorse lies that support their superstition. There are the brainwashed; people who might be capable of rational thought,
but have been reciting the low tax mantra for so long they've stopped thinking about it and just repeat it from rote. Then are
the cynics; people who actually know they are selling snake oil, but don't care because it is so lucrative to them and their financial
supporters. These are the worst. They knowingly create misery and decimate the middle class for own economic advantage. It is
time to put an end to Republican rule.
Never-mind the validity of Alexandria Ocasio-Cortez's positions, which I totally support, but it's hard to understand the right's
hysteria surrounding AOC, until we remember their similar hysteria surrounding Barack Obama. Let's not forget that he was a secret
muslim who was born in Kenya and secretly wanted to take away our guns. What most irritated them was the fact that he was an articulate,
charismatic, highly educated man who was BLACK, and try as they might, they were unable to make the lies and stereotypes stick.
Now, we have an articulate, educated WOMAN who is HISPANIC, and they are breaking out the same tired bag of tricks. President
Obama, both because of his character but also because he was highly conscious of the image he had to portray being the first black
president, was always diplomatic and tended to ignore these racist attacks. AOC, however, grew up during the Obama years, and
she saw what that battlefield looked like. I love the fact that she always fights back, quickly, intelligently, and bitingly.
And each time she does, she shows up her critics as the hypocrites they are. Bravo.
@Freda Pine I'm thinking you have absolutely no idea how taxation works. No one would pay 70% on their income. They'd pay 70%
on income over $X, which in AOC's instance is $10 million. But... let's take your wrong approach and say it's a flat 70%. You
wouldn't "get out of bed" for $3 million? You must be quite rich. Not only would I get out of bed for $3 million, I'd show up
early and go home late. At $300,000, you would be paying about 30% as a GRADUATED tax, not flat. Please, if you're going to post
on this stuff, at least familiarize yourself with the BASIC concepts in taxation, like marginal versus effect rates.
I don't give a hoot about female, of color or young. If she has solid ideas, that's all that counts. If taxing the billionaires
works, I'm all for AOC. Personally, if you look at politicians for entertainment value, I much prefer her roof top steps to watching
a mouth unconnected to brain standing in front of "that dump" the White House.
@Payton Some politician's pipe dream legacy project... you mean like a certain Border Wall? And everything you've talked about
with wanting to keep track of money - X% in Education, Y% for Healthcare, Z% for Military Spending, is written down in the form
of the Congressional Omnibus Spending Bill, passed every year. It dictates what money goes where as a combination of smaller appropriations
bills. I suggest you read it. You might learn something. I would rather trust a (functioning) government with my money than a
collection of wealthy private individuals or corporations, because I can participate in government. I can vote my President out
of office.I cannot do anything to tell Tim Cook, or Jeff Bezos, or the Waltons to use my money more efficiently, or that I disagree
with what they're doing. Conservatives love to whine about government inefficiency any say the private sector does it better,
but that's simply because the private sector cuts corners to do it faster and cheaper. Those cut corners get people sick when
water infrastructure breaks down prematurely due to mismanagement by a private utility company, or a large farm corp dumps its
waste into the river system instead of going through proper disposal procedures. The government is not necessarily inefficient
- it is Thorough.
@Billy Walker With all due respect, Mr. Walker, if taxation is theft, it is theft regardless of the percentage taken. Your
notion that taxation becomes theft at a certain percentage is... just your notion.
@Mjxs "When did we begin to believe that mega-millions to CEOs will magically transform into wealth for all...?" We don't believe
that, but we've been told that we do. Additionally, some of our less useful democratic institutions--the Senate, the electoral
college--guarantee ongoing, electorally unearned power to the side that propagates this falsehood.
@SJP. In fact the EU and Scandinavian countries are facing great difficulties bordering on stagnation or worse in some cases.
It is also useful to recall that since the end of WWII, these Western countries mostly outsourced their military defense onto
the US - that huge savings was what underpinned their growth.
@George There's nothing like an anti-tax conservative who didn't even start fact-checking his own ideological prejudices ...
The wealthiest 1% don't have a $200k income, but at least a $390k income, with an average of $1.5 million. Now can you please
explain why asking billionaires to start paying back the debt (in part caused by massive tax cuts given to them, by the way) so
that people who were never lucky enough to earn so much can at least have access to decent healthcare and education would be a
bad idea ... ? How about putting America first, rather than the wealthiest 1%? Any objections?
November 2018 has Come; 2020 is Coming Vallejo Jan. 6
It's great to see that the age-old competitive male trick of casting every smart, well-spoken, attractive, or youngish woman
as a dumb "nit-wit" has lost its power. People who aren't unsuccessful right-wing males know that such men are simply frightened
by ambitious, smart, up-and-coming women. And, at long last, today's ambitious, smart, up-and-coming women are not one bit intimidated
by men who insist on taking absurd potshots at them. This is wonderful progress! Go Nancy, go AOC, go freshman House Democrats!
@Freda Pine: No, economists are not physiologists. They're not philologists or entomologists either. So what does physiology
have to do with any of this???
@Kenneth Johnson You are missing lots of things, including the fact that under such a system there would be more tax brackets
for higher incomes (rather than one bracket for all incomes over $500k.) And the tiered system would still apply, so the 73% rate
would only affect income above a certain amount. Re: moving out of the country, if your income is being generated in the US, it
would be subject to US taxes. Maybe use your affluence and tax savings in Texas to educate yourself?
Let's see if we can understand why tax cuts for the Rich or more generally, income and wealth inequality, is bad for the economy.
Economists have a concept called the velocity of money. It is the frequency, how often, that money changes hands in domestic commerce.
Here's an example. Suppose the government gives Scrooge McDuck a Billion for advice on the comic book market, If Scrooge puts
the bucks in his basement, and forgets about it, that doesn't help the economy at all. That Billion has a velocity of 0. Also,
if Scrooge loses a financial bet to Daddy Warbucks, and the Billion moves from Scrooge's basement to Daddy's, that is a change,
but the velocity does not change because it is not a useful change. It doesn't affect commerce. Money going to the Rich has a
lower velocity than money going to the non-rich. The Rich spend a lower percentage of their money. What's a guy or gal who already
has so many houses he can't remember how many & an elevator for his horse gonna spend his money on? The answer is he is going
to use it to speculate.There is a correlation between inequality & financial speculation.
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1661746
Speculation is bad for the economy. That money has a very low velocity. AND it increases risk which we have seen in 2008 ain't
a good thing. Since 2007, the velocity of money has plunged.
https://fredblog.stlouisfed.org/2016/04/a-plodding-dollar-the-recent-decrease-in-the-velocity-of-money /
I own three businesses and I as I write this on a Saturday night in a hotel away from my business trying to expand it I can
assure the professor I would not be doing this at a 70 percent tax rate!the ivory elite economists who write this drivel has never
owned a business created one job or made one payroll. Did you just see the last jobs report the growth rate after trump cut taxes
.
@Fourteen This sense of entitlement by the white patriarchy is rooted in America's original sin. From an essay I wrote in 2016:
"Now, there are three things that we must deal with and we're going to transform this neighborhood into a brotherhood. We've got
to deal with the problem of racism. We've got to deal with the problem of economic injustice or poverty. And we've got to deal
with the problem of war."" The issues King delineated for his audiences in the months leading up to his assassination are the
very same issues present day candidates are grappling with – the only difference is that in the intervening fifty plus years,
the three fundamental problems identified by King have grown exponentially. Inequality is far wider today. Today's poverty is
far deeper and encompasses a much wider segment of America's population. https://wp.me/p2KJ3H-1Tb
Nothing can change until we have truth, reconciliation, and reparations because if it is OK to go on without apologizing as a
nation, then it is OK to go on exploiting the classes in cycle after cycle of economic ups and downs and cycle after cycle of
racial divide and conquer.
I read this article as I sit on a patio at my Airbnb in Maui, looking out across the ocean. My girlfriend and I worked hard
and tucked away any extra pennies we had for this vacation - doing so for a couple years. We are here to celebrate her 30th birthday,
and it feels rich and lovely because this trip was hard-earned and marks a goal accomplished. It is unlikely we'll take another
vacation like this for quite some time. The thing that strikes me the most as I read this article is that I sit here looking across
the water toward the island of Lanai. Larry Ellison of Oracle owns 98% of that Hawaiian island (where the Dole pineapple plantation
used to be). It is not a small island. Why do the rich need such things? Why is it reasonable to say that an individual man should
even be able to purchase such a lavish, absurd amount of this beautiful paradise (and then only really allow the extremely wealthy
to visit at the Four Seasons there, where a "bad" room runs over $1000 per night)? Why? The rich are not taxed enough.
I'm not sure if this is still strictly true, but as of a couple of years ago the richest woman in the USA was the widow of
one of Sam Walton's (i.e., Walmart) sons. In other words, the wealthiest woman in America was the heiress of an heir of someone
who actually created a business. In case that isn't quite clear, the richest woman in America is someone who never, as far as
is known, never did a lick of actual labor in her life. What is utterly astonishing is how many people have been brainwashed to
believe our system is actually a meritocracy, and taxes on the wealthy are taxes on people who earned their wealth by the sweat
of their brow. . .
@Socrates The Rich have rigged the system to favor themselves against us. They don't know how to make money the old-fashioned
way. They'd be lost in a competitive market. Instead, these Takers live in an alt-reality echo-chamber slapping each other on
their backs for being "Makers." The Progressives see them clearly as parasites.
"...Republicans almost universally advocate low taxes on the wealthy, based on the claim that tax cuts at the top will have
huge beneficial effects on the economy." Trickle-down economics, voodoo economics; when will people stop accepting this drivel,
which was disproven by Reagan? As for the average middle-class American, what I find remarkable is that most people want lower
taxes AND more services; I read letters in Newsday about it all the time. Totally illogical.
@Andy The quote that comes to mind is, "It is difficult to get a man to understand something, when his salary depends on his
not understanding it." - Upton Sinclair
@Bruce Rozenblit I would add another prime motivation beyond wealth and power and control. For those with wealth and power
in excess of what they could ever need, why do they continue to arrogantly pile it up regardless of the cost to others? I believe
it is fear - the fear that people will object to the imbalance and try to right it. Great wealth and power engender insecurity.
The Rich are afraid of us.
@Plennie Wingo, true. Our first tax reform should be to tax all income at the same rates. We should also eliminate different
tax schedules for tax payers, depending on their marital status.
@Barking Doggerel Yes and no. In today's world, male privilege has given you that view. However, and this is not a small point,
that is YOUR view. In reality, MOST people at the top marginal rate that *I* know are not merely CEOs. The people that I know,
peeps that would qualify for this tax hike, are the upper managers, high wage earners, typically at the height of their career.
They tend to be first generation high earners...otherwise they would not need to work in this manner because their investments
would otherwise feed them. They do not have independent wealth but they are trying desperately to accumulate it. Because they
typically live in one of the two coasts, they tend to have high property taxes and a high cost of living. They have the means
to pay for their kids education, but they worry about their children ability to build on their current success. In my experience,
the high earners I know come in different flavors and nationalities. They only thing they all have in common is achievement: academic
and economic. But I will tell you something I do know about the CEO types and they don't grow on trees. Try and recruit talent
and not pay them. You won't be able to.... and it will make a difference to the bottom line, because I have seen it. This plan
will push down the upper middle class down the way that the GOP already decimated the other middle class. To combat income inequality,
close the "Mitt Romney" loopholes.
The wealthy CEO's don't even work an extra hour for that extra $1,000. They just negotiate for obscene amounts of compensation
that they cannot in any way spend. There was a study awhile ago - I think I read about it in the NYT - that suggested that a higher
marginal tax rate might reduce the incentive for CEO's to negotiate for higher and higher compensation, because that would bump
them up to a higher marginal tax rate. If that is correct, then corporations would have more to pay ordinary workers, and income
inequality would be reduced.
@Gwe, frankly, I think the executive management of American companies back in the 1950s and 1960s were more competent because
they were better at balancing the needs across a number of constituencies. Even after adjusting for inflation, they made much,
much less. Now THAT'S value! What has changed is an attitude of me-ism that an older generation that had to survive WWII and the
Great Depression did NOT have. Unfortunately, that sort of zeitgeist died with them and the country is poorer as a society for
it.
David Andrew Henry Chicxulub Puerto Yucatan Mexico Jan. 5
Paul, in your previous column you noted that corporations were sitting on a mountain of savings. The money is mostly in foreign
banks, because the corporations don't want to bring it home, because they can't find good investments. I recently visited with
a retired Canadian banker who said his best years were when he was working with young entrepreneurs...contractors, builders, small
business owners. He watched them grow and helped through some of the rough parts. Is there something wrong with today's bankers?
(Everyone please revisit The Big Short) Back to today's tax story. About forty years a go I needed three American engineers with
experience we couldn't find in Canada. They didn't want to come..."taxes are too high." I explained that their private health
insurance was a tax. When we factored in the cost of US health insurance they would have more after tax income in Canada. They
came to Canada. Please continue to write about taxes. Thank you. Ancient Canadian economist In a Mayan fishing village
My dad owned a small business on the Gold Coast of L.I. during the 60's which catered to old money WASPS whose wealth was taxed
at upwards of 90%. However, they all "summered" on L.I. or Cape Cod, had homes in Manhattan, Paris, London and yachts in the Caribbean.
And, as a middle class young adult, I was able to attend community college for $50 per semester. That's when we had real upward
mobility, a dynamic economy and a strong middle class.
Who is this "The Rich"? Let's face it, it's sort of a Boogeyman. The REAL tax amounts come from BUSINESSES. BIG BUSINESSES.
And that's who should be taxed and taxed well. There shouldn't even be an individual income tax. Everyone's income comes from
a BUSINESS one way or another and should be taken out and adjusted for on the Business end. And as we know Business just got a
HUGE break under Trump and the Republicans.
As Mr. Krugman is often fond of saying: "Your spending is my income, and my spending is your income." Or, to quote Barack Obama
in 2008: "When you spread the wealth around a bit, it's good for everyone." For his quote above, Obama was eviscerated by the
Right for "advocating socialism". Of course for those who believed Saint Ronnie when he said, "It's all YOUR money" - ALL taxation
is "socialism". That would be the GOP's mantra if it wasn't for the military-industrial complex (socialism for defense contractors).
But I digress. The message behind both the Krugman and Obama quotes above is simply that we are currently on a political and economic
path to neo-feudalism (where the Lords own 90% of the wealth and we Serfs squabble over the remaining crumbs). By contrast, "everyone"
benefits from a European-style "social democracy" - where government actually "provides for the General Welfare" so the average
citizen doesn't have to worry much about food, clothing, shelter, education and health care. These basics are the foundation of
Maslow's "hierarchy of needs". Once these basic needs are met, citizens are free to concentrate their energies on "productive
pursuits" (whether that's earning more money or writing a symphony). And everyone (even the wealthy) suffers from far less stress
than in our current jungle system where most Americans literally struggle from paycheck-to-paycheck - just one illness or job
loss from total destitution. Yet we continue to vote for serfdom.
@Jason Let the wealthy flee and see if living outside of the USA on a daily basis holds much of a candle to living every day
in the USA (e.g., Seattle, LA, or NYC) to name a few. Good luck.
I own a small forestry company. Despite a competent tax preparer I pay well over 20% in federal income taxes. A large forestry
company (Weyerhauser) with billions in revenue pays 0% federal tax. AOC knows exactly what she is talking about.
@Thomas Zaslavsky There no way to create wealth other than inventions and discoveries that 20-21st century science has shown
us. All the other money making schemes are either rent seeking or exploitational. So the way we compensate scientists and scientist
makers (teachers, aides etc) is so flawed that our sustainable scientific growth is in jeopardy (check the time it takes a PhD
in biology to get a permanent job!). I don't see CEO any better than the scientists I've met in my life. The only difference is
that CEOs are uber competitive whereas great scientists are excellent collaborators. There will be no capitalism, only feudalism
without scientific discovery and inventions ... stop lionizing the CEOs.
It's time to end the salary limit for Social Security taxes. Also, people like Warren Buffet, who don't get a salary but make
their income from dividends, should pay into Social Security by a 'Payroll Tax' on dividends.
@Jason People and capital are not more mobile than they have ever been. The median income in the US has been stagnant for decades,
and the buying power of that income declines every year. This is happening as the ultra-rich see tax breaks and hundred-percent
increases in their income.
@Allan Reagan I've seen 100s of scientists who forego consumption, risk their life on finding truth (less than 1 in 10 PhDs
land permanent jobs in Academia presently) that in turn help move the 20-21st century machine into creating wealth for all. I
don't see them asking for 10 million plus to get rewarded. Einstein refused a pay hike at Princeton to $8K (present value $40)
but without him there'll be no internet, mobile phones etc for supposedly "self-made" men (yes men) like you to make money from!
We're all incredibly hard working like you (mothers, teachers, drivers, painters etc). You're incredibly lucky to make 10 million
plus! Modesty would be a nice gesture ...
I wonder what our country would be like if we had the same distribution of income by deciles as we had in, say, 1980 before
the Regan tax cuts and subsequent cuts. How much more money would people in the bottom three quartiles have in their pockets?
With more money to enjoy life, could productivity have continued to increase rather than decrease. I suspect with all of that
money in their pockets they would have consumed more, GDP growth would have been higher, there would have been less impetus to
drive work to cheaper labor markets in Asia because people could afford things from higher labor markets like the good old USA.
We would have more money to invest in infrastructure. We would have enough money for universal health care. So in turns out, I
believe, the Republican tax policy is just one big scam to create a landed gentry in this country, something I doubt the founding
fathers would be ok with having just gotten out of a country where the landed gentry were everything. And my having a universal
health care growing at GDP rather than 2x GDP, would would have a low cost and better health care system.
Please don't repeat what you wrote here. It is tragically WRONG though it is widely repeated! No one pays 70% on ALL their
income. Each tax rate applies ONLY to monies in that bracket. If a theoretical 70% applied to income above $10,000,000, and someone
made $11,000,000, then they would pay the rate of 70% on $1,000,000. Furthermore, if there is an exemption for the first $12,000
of income, and a rate of 5% from $12,001-$20,000, then you, me and our millionaire example would all pay no tax on the first $12k,
$399.95 on the next bracket and so on. The end result is what's known as the effective tax rate and that's the progressive part
of it.
@Red Sox, '04, '07, '13, '18, I think if you scratch them deep, many very wealthy people in the U.S. would like to see better
infrastructure, universal healthcare, more people in homes than on the street, etc., plus a progressive program to deal with climate
change. And if a logical, sensible tax proposal could be put forth, they would vote and help pay for it, slowing our nation's
slide toward becoming a third world country.
Progressive taxation is a fraud and unfair. Everyone should pay a flat rate; around 20%. There is no reason not to tax all
taxpayers with the same rate.
Jesse "Big Daddy" Unruh -- when he was California State Assembly Speaker ran against incumbent Gov. Ronald Reagan in 1970 promising
a confiscatory tax of 100% on income above $1 million a year. Unruh, known for his quip "Money is the Mother's Milk of Politics"
ran as a progressive populist against Reagan, who was re-elected with a decisive margin of 52.8% to 45.1%. Post-election Analysts
were surprised that working class Democrats rejected Unruh because they said they strongly opposed his 100% tax on all income
above $1 million annually. After Unruh lost there was an apocryphal interview with a taxi driver who said "if I make more than
a million a year I don't want the state taking it away." When the reporter asked the cab driver if he really thought he'd ever
make that much, the cab driver said "who knows, I might get lucky." Stamped on the politically modified DNA of too many working
Americans is the fable that everyone is just a sliver of luck away from tycoon wealth. It's a fantasy of American Exceptionalism
that explains the celebrity and allure of privatized wealth trumping common good and common sense. To paraphrase Marx: Money lust
is the sigh of the oppressed creature, the heart of a heartless world, and the soul of soulless conditions. It is the opium of
the people". To misquote the late Carter Ag Secretary Bob Bergland, "the rich know the cost of everything but the value of nothing."
Amen to that.
@Ron Cohen, exactly right. A reduction in incentive for the ultra-wealthy to make an extra million or two also can help reduce
the cutthroat nature of this economy & society. What would the rich guy have to do to add that extra couple of million? Lie about
the asbestos in his company's talcum powder? Ignore product safety standards to save on manufacturing cost? Fire a wad of people
and drive the remaining skeleton crew over the edge into stress-induced disease? Find a way to get that toxic waste off your hands,
say as an ineffective, downright toxic fire retardant for furniture and baby clothes? Anything society can do to lower the probability
of outcomes like those is a significant benefit for all.
"So why not tax them at 100 percent? The answer is that this would eliminate any incentive to do whatever it is they do to
earn that much money, which would hurt the economy." And yet, as both you and Thomas Piketty have pointed out, most of the wealth
being generated now is through investment, in other words making money from money. So nothing useful is being produced and these
people are not "job creators." Go ahead. Tax them at 100 percent.
@Matthew Carnicelli America isn't happier but rich Republican donors are. Republicans work for their rich donors, not for America
so the party is just doing its job.
@Mjxs Rather than restore the draft, have a national conversation on our outsized military, and its (our?) goals. Perhaps reducing
its budget significantly, instigating universal community domestic service for all our youth, and giving some of the savings to
repair our tattered safety net would get us to where we would like to be.
@Geoffrey Please read the comment from "Barking Doggeral," I think it answers your question. Basically, "super compensated"
does not equal super productive by a long shot.
I'll tell you how Ocasio-Cortez will perform as a member of Congress: She won't. She is too intelligent and her policies are
too sane and sensible to mesh with the crooks and corporate shills who control our modern political system. The people want wild,
outlandish, showbiz personalities, not a return to the stable social democracy that made us the greatest country in the world
during the 1950s. AOC may know how to use Twitter, but unlike Trump she doesn't know how to use fear and deceit to influence an
entrenched profit-driven plutocracy, and unlike Trump her ideas won't allow global megacorporations to consolidate their money
and control over us so any hope of financial support is out of the question. And her ideas concerning policy would promote America's
strength and stability, something that our foreign enemies will fight tooth and nail to prevent. With no corporate cash and an
army of foreign agents and their Republican employees undermining her, AOC's agenda will go nowhere. Furthermore, she will accomplish
nothing in Congress because there is no Congress. Trump has eliminated it. The shutdown is not a means to the end of building
the wall. The Wall fight is just a means to an end: Trump and his followers want the government to remain shut down. They want
to undermine our government and punish Federal employees by putting them out of work. Their motivations are resentment, spite,
and the driving need to hurt Americans. Trump's goal is two branches of government.
Imagine yourself a cardiologist making 900K a year. Now imagine taxing his income at 90% inclding state taxes. How likely is
he to get out of bed at 3 AM to do y our emergency angioplasty, since his income depends on aperformance based compensation model
and his sleepless night, before working the next day as well, isnt going to earn him beans a fter taxes?
Yes, but 80% -- holy cow! That just sounds outrageous. It's very bad optics if nothing else. How can the IRS agent, with a
straight face anyway, demand, "Okay, buddy, for the privilege of living here, you owe us eight out of every ten dollars you earn."
Really? Isn't that absurd overreach? No? It's fine with me personally: I'm poor, living on a modest Social Security check. It's
also fine with me if you outlaw booze and cigarettes, too, because I'm not a patron. I've no skin in these games. And I do love
the idea of financing our deeply in debt, democratic government and helping the poor, I'm one of them, but, yeow, 80%? That's
going to be a hard-sell just on the face of it, although I concede to the wisdom of my superiors -- the Ph.d. economists, especially
the Nobel-Prize winners. Just as I did when called upon to fight the noble Vietnam War. They know more than me, right? So, AO-C,
carry on, girl. You have the money gurus behind you, while this layman remains bemused, stymied, and not a little red-faced by
the paradox, appropriateness, and effectiveness of an 80% tax rate. Holy cow! Good morning, Vietnam.
"The controversy of the moment involves AOC's advocacy of a tax rate of 70-80 percent on very high incomes, which is obviously
crazy, right? I mean, who thinks that makes sense? Naturally, Krugman and the cocktail waitress/tax policy savant known as "AOC"
don't even bother to define what constitutes "very high incomes", which demonstrates just how poorly thought out their magical
thinking really is. Try again, Paul.
". . . a tax rate of 70-80 percent on very high incomes . . . is a policy nobody has ever implemented, aside from the United
States, for 35 years after World War II -- including the most successful period of economic growth in our history." I've been
waiting for decades now for someone to notice this. For several years during world war II, the top tax rate was 95%. It dropped
a bit at the end of the war, but by 1950 it was back above 90%, and there it remained until 1963. When vast amounts of public
money flow into private pockets in the form of defense spending, which has been the case since the 1940s, high marginal tax rates
are what keep public money public. Anything less amounts to a huge transfer of wealth from the poor to the rich. Which is exactly
what's been happening since the Reagan-Thatcher years. Call it "socialism for the rich". It's time to get back to the common sense
policies of working for the common good, and that means progressive taxation.
Paul.....Taxing the wealthy is the ONLY way to provide income equality to all Americans. The rich never, ever, make their money
without the Democratic Capitalistic system for them to operate within. The US infrastructure, the laws, the labor of the many,
and other common benefits to all businesses provide Americans the opportunity to build personal wealth. If the wealth Gap gets
too big, the many "have nots" will revolt. It's in the interest of the 1% to make sure the 99% is taken care of. It's a matter
of survival.
Currently the 1% own 50% of global wealth, they will own 66% by 2030. Left unchecked, they will eventually own virtually all
wealth, which reduces you and I to serfs, and is intrinsically unstable. The reason for this is simple: the return on capital
is about 6-10% while GDP growth is 2-4% which means that wealth will accumulate with those who own capital: aka: the rich get
richer. That is a systemic outcome. The solution is simple: tax at the top, invest at the bottom.
@Jason You clearly didn't read the editorial: Why is it that the Conservatives never articulate a policy proposal based on
factual analysis ? Because, much like Jason's suggestion that he would move his business out of the country & Jason's criticism
that the left's answer is soak the rich, has no basis in reality. Jason may or may not move his business but this of little consequence
as his 'income' would be distinct from business profit. & the notion that the rich are soaked is difficult to reconcile with our
current economic situation. The Far-Right seems to misunderstand how tax structure works & how tax income is used. Jason's suggestion
that the private sector applies superior critical thinking skills is belied by his comments & this is driven home by the mere
fact of his comment being an 'Times Pick'
@SJP The only country that has tried a marginal income tax rate above 55% recently (France, 70%) abandoned it as unproductive,
i.e. it wasn't collecting much because people successfully avoided paying it. That speaks more to me than what may be optimal
in theory. With state and local taxes added in, marginal tax in US blue states is already about 50%. An 80% tax rate is a political
fantasy, even in Sweden (total top marginal rate 56%)
It sounds like a strategy to discriminate against a minority group based solely upon the one characteristic that defines their
minority status - their income. No law-abiding group should be targeted for disproportionate, punitive taxation based upon their
income. The ultra wealthy, who broke no laws while attaining their wealth, should not be financially exploited after the fact
simply because the majority would like to siphon off their wealth rather than innovate and work for their own. Who are you, or
anyone else to say how much of a person's hard earned income is "enough for them" or to decide how "bothered" they will be if
you forcibly take the portion of their money you've deemed to be excessive. What have you done that entitles you to deserve any
portion of another person's earnings? I could find a large group of impoverished, homeless people who would feel that the middle-class
income you earn is too much for you and that you should be forced to distribute any amount over a subsistence income to them since
they are less fortunate than you. I doubt you'd be as quick to advocate for their claim to your money as you are for your own
claim to the money of the wealthy.
@Annie. "What if we stopped believing that government could fix all of our problems?" The US Constitution is written so that
the Federal Government provides for the common good. If we stop believing that, we might as well move to Russia.
Of course Repubs say tax cuts for the rich will benefit the whole economy---that's you and me. What else can they say---the
truth? That they want to confiscate our national productivity---meaning what you and me produce at work? Because it's their due,
as superior beings who call the shots? Then decide how little to pay you and me in return? Or that it's perfectly ok to send our
jobs away to low wage countries, and leave us to scramble? Can they say that they should dominate our govt like the aristocrats
of olden days? Those ones we overthrew way back when? No, would sound awful. So they and well paid consultants make up these economic
slogans---and millions believe them! And many go along with it to be in with the influential and powerful. The politicians taking
donor money spread the lie. The big con is to equate corporate wealth with Americanism and Freedom. They manipulate us with the
implied threat and contrast of a true Communist dictatorship where the govt owns everything. But as Krugman's favorite 2016 candidate
Bernie Sanders said---Yes, of course we want capitalism, but regulated capitalism! If elected govt doesn't regulate corporations
then the corporations will regulate the govt. That's what we have now, disguised. Btw-- PK says, " if a rich man works..." How
about if a rich woman works? Or rich person, Or rich people. Times have changed. Hard habit to break. Man is not synonomous with
humanity.
@Allan Reagan I had an accountant in my early days of entrepreneurship who wisely explained to me that paying taxes was far
better than not paying them. He was right, as I earned more income, I paid more taxes and became more successful so I could earn
more income and pay more taxes. Paying the 70% rate on your earnings over $10m means you already earned $10m. In a year. Now stop
complaining already.
@Billy Walker Regardless of whether we are talking about marginal rates, the idea that taxation is "theft" is something that
the wealthy have been pounding into the heads of the population for decades now. If that were true, then those that don't want
to pay taxes should not be permitted to use OUR roadways, or seek protection from OUR police force, or expect their trash to be
picked up by OUR sanitation workers. If and when a natural disaster strikes and your home is destroyed, please don't look to US
for relief. If you are in trouble in a foreign country do not look to OUR embassy. When you want to sue your business partners
or you get into an accident and need to sue the negligent party or even when you are arrested and accused of a crime, please don't
look to OUR courts for redress. If you have not paid for these services, please don't steal them from those that have paid. Also,
if you have a business, please do not steal the use of OUR railways, roadways, bridges and tunnels, postal system, shipping ports,
waterways, rivers, lakes, airports, airways, traffic controllers, etc. Because the more you are making, the more you will be using
OUR infrastructure and services. Get your own and stop putting such heavy demands on what is OURS. Freeloading rich people will
not be tolerated despite the fact that they are and always have been amongst the most self entitled people to grace this country.
Pay your taxes or stop stealing.
Eisenhower said that high marginal income tax rates on wealthy people and corporations was not socialism but sound economic
policy. He said corporations would pay a greater portion of their profits from increased worker productivity to workers rather
than pay an increased amount in taxes to government. For decades workers received annual increases in wages and benefits when
marginal income tax rates were high. Then Reaganomics was introduced which lowered greatly those marginal income tax rates on
wealthy people and corporations while raising payroll taxes on workers and businesses. The result has been no growth or loss of
real income for 90% of the country, a small to moderate gain for the top 9%, and a huge gain in real income for the top 1% of
income earners. Businesses gave bonuses to management for increasing before tax profits. They did this by reducing the growth
rate of wages and benefits and moving production to Mexico and China where wages and benefits and regulations are much less than
in the US. It has been goodbye good industrial jobs and hello to bad service jobs for the past 35 years. It's time to go back
to that which helps most people and not the top 1%. Goodbye to trickle down economics which has never worked to help the bottom
99%.
@Ellen All correct, our infrastructure has already become third world. Next time you're stuck in traffic under a bridge, look
up at the rusted steel and spalled concrete. I do this often because I've been involved with road construction all my life and
I'm aware of the collapse of our infrastructure. However, few people ever look up at a bridge when below it, and don't recognize
what they see. The politicians don't look either, but the engineers do.
What's good for the USA is good for General Bullmoose!! https://youtu.be/Kj65AcbekIE
I've been saying this for years. The wealth of the wealthy is founded upon and maintained by the prosperity of America's working
people. Those among the ±1%, and most especially the 0.1%, who are not sociopaths ("It is not enough to succeed. Others must fail."
~ Gore Vidal et al.) must realize that the best investment that the well-to-do have ever made in all of human history was in America's
infrastructure and its middle class during the 3+ decades following WW II. Even though at the time the taxes on the wealthy were
overly confiscatory, not only did it result in remarkable economic prosperity for all, including the wealthy, it also meant that
the wealthy could sleep safely in their beds and not have to cower behind walls and private armies for fear that their heads might
end up on a pike. Sadly, those days seem to be passing. A person with no hope can be deadly, so, as the people lose more and more,
the rich must, perforce, fear more and more. Some of them know that, and know better, but... "We must make our choice. We may
have democracy, or we may have wealth concentrated in the hands of a few, but we can't have both." ~ Justice Louis D. Brandeis
When John D. Rockefeller was asked once, "How much money is enough money?" He replied, "Just a little bit more."
It's not just higher tax brackets for the wealthy. It's also tax breaks on dividends as opposed to dividends as well as all
of the other tax breaks that rich people receive. It's also unaudited and untracked overspending on the military, subsidies for
fossil fuel companies, and all of that stuff. The result is that young people pay for their education for the rest of their lives;
roads, bridges, railroads, airports, water systems, etc., are in a state of advanced decay and our society as a whole is suffering
from structural deterioration. So good for Krugman and Ocasio-Cortez. It's about time.
Taxing the rich at 75% is a fools errand. President Holland tried only to see rich leave France. In a global economy, the rich
move, when taxed too much, (in their opinion) to where taxes are lower. It is just as lovely to live in London - with the source
of your income conveniently located in the Channel Island) then in NYC
@WPLMMT I am a liberal and a progressive and what I want is for the ultra rich to stop grabbing everything for themselves aided
by unfair tax laws and bought politicians. Write back in 2.5 years, WPLMMT, and see if your prediction about her longevity comes
true. I wouldn't take the bet, if I were you.
@Robert Orban Reagan did not do it. Volcker did it, with the approval of Carter, before Reagan became president, and continued
the same policy under Reagan.
@Ron Cohen A bigger contribution to the "why" is the changes in accounting rules on options and stock compensation. This plus
the SEC rule changes regarding advanced advice (forecasting company performance) have allowed executives to play the expectations
game and manage their payout.
Krugman,as usual,you are wrong.When you pay 70% or more in taxes;what is your incentive to work.The people taxed at the 70%
rate will leave,just like France.Then France reduced the tax rate.Cortez is an individual with scant knowledge of economics/taxation.I
find it amazing she grew up in affluent Yorktown Heights in Westchester County yet wants us to believe she's a poor hispanic from
the Bronx.
@Billy Walker Under Dwight D Eisenhower, taxes on the wealthy were much higher percentage. Ocasio regurgitated a Republican's
tax plan and called it her own. During Ike's tenure, those monies were used to build the greatest infrastructure America ever
built, and the last time America made any meaningful investment in our infrastructure - because Reganonomics paved the way to
decrease taxes on the wealthy and there went America's infrastructure monies. Why are you so determined to make sure the rich
get richer?
@Geoffrey "Why not punish the unproductive with high taxes as an incentive for them to become more productive".... It's rich
to imply someone making $20 an hour is unproductive as opposed to one born to the investor or heir class who may have never lifted
a finger or even earned their original wealth in the first place.
@Plennie Wingo When considering tax rates, the so called payroll tax should be folded in. Most observers of our tax rates seem
to forget that part of the deal. Since the government uses the payroll taxes collected no differently than it uses any other funds
collected, I think it would be smart to get rid of it altogether. Right now, the payroll tax, which is supposedly funding Social
Security and Medicare has a surplus every year and is added ludicrously to the national "debt." Let's get rid of all of these
fictions and start over so that the actual taxes everyone pays will be more equitable.
@Billy Walker So who cares about the data, history, experts- you know what you know. Our current tax laws have been written
by the rich & corporations. Do you think that is why they favor the rich & corporations with little regard to what is best for
our country? I do.
I think this quote by Mr. Krugman is a dangerous mentality to have for us citizens. "Or to put it a bit more succinctly, when
taxing the rich, all we should care about is how much revenue we raise." Boy could this logic justify some madness down the road.
Capital, and capitalists, can flee. It's why the Beatles left the U.K. in their prime. Remember "Tax Man"? Paul, you more than
anyone have spoken about the fact that capital knows no borders; it just seeks the highest return.
Isn't a major elephant in the room the amount of our taxes that goes to (Eisenhower's famous phrase) the Military Industrial
Complex? As Martin Luther King said :" A nation that continues year after year to spend more money on military defense than on
programs of social uplift is approaching spiritual doom."
@Allan Reagan: If you are making under $100,000, you won't be hurt by the higher tax rates Democrats, including AOC, are talking
about. AOC floated higher rates on income over $10,000,000. I think you are safe.
The future has arrived and we'll do anything to stop it dead in its tracks. AOC is a symptom of the future, not the full-blown
terminal illness lying in wait for the oligarchy. Beto O'Rourke may also be a symptom of this new dreaded epidemic. The GOP has
been doing this smoke-and-mirrors act with the economy for decades: the "job creators" who can't be taxed, the efficient markets
which result in a major financial catastrophe every ten years, the "competition" which only results in the consolidation of economic
control and power in the hands of a few big corporations (monopolists) and big banks. And the whole thing runs on free money -
zero interest rate policy - or effectively zero when inflation is factored in. We have a cult. A cult of "conservatism" which
is profligate, wasteful, irresponsible, fatuous, anti-scientific, anti-fact, and anti-intellectual. Cults work better without
facts. They're hostile to fact. And cults are dangerous like ignorance, and greed, and chicanery. Conservative = Insurgent. Up
= Down. Donkey = Aristotle. And doesn't it sell like hotcakes along with those $40 red hats...
Great idea, let's raise more tax money so that we can do truly productive activities such as flying dead ex-presidents and
senators across the country (several times) in 747's. Maybe they needed the security or were in a hurry to be buried. Then, of
course, look at the great value-for-dollar we get from military spending.
I don't need some 29 year-old who has never started a business, made payroll, created something that didn't exist before, took
the chance, made the investment, and suffered the many setbacks before the idea was a success to tell me how I should or shouldn't
spend my money. Taxing it is the same as saying how I should spend it. I also do not need an academic who has never started a
business, made payroll, created something that didn't exist before, took the chance, made the investment, and suffered the many
setbacks before the idea was a success to tell me how I should or shouldn't spend my money. Taxing it is the same as saying how
I should spend it. Both of these folks are sad examples of the "let me tell you what is best for you" paternalistic, liberal ideology
that we should all be very afraid of.
Professor Krugman, AOC is no flake and the Republicans know that. Trumpian Republicans are running scared of the new freshman
class of 116th Congress as it is the most diverse and educated ever. They are looking for ways to discredit these young, energetic,
and educated Representatives of the People who came/got elected to take back the Government from the Corporations. They promised
to make it work for all the people. Just to add one more item in your list of why we should tax the top 1% with a 70%-75% tax
rate is the fact that the utility of extra money to people with middle and low income is certainly very high as compared to higher
income folks/corporations. The marginal propensity to save is almost zero for extra money received as a result of tax cuts/reductions
in the lower income individuals, essentially they are going to spend all of it in the local economy to obtain the necessities
of life. This extra money spent in the economy would have a major multiplier effect in the economy. We do live in a consumer based
economy. The revenue generated by taxing the extremely wealthy individuals/corporations would go a long way to fund a lot of Progressive
ideas/values for our citizen. The freshman class of 116th Congress gives me a lot of hope for the future of our country.
@paulkrugman You have stated things I learned 65 years ago in my first economics class when good teachers were proud to say
the names like Samuel Gompers and the like. Thank you. You were right about the timing and prosperity that the US had in the period
after WW II. The US growth rate was doubling every 11years, as shown in graphs on The Guardian on 5 January. Only after Reagan
did the US begin a real spiral down in growth, but still ahead of all others except China. Real productivity increases are hindered
by some almost immovable obstacles; Greed by the rich, over weight among all groups and failures in educating/inspiring the masses.
The three are global phenomenons but only addressing the first can lead to having the wherewithal's to address the other 2. I
look forward to reading and following @AOC in her work in the future, she has great guts. I'm with her.
Mr. Krugman's citation of a utility analysis lacks a grounding in property rights, which arguably define and distinguish the
US from all other political economies. That said, if we want to use utility as the standard of value, then let's use rule-based
utility vs. act-based utility. On that standard, how have the socialist / communist / so-called "progressive" / fascist / generally
collectivist countries performed over the last 100 years in relation to the US? Who has flourished? Who has perished? If you are
in doubt, take a drive through a typical Pyongyang or Naypyidaw suburb and compare it to a typical US suburb. Also consider Moscow
and Havana; they love collectivist thought almost as much as the US academy. Earth to Mr. Krugman: human beings are more than
widgets in your economic toolbox. [No, not a Republican.]
If 'everyday' people had guaranteed healthcare, education for their kids and food on the table, they would not be so overwhelmed
with making and saving money. Whatever tax rate that requires on whomever could pay would be worth it
According to the late Nobel Laureate & Econ Historian Douglas C. North's "Structure & Change in Economic History" @ the time
of the collapse of the Roman Empire wealth was so concentrated that 6 senators owned half of North Africa, specie so concentrated
that trade was reduced to barter & the commercial economy collapsed. Serfdom was created to tie workers to the land. The Roman
legion still held a tactical advantage over their adversaries, but it had thinned, as a result the empire needed a bigger army
however the wealthy & powerful used their influence to avoid paying taxes; as a result the empire lacked the funds & the political
will to defend its borders @ a time when it controlled all the resources of Western Civilization @ a time when that included Turkey,
Syria, Egypt & North Africa as well as the best part of Europe against barbarians. Similar events lead to the collapse of Ancient
Egypt's New Kingdom, Byzantium, Mideavel Japan, Hapsburg Spain, Bourbon France, Romanov Russia, Coolege-Hoover America (triggering
the Great Depression, Hitler, WWII, the Holoust), oh, & BushJr America. Concentrated wealth destroys great empires, civilizations
& nations. Marx got in trouble for pointing out that industrial capitalism grows slower than the rate of wealth concentration.
The right likes to shoot the messenger. He was doing them a favor. High taxes & redistribution of bargaining power is needed to
stave off instability & collapse & hardship so vast you can't conceive it.
Really fascinating article and very informative. More please. What's the lowest rate in the US? When I started work in 1981
in the U.K. I paid 30%. Now down to 20%. Plus about 3% for national insurance which is income tax really but is meant to be hypothecated
to the NHS. I'm happy to pay some more to ensure the continued cohesion of our society. I don't know why some people find that
such a problem.
This ignores the fact that most people with a lot of money don't make their income in the form of a paycheck. What we really
need to do is return the tax rate on investment income, not earned income. That would also help end these wild swings and speculation
we see on Wall Street.
Appreciate the reporting, but NYT why not report on what Nancy Pelosi is saying or doing vs. a freshman in Congress? The Speaker
of the House has years and years of experience; is one of the few members of the government who has been recorded effectively
talking "back" to Trump; and as her daughter says, is someone who clearly knows what she is doing, so people (in America) can
sleep at night.
It's been clear since Ronald Reagan that tax cuts don't trickle down while workers wages stagnate. It's time to reverse course,
especially when Trump has nearly bankrupted the Treasury and Republicans have been shown to be hypocrites on deficit reduction.
It's time to address income inequality and provide funds for Medicare-for-All; an infrastructure program that will bring the nation
into the 21st century with high-speed rail and a modern energy grid that includes solar and wind; and prods states to return to
tuition-free higher education at state colleges and universities. A.O.C. is "right on the money" with a top bracket of 70 percent.
It's time to end the Trump kleptocracy and fully restore the graduated income tax.
Fascinating...an oversimplified correlation of two variables (tax rates and growth) to justify redistribution of wealth. "Hey,
Mr/Ms X, I know you earned your income based on the value of what you do in a competitive marketplace, but you don't really need
all of what you earned...so we the government, arbiters of wise decisions about how to spend money, are going to take most of
what you earned and give it to someone else." Poppycock.... Rep Ocasio-Cortez seems both nice and sincere; I'd venture to say
she's a very good person based upon her concern and empathy, and I don't understand the flawed tactics of the right in picking
on her extra-legislative habits (dancing, clothing choices, etc.) Her empathy and personality don't balance her terrible politics
regarding redistribution of wealth. As for economists -- Nobel Prizes notwithstanding -- the good ones are driving gorwth today
and not publishing opinion pieces based on poor economic theory
The point AOC (and, surprisingly, you) miss is that the kinds of wealthy people she wants to target with a 70 percent marginal
tax rate don't make their income from wages. They make it from capital gains instead. So, if she wants to create a more sustainable
revenue flow to the government, she needs to work on getting those rates up to reasonable levels. But capital gains have different
forms. The part that she needs to focus is on speculative capital gains, not investment gains. Short term gains resulting from
just flipping securities is gambling writ large, and there's no reason why the taxpayers should have to subsidize that risk-taking
with low tax rates for the flippers. Treating these gains as ordinary income is goodness, but only if that rate matches the higher
rate AOC wants. In fact, those should be higher than the top marginal rate, and expenses related to them should not be deductible.
(This should include carried interest, too.) Long term capital gains tend to create jobs, infrastructure, and retirement savings,
so those need to be encouraged with deductions of related expenses, and lower tax rates, too. In any event, I encourage AOC in
her thinking. We need to readjust our tax system to make it more fair to the taxpayers, and to stop the robber barons on Wall
Street from ripping us off.
@Prof Forgive me for not feeling sorry for the wealthy. They have benefited greatly under the system of government we call
the U.S., a system we all pay for. There are plenty of other taxes people pay besides federal taxes (excise, state, city, local,
property, etc.). They don't have armies of lobbyists, attorneys and loopholes to protect their capital. As for moving all of their
money offshore, good riddance.
@hammond Paul Krugman has written about the "Europe was Rubble" myth - the idea that the unprecedented creation of a large
and prosperous U.S. middle class, was only possible because of those special conditions.
https://krugman.blogs.nytimes.com/2012/11/19/the-europe-in-rubble-excuse
/ Here it is about tax policy, but it is also brought up as an excuse not to try policy responses to high unemployment, low wages,
etc. In addition to PK's arguments: First, the whole idea that we had faster growth due to having had trade *surpluses*, doesn't
make sense. Those surpluses actually required *more* output - not less. So, in theory, if Europe had *not* been rubble (dubious,
as PK points out), US growth should have been *higher*. OK, that is all based on theoretical supply side constraints. But what
about Demand? OK, now you have something. The trade surpluses increased demand (AD = C+I+G+(X-M). It is long past time to start
talking about aggregate demand, and how that has been creating a dysfunctional economy. Also, how destruction of the New Deal,
has allowed wages to stagnate, which has given us lots of low productivity jobs at low pay, reducing productivity growth through
compositional effects - but more importantly, making US poorer, less efficient, and with less job satisfaction. Workers can tell
when their job is really not valued. Finally, if indeed making low skilled US workers compete with foreign starvation wages is
a problem, we need to acknowledge and fix that.
One of the biggest myths out there is the one in which an individual says "I did it all on my own". The truth is, no you did
not. You had an education, passed down from other generations that made discoveries, you had paved roads, police and fireman,
an educated workforce, safe food to eat, clean water to drink. All things paid for by everyone. We should have high taxes that
are progressive. People use the misnomer, "The Government" to try and discredit as others the people charging the taxes. But come
on people, stop being stupid. Our constitution says "Government by the people for the people". We are our government. Anyone of
you, or I, can run for office. Enough of this fake individualism conservative fairy tale. We need to work together in order to
build a more just and perfect society.
You can put all the charts and graphs you want in front of people, provide all the historical evidence available, and provide
evidence of how things have never and are not now working the way Republicans say it has or will, and they still will refuse to
believe their lying eyes. The Republican experiment to fleece the middle and lower classes is ongoing and successful, in part
supported by the middle and lower classes' willful blind ignorance and devotion to self flagellation.
Please don't forget we are talking about the highest MARGINAL tax rate, e. g., the tax due on the income over $600,000 for
a couple filing jointly was 37% in 2018 and the same couple paid 35% on $400,001 to $600,00, and 32% on $315,000 to $400,000,
and 24% on $165,001 to ¥315,000, and 22% on $77,401 $165,000, and 12% on $19,051 to $77,400, and 10% on income up to $19,050.
What we need are more margins on the high end; to equate a $600,000 earner with a $10,000,000 earner is absurd. Nearly half the
top %1 of earners make $10,000,000 or more! Why should they be taxed at the same rate as someone making 6% as much??? A family
making $36,000 (6% of $600,000) pays a highest marginal rate of 12%, while the family making $600,001 pays a highest marginal
rate of 37% and a family making $10,000,000 pays at the same highest marginal rate of 37%! The incentive for the top .1% in this
set up is not to put money back into their businesses or employ more people, but rather, it's to buy off politicians dedicated
to keeping their tax rate on the bulk of their income ridiculously low! When the Koch brothers thanked Paul Ryan for passing Trump's
tax cuts it cost them $500,000 (in donations to Ryan), but gained them $1,000,000,000 to $1,400,000,000 in reduced taxes. See
how it works? Forget about the 1%! Go after the .1%!!!
As an affluent retired person, I left New Jersey for Texas, where I'm originally from. With 'an optimal tax rate of 73%', I'll
be leaving the USA. I can still spend 182 days a year here. Let them tax those affluent people who must remain behind. As Margaret
Thatcher said: 'The problem with socialism is you eventually run out of other people's money'. Or am I missing something here?
Love the fact that the article is punctuated by a slick advertisement pushing sales of $13 million co-ops. Does Krugman think
that high-earning W-2 taxpayers will continue living in New York City, or even the US, when rates are 70-80%? France tried this
just a few years ago; it was an instant failure resulting in a quick exodus of the country's largest taxpayers. Krugman is living
in the fifties. We are now a globalized economy where capital and human resources are far more mobile.
I will quibble with one small and tangential claim in this article. Krugman writes that additional taxes on the very rich will
not affect their life satisfaction, since they can still buy what they want. This is not always the case. Many of the very wealthy
want to buy more things than they can afford. And some, not just the Koch family, want to buy the government. They pour billions
into the attempt. And as it happens, that's another reason for increasing the marginal tax rate on the very rich.
Why not tax labor lower than capital gains? Labor will have more incentive to work because they can keep more of what they
earn. People who live off capital will just keep doing what they are doing. I doubt they'll rush out to get W-2 jobs. We're tried
the reverse for long enough, let's flip it around and give the majority their turn.
As a recent retiree, I was surprised to learn that my husband and I wouldn't be paying any taxes on our substantial capital
gains, dividends, and interest, as long as we kept below the ~ 77,000 income level. We're living on current cash and taxable accounts,
and are fortunate not to need to sign up for SS until 70 1/2 nor pull from our retirement accounts (except to fill up the bracket).
This is basically ridiculous. We're affluent, not Uber-wealthy, but certainly can afford to pay more than the piddling amount
that we've paid the last couple of years.
A country where taxes are basically fair and social programs give people, all of them, basic security, is a calm and efficiently
working society that does not have regular massacres in schools and churches, and does not have a restless and frustrated public.
and so on. there is a country like this next door. The contrast with the disfunctional US today is striking.
Equality. That is a necessary component of civilized society and democracy. You have to have a certain level of equality. Freedom
to become a billionaire is not good for America or any country. Community, compassion, belonging, love, equality. Not selfish
riches.
@Jay For the full context, the 1999 Gramm–Leach–Bliley Act was authored by three Randian Republicans from Republican-majority
Senate and House. While Bill Clinton should not have signed it, Republicans authored it. In April 2003 - under the Bush Reign
of Error - the attorneys general of two states went to Washington with a stern warning for the nation's top bank regulator. In
the Office of the Comptroller of the Currency in Wash DC, the AGs from North Carolina and Iowa said lenders were pushing increasingly
risky mortgages. Their host, John Hawke, expressed skepticism. Roy Cooper of North Carolina and Tom Miller of Iowa headed a committee
of state officials concerned about new forms of "predatory" lending. They urged Hawke to give states more latitude to limit exorbitant
interest rates and fine-print fees. "People out there are struggling with oppressive loans," Cooper recalls saying. Hawke, a veteran
banking industry lawyer appointed to head the OCC by Bill Clinton in 1998, wouldn't budge. He said he would reinforce federal
policies that hindered states from reining in lenders. The AGs left the tense hour-long meeting realizing that Bush-Cheney's Washington
had become a foe in the fight against reckless real estate finance. The OCC "took 50 sheriffs off the job during the time the
mortgage lending industry was becoming the Wild West," Cooper says.
http://www.nbcnews.com/id/27121535/ns/business-us_business/t/states-warned-about-impending-mortgage-crisis /
@Red Sox, '04, '07, '13, '18, The rich never work for the poor. The relatively poor work for the rich, after which the rich
complain that they are being asked to pay taxes for services for the people they underpay.
@vulcanalex - Did it ever occur to you that if Charles and David Koch, together worth upwards of 90 BILLION, paid taxes proportionally
the same as you do now, your taxes might be lower? The middle class has been footing the bill for 50 yrs. and needs actual relief.
No one, no one, no one needs 90 Billion $$. That's pure greed and it's economically stupid as well.
One should tax every source of income at the same rates. Thus, incomve from dividends, capital gains, and inheritances should
all be taxed at the higher rates. The distinction between earned and passive income is false and makes no difference to the recipient.
The Tax Cuts and Jobs Act of 2017 took away: SALT deductions (limited $10,000 fout of $19,883)) Personal exemptions ($12,150)
Unreimbursed business expenses ($9,906). This increased my TAXABLE INCOME by + $32,209. Sure, marginal rate dropped from 24% to
22%, but my Federal tax INCREASE this year was $7,085 or 71%. MAGA!
Some scattered thoughts. Bear with me. I just got back from an Orthodox Jewish wedding (a lovely experience!). While there,
I fell into conversation with a good friend--a conservative. A moderate conservative--but conservative nonetheless. A dichotomy
struck me--which I kept to myself. My friend's view of "classical liberalism" was "limited government." Enable people to rise
as far as their talents and determination take them. And get out of the way. Such (he declared) was the philosophy of our sixteenth
President--the sainted Lincoln. The Civil War (he said) garnished him with a bright shining halo he might never have achieved
otherwise. Okay--maybe so. Maybe not. Who knows? So what's my own philosophy? Which I never got around to articulating. Protection,
Mr. Krugman. Protection. Protection of an oppressed minority from an oppressive majority. OR-- --of an oppressed majority from
an oppressive minority. Protection of the weak from the strong. Of the poor from the rich. Of the honorably striving working people
that never won a place in the heart--or the books--of that conservative icon, Ayn Rand. So, Mr. Krugman-- --I read your piece
with considerable sympathy. Tax the rich? Sounds good to me. Even out the horrendous inequality now plaguing and poisoning American
life. But part of this feeling, Mr. Krugman, is old-fashioned SPITE. Sorry! I'd love to hear the Koch brothers howl. Someday.
Soon.
AOC has her work cut out for her. She will need your help. In reality, she will need all the support she can get to persuade
the Democratic Caucus that a tax rate of 70-80 percent on very high incomes makes sense. Clearly, she and many noted highly respected
economists have found that the trend in inequality has not been beneficial to the performance of the larger U.S. economy. She
appears to have the energy and intelligence to develop a narrative that the Caucus could use but ultimately she and the proponents
of the 70-80% will not hurt their chances for re-election in 2020. Equally important in making our society more egalitarian are
the issue of tax shelters and the definition of income in the tax code, e.g. the treatment of income from capital gains vs. income
from salaries and wages. My very rich friends seem to load a large portion of the "winnings" in offshore shelters. A big difference
that needs to be addressed is the "cap" on payroll tax rates that are clearly unfair to the average wage-earning employee, and
the self-employed "gig" economy worker. I hope someone will take up this very unfair provision. I suggest that requiring ALL income
be treated equally with NO CAP for the FICA-HI payroll deduction would make the Social Security Trust Fund flush and possibly
the funds required for Medicare for All a reality. With this kind of payroll tax package, there is a possibility that the payroll
tax rate could be reduced or payments to recipients increased.
@Joe, it appears you're confusing the marginal tax rate (the rate at which your highest additional dollar of income is taxed)
with the overall rate at which your income is taxed. They're not the same. People won't be paying the highest rates except on
their highest additional dollars of income -- those last several million dollars, for example.
What needs to be pointed out in every article on tax rates is that the 70% or 35% or whatever rate is in force is not on ones
entire income, but only on the topmost part. It might only be on the top 10% of an individuals income, not on the entire amount.
That is where people who oppose these rates don't get it. And when the "alternative minimum tax" was passed, it was meant to make
sure everyone paid some tax because they weren't allowed to use all of they deductions. But somehow, some are more privileged
than others and get to pay nothing, like the Trumps and Kushner's. In the meantime, some of us retirees who saved like crazy for
retirement and had some decent investments have to pay through the nose every year when the law requires us to sell a certain
portion of our retirement funds and pay capital gains rates. We have paid alternative minimum tax for years with far less annual
income per year than Ivanka has per month.
The decline of the American middle class started with the election of Reagan and his voodoo economics. The investments we made
say in college education could no longer be sustained at the lower tax rate and the result? No one but the upper ten percent can
afford college.
The other intended consequence of low taxes for the rich has been the accumulation of money that can be used to buy political
power. I think that's the real purpose of the right, to have the power to take over our country. To counter that we need to look
at wealth taxes and taxing more capital gains. We don't need more Donald Trumps and Koch brothers.
Bravo to Ocasio-Cortez, and to Krugman. But what I'd like to know is why is it that such sensible and fair taxing policies
have not been promoted by current Democratic members of Congress? To answer my own question - they've been "bought" by corporate/1%
campaign contributions. This said, how will Ms. Ocasio-Cortez fare in the House? Conversely, how will the House fare with her
in it? Should be interesting to watch.
We need a "Jobs Created" form in the 1040 stack. In exchange for the tax cut, the very wealthy should be required to file it
for the same reason that the very poor are required to prove they qualify for the Earned Income Credit. How many jobs did you
create? How much were they worth? Write it down. Some ridiculously rich American volunteer should step forward with the last 10
years of their tax returns and corespondingly matched annual budgets to confirm 2 things that the GOP refuses to admit but uses
to underpin tax cuts for people who do not need one: 1-The Uber Wealthy aren't big job creators. 2-The impact they have on the
economy is far less than the average person who spends all their tax cut on goods and services. A higher tax rate, better matched
with uber high personal income generated by the global multiplier effect, will have a greater impact on the economy in one year
that one person can achieve in a lifetime. Kill the Trickle Down Theory before the GOP recycles it again.
@Geoffrey, you're mythologizing wealth. Most annual income over $10 million has nothing to do with being "super productive."
That's only true in an Ayn Rand novel.
I am fully aligned with Mr. Krugman when he bashes the idiocy of Trump's economic "policies". I part ways with him over his
advocacy of super high tax rates. He makes a case that we did so well when we had it but he, of all people, knows the difference
between correlation and causation. In the years without internet and with international movement by people and companies was full
of friction, this kind of extortion and "not caring" about what the "rich" thought held up. In today's world, you would massive
exodus of the most productive and economically active members of our society. It failed. In Europe and in the US, countries had
to contend with real competition from other geographies who were only too happy to welcome these folks. Another point, which Mr.
Krugman fails to address is this: who will put the capital in question to a more productive use - the government which collected
it as a tax or the businessman who has an opportunity to invest in the improvement he finds most efficient and effective? This
does argue for policies that encourage the 'right choice", but overall, the answer is known. This is why every true socialist
system has failed economically, and will continue to do so. 70% tax bracket is not the answer. It never was.
Many of the comments here are dismaying. The point here is that both the US economy and society are not sustainable in the
long-term with a tax system that creates massive inequality, public debt and disproportionately supports the enrichment of the
already-wealthy. There is a self-centred, growing (mostly Republican) billionaires club buying the political system, defining
public policy and not surprisingly they are the primary beneficiaries. US democracy is very broken and the rest of the world no
longer views it as the example it once was. The US needs more voices like OAC's.
I thought I already liked AOC a lot; now I like her even more, especially after her political platform about a free universal
health care reform proper of one of the major powers in the world.
@Jason "apply some creativity and critical thinking (you know - the kind that happens in the private sector)." Worked in the
private sector for 30 years. Never saw much of that.
So often, it seems like the Republicn tax plan is, "We need to lower taxes on the rich because eventually it will be good for
the middle class! Pay no attention to that sliver of middle class tax hike behind the curtain..." Why anybody takes their economic
rhetoric seriously when there are no credible cases that their plans have worked lo these past 40 years remains a mystery to me.
The real crime is how much of the pie so few take home in the first place and how little the great bulk of Americans see. If
there were a small village, and one powerful man making the rules on wealth distribution decided to give himself a ninety percent
cut of the wealth and leave the remaining ten percent to the rest of the townsfolk, they'd go after him with torches and pitchforks.
But we have a giant complicated impersonal economy, and this simple economic injustice gets lost and confused in the mix. But
the fact remains, the people with power - the stewards of our government and our economy - are abusing their power, and we as
individuals, and all of us as a society suffer greatly.
@Joe Hi, It would be progressive and banded, so you would only pay 70% on the very highest part of your earnings. So you would
be paying 30% on earnings up to say 100K, then 40% on earnings between 100K and 250K, and so on. Hope this helps.
If this country ever aspires to greatness again, it will take campaign finance reform and the end to vulture capitalism, including
raising tax rates on wealthy individuals and corporations. The supreme court has given corporations way too much power and it's
past time to take it back.
@Brinton I agree - a fair tax system would look at all income equally. A dollar of income would be treated the same regardless
of its source. The discount on capital gains makes no economic sense - this is "picking winners and losers", something the GOP
hates. Think of this: why is interest income taken at a higher rate than capital gains? The wrong answer is that the capital gain
came from taking a higher risk. Why does the tax law reward risk taking and by contrast punish safer investing with a higher tax
rate?
Thomas Picketty studied centuries of income inequality and found that without progressive government intervention, wealth disparities
tend to worsen. The single most effective way to shrink wealth disparities and grow the middle class is through progressive taxation,
aka, soak the rich. This is how Denmark does it. Funny thing, growing the middle class increases national happiness and strengthens
a sense of community. Big difference from the uber rich who buy islands just to live without neighbors. Living in a more equitable
society makes everyone happier.
@Tom Dr. K is all in on the taxing of wealth and cap gains at higher rates, and while I haven't read AOC's particular proposals
yet, no doubt she would agree.
@Annie I'm not sure a small local community group would effectively or efficiently provide some of the things we rely on the
government to provide -- healthcare coverage for instance (at least here in Canada) or a police force. Those skeptical of what
government does should try living in a country without musth government: Somalia, maybe.
We only need to look as far back as Kansas in 2012 to see a real life case study of republican tax policy in all its theoretical
glory. Governor Brownback and the republican legislature passed into law a low individual income tax rate and eliminated state
income taxes entirely for pass-through entities (ie small businesses) to spur job creation and investment in businesses. Not only
did it not create said jobs nor spur investment in businesses, the state collected $750mm less in income tax ($2.2b vs. $2.9b)
over 2014-16 and the state began FY 2017 with a $350mm deficit. Sadly the people who suffered disproportionately were residents
of small towns and districts whose districts didn't have strong enough balance sheets to weather unusually low levels of tax revenue,
where public services such as safety and schools struggled (many of which had to consider closing or consolidating). In addition,
the state diverted funds from infrastructure spending and universities to the general fund and spend down the state's cash reserves.
That is the result of a republican tax plan enacted.
@bcw And the exact same also goes for Trump himself, of course. Compare that to what Obama and the Democrats did: they increased
taxes for people like themselves multiple times, and then used that money to cover 20 million more Americans all while curbing
federal healthcare cost increases, AND by doing so saving an additional half a million American lives a decade. THAT is "putting
America first", outside of the GOP "alternative facts" world.
Another reason to tax the 1% at the highest rate possible: they would have considerably less money to spend on buying politicians
who will rig the system to benefit the wealthy at the expense of everyone else. I'm sure NYT's conservative commenters will say
"but...job creators!" Right. "Job creators" who are rapidly automating the means of production because robots don't need to be
paid a living wage. They never get sick or need vacations, either. Robots can work 24/7 without lunch or or bathroom breaks, too.
Unlike us pesky peasants with our quaint notions about Constitutional and civil rights, including "life, liberty and the pursuit
of happiness." The misanthropic rich deserve a good soaking, every now and then, to remind them that they're no better than us
and just as human as we are.
What Paul Krugman does not say (but knows all too well) is that due to various deductions and tax shelters, the effective (as
opposed to nominal) % of income paid in the 50's, 60's and 70's was not much more than now. For example, until 1986 taxpayers
were allowed to exclude 1/2 of their capital gains. So, if you were in a 70% tax bracket, the capital gains tax was 35%, in the
50% bracket you paid 25% and so on. Krugman knows this, but obviously does not mention it. He has to do his part to bamboozle
the rubes. Remember, this is the same guy who predicted on election night 2016, that the stock market would "never recover".
AOC should run for president in 2028, the first year she is eligible. She's smart and super-attractive, which will turn R's
into even crazier people than they are now, because people will always vote for someone who looks great. Would've worked for Beto
in Texas if not for the massive voter suppression they have there.
@Billy Walker - "What policy on Planet Earth could possibly justify the government becoming an equal partner, or better, with
someone's earnings?" Because there isn't a single person on the planet that works hard enough to "earn" $10 million per year,
let alone those who actually have that as an income. There's comes a point at which a person's "earnings" are nothing more than
benefits of position - which in and of itself isn't a problem. But it's important to acknowledge that this extra income is earned
solely because of the individuals below them, as well as the advantages the state/government has provided to allow those earnings
(typically through infrastructure, policies, protections, other indirect features, etc.), becoming an equal partner in redistributing
that extra income to those that actually worked to make it happen, or paid for the ability to earn it, is reasonable.
@Jose "aren't rich people part of our democracy? Don't they get a say as to whether they have to work and give away their earnings?"
They do ... they get one vote person just like everyone else. They do not get one vote per dollar of income, although some of
them act as if they should.
@Billy Walker "As someone who earns well less than $100k a year I simply cannot believe this nonsense of 70 or 80% tax rates.
Just because I am not smart enough to earn $5 or $10 million or more a year does not give the government the right to take most
of it. This tax concept is pure insanity. Even if it applies to earnings that only exceed the $10 mil number. Insane." You start
out with the wrong premise right out of the gate. Many in the top 1-2% have done nothing especially noteworthy to achieve their
wealth. They neither earned nor were particularly inventive. Some like Elon Musk definitely earned it. Others like the presidents
children just inherited the fruits of a lifetime of cons and scams against ordinary working Americans. In either case there is
a such a thing as an inflection point beyond which amassing further wealth means nothing. I see nothing wrong with taxing wealth
beyond that critical maximum at those higher rates. After all many of those people enjoy the fruits and stability of a society
made possible by the collective sacrifices of generations of Americans in wars past, present, and future. Much of the infrastructure
(bridges, highways, waterways, court systems, property rights etc) that exists today (such as it is) that makes the current economic
engine possible was bought and paid for by the millions upon millions of ordinary working Americans. The rich should pay more
because they benefit the most from this sacrifices others have made!
@Georgia M If you believe that the obscenely high and ever-rising incomes of the extremely rich are "their property" and that
their rigging of our economy, our taxation rules, and our political process played no role in their good fortune, you have not
been paying attention. A "young brilliant doctor" isn't even remotely in the class of the ultra-rich and is exactly the kind of
misleading example they love to point at, like "small businessmen." We are talking billionaires and close to it.
@Peter, that's a marginal tax rate, not the rate on all your income. Only income above, say, $1M per year would be taxed that
high. I assume most people can survive quite well on $1M per year, plus 30% of amounts above that.
The rich have figured out how to maximize their returns on investment - the most productive dollars the rich spend is to buy
Republican (and some Democratic) politicians. The Koch brothers invested a mere few hundred million to buy some elections and
have so far made about 1.4 billion dollars from the Republican tax cut, a return of a few hundred percent in one year; which will
continue every year going forward.
Hey, Prof Paul. I think we as a body politic need a refresher on what a marginal tax rate is? A 70% top marginal tax rate does
not mean that the people 'earning' a million only take home 300K. It just means that after some other threshold has been crossed
in terms of income after deductions, income above that level is taxed at increasingly higher levels. So that, say, the first 100k
is taxed at a certain level (n), but the last 100k is taxed at a level that equals 'n minus 100K' and minus the other increments
in income that kick in the higher marginal rates on the scale? Not elegantly stated, I know, but I find, over and over again,
that people seem to not have been taught the difference between a tax rate and marginal tax rate.
From the article: "AOC's advocacy of a tax rate of 70-80 percent on very high incomes." This shows her naivete as a young person
with limited years of working for a paycheck. At a certain point, if I'm only going to keep 20-30-cents of each additional dollar
I'm making no thanks time to pack up for the day, go home, relax and enjoy time with my family. I think at least 95% of people
would say the same thing. It's just not worth it especially to be paying for people who are staying home and people who are staying
home and pumping out more and more babies, while I responsibly only brought two children into the world and pay for them myself.
The Swiss have a wealth tax. People are taxed approximately 1% for money lying around in bank accounts and other assets. This
means taxes aren't focused on income per se, but accumulated wealth. I think it's an interesting idea for taxing the super wealthy.
The tax could be prorated, higher for those with more money and very low for those with just a little savings.
What this incredibly focused and accurate opinion piece does not mention is the uses that marginal taxes were put to or the
incentives people and companies had to lower their marginal taxes through reinvestment. Infrastructure was created, low cost higher
public education was expanded, basic research in those institutions was greater, and entire new industries were created, employees
were invested in. Now, we have the rich playing the W.S. casino, mostly controlled by bots, employees are commodities or apprenticed
and indebted, wages are supressed, there is not a strong infrastucture plan, I could go on. I say Make America Great Again, and
tax the rich.
@wes evans - I don't think that that is actually true. Furthermore, I'm not sure that the folks who do that work and are in
that tax bracket are working because of the money. Jeff Bezos? Bill Gates? Warren Buffett? (the list could be quite long). If
you taxed them at a higher rate, they wouldn't quit. In addition, many of those folks are no longer actually working, but simply
accruing wealth though investments. They won't suddenly uninvest because of higher taxes. Instead, we'd have better schools, better
healthcare, better transportation for everyone, and the economy would benefit much more as a result.
Obviously, the public is unaware that the tax rate during the Eisenhower Administration, for people making above $400,000,
was 90%. So, the idea that a 75% rate on the 0.1% is excessive is laughable. People in the 0.1% have many legal ways to reduce
their tax liability. As Warren Buffet had stated many time, he pays less taxes that his secretary and Buffet is one of the four
richest people in the world. The tax rate for people in his income bracket is not more than 39%. He, obviously, does not pay taxes
at that level. Go figure.
Ms. AOC comes off to me as a non-threatening American Congresswoman of Puerto-Rican descent. What is it about her that makes
her appear so dangerous to Trump's crazed male supporters? I blame most of it on her bright red lipstick, which for some reason
is always threatening to insecure men.
@Freda Pine Here's an early commenter who already detailed this out and should have gotten NYT Picked since a lot of readers
needed to read it in order to help shake loose a stuck wrong notion about what marginal rate means: Rational not Rationalize Milwaukee,
WI Please don't forget we are talking about the highest MARGINAL tax rate, e. g., the tax due on the income over $600,000 for
a couple filing jointly was 37% in 2018 and the same couple paid 35% on $400,001 to $600,00, and 32% on $315,000 to $400,000,
and 24% on $165,001 to $315,000, and 22% on $77,401 $165,000, and 12% on $19,051 to $77,400, and 10% on income up to $19,050.
What we need are more margins on the high end; to equate a $600,000 earner with a $10,000,000 earner is absurd. Nearly half the
top %1 of earners make over $10M. Why should they be taxed at the same rate as someone making 6% as much? A family making $36,000
(6% of $600,000) pays a highest marginal rate of 12%, while the family making $600,001 pays a highest marginal rate of 37% and
a family making $10M pays at the same highest marginal rate of 37%! The incentive for the top .1% in this set up is not to put
money back into their businesses or employ more people, but rather, it's to buy off politicians dedicated to keeping their tax
rate on the bulk of their income ridiculously low! When the Koch brothers thanked Paul Ryan for passing Trump's tax cuts it cost
them $500,000 (in donations to Ryan), but gained them $1 - $1.4 Billion in reduced taxes.
@Red Sox, '04, '07, '13, '18, How many uber rich like Romney or wealthy CEOs or golf club developers actually worked for poor
people? Gee, that's a tough one. Let me make it easy for you. Try zero. I am not wealthy and yet I never worked for a poor person
in my life either, because a poor person would not have had sufficient money to pay even my meager earnings. When you work and
pay taxes, you are not working for the poor, you are working taxes to support this country, and the many things it does for you.
Remind me again how many of Romney's many sons enlisted. Another toughie. Again, let me make it easy for you. The answer is zero.
Oh, that's right. Their "service to their country" consisted of helping Romney get elected. Kind of like Trump's sons service
to their country. Or Trump's purple heart.
@talesofgenji Americans abroad are still required to file US tax statements. Of course, if they want to get rid of their US
citizenship, they can. My guess is there is a way to capture that tax revenue. Perhaps starting with reminding the rich that they
live in a society, and their wealth is tied to the health of the society.
Why are so many dead set against paying taxes? To use an old cliche "there is no such thing as a free lunch". This is how government
services are paid for. Where would we be without government services? Are you willing to do without police, firemen, road crews,
sanitation, the armed forces, aviation regulators, stop signs, parks and countless other things that government provides. Tax
rates need to take into account income. The poor and the middle class should be taxed at a much lower rate than the wealthy. The
wealthy can afford to have more taken in taxes. Do you really think they would notice? Greed is not an exemption. We should all
be proud to pay our fair share of taxes. We live in a great country. Taxes are the levy we pay to keep it great.
Hey Paul why don't we just tax everyone at 100% and then redistribute to everyone perfectly equally? That would minimize the
effect of diminishing marginal utility!! Hey Paul when are you going to wake up? Stagflation happened your position has been losing
the argument for 40 years now, I am surprised you aren't used to it by now. Free movement of capital, free movement of labor,
free trade. And no redistribution, that is where we are heading.
When I first saw AOC's tax proposal as a headline (and not reading the article), I did think, "Wow, that's too high!" But after
thinking through the issue with Krugman's help, I've come around and now agree with AOC. I do think it'll be a tough sell to a
sceptical public (surely made worse by conservative lobbying), but if Democrats can tune the public with what prosperity was like
in the '50 with progressive taxes in place, I think there's a good chance that a majority of Americans will back this vision.
But the work had to start now and with urgency (and without the shutdown of our government!).
There's this popular myth that supposedly tons of conservatives went "hysterical" over a perfectly innocent video of Ocasio-Cortez
dancing around with friends. How many people exactly were "hysterical"? I keep reading this, and as far as I can tell it's just
a myth. Was there maybe one fool who posted the video in a misguided attempt to somehow embarrass her? I guess, probably. But
please just face reality and recognize that beyond a few negligible cranks, nobody cares.
Please make a list of productive Americans by job title. Or is your list by income level? Are public school teachers productive?
If so, why have their incomes been nearly flat for decades? Why has the median income of Americans not kept pace with inflation
for over 25 years? They haven't been productive? They have been. Big Business hasn't shared those gains in productivity via $wages.
The IBT of those businesses has soared.
We hear a lot about "hard-earned" income and "hard-earned" dollars. Very well. It IS hard to earn money, at least for most
people, so perhaps the government shouldn't tax income from wages, salaries and professional fees--and even from gambling--at
such a high rate. Maybe we should change the system by pushing the top income tax rate downward and then raising the estate tax
(often called the "inheritance tax"). That way, more "hard-earned" money will stay with the taxpayers who earned it, and the government
would take a little more of the genuinely unearned money. An old saying about the people who were born on third base and thought
they hit a triple comes to mind
First, I believe Picketty also recommends similar highly progressive rates. Second, I'd be curious know what effect such rates
would have on top-tier inflation? It seems clear that "inflation" is relatively low and stable because it no longer enters into
wages. At the upper income level, meanwhile, inflation appears rampant. Everything in top-tier consumption, from art and high-end
property to financial advice, bespoke suits, opera tickets, luxury hotels, political leverage, and legal fees, seems to be almost
hyperinflating. This in turn drives the rivalrous demand for even more concentrated wealth at the top, a keep-up-with-the-Jones
among billionaires . We might be doing the rich a favor by putting a tax chill on their metastasizing lifestyles.
I assume that you work hard to make a living. Do you think that investment bankers and tech CEOs work 5000 times harder than
you? I know a guy who wrote a computer program to trade stocks. He doesn't work at all, but makes more in a week than you make
all year. Does that seem fair? The super-rich are able to buy influence, subjugate our democratic system, and push through laws
that make them even richer - while making it harder for folks like you to get ahead. Does that seem fair? And you are worried
about billionaires only bringing home $2 million / year?
But this entire column presumes that the Republicans believe in science, data and facts. Despite 70+ years of evidence, knowledge
and truth has not "trickled down" into the average Republican's mind. In fact, in the Trump era, it's gotten worse -- Republicans
now believe in "alternative facts," which they make up to match whatever it is that they want to justify, and they assert that
"truth isn't the truth." So good luck to OAC as she tries to convince Republicans about the efficacy of "a tax rate of 70-80 percent
on very high incomes." Republicans, including the Trump administration, do believe that the 1950s was the best decade ever in
the post-WWII era – not because of its 91% top tax rate on income, but for entirely different reasons that have nothing to do
with fiscal policy.
I'm your average democratic socialist living north of your country and, yet I confess this article doesn't sit right with me.
I enjoy reading Mr Krugman and I will read him first in your paper. What irks me though is his yup yup it's okay to soak the rich
because it makes economic sense. Even if you could prove that taxing the rich at 75% won't harm economy, should you do it? That
is to say, the wealth of the rich is their property. Just like my meagre possessions are my property. As a Canadian I pay around
29% income taxes (even working class Canadians pay a fair amount of tax). Wealthier Canadians pay around 55% of their income.
We are fortunate that wealthy people feel invested in the community here and tolerate the higher taxes. The well-being of our
public services is dependent on all people feeling they get something in return for their tax dollars. I guess what I am getting
at is that there is a sort of social contract that all citizens are invested in-poor and rich. I recently spoke to a young brilliant
doctor and asked if he wanted to move to the US (he has had some great offers). He said no, he wants to use his skills in the
community. I am grateful this young man will work and contribute here. So, why increase his tax level even further? Saying that
he has the money for the taking is not acceptable. I wish Ms Ocasio Cortez luck, but I hope these young socialists reign in the
glee at the prospect of fleecing their fellow citizens.
@Billy Walker they don't take "most of it." they only take that rate in the highest income percentile. So only the last marginal
dollars earned. It is doubtful ANY CEO is worth the pay they get. and most of it is in stock options, the proceeds of which are
not even discussed here because they are capital gains, not income. So, most CEO's only make a few hundred thousand in "income"
and the rest is in stock options for which they are taxed at a much, much lower rate. That is how skewed our idiotic tax system
is. They game it and don't even have to count their obvious income as actual income. Totally corrupt.
While there's no denying that many of the wealthy achieve success by their talent and hard work, no one becomes wealthy solely
on his or her own. Chance always plays a role in anyone's success, and no one's success is achieved without extensive support
from our society's institutions and from others. The success of any individual is therefore always a collective success -- created
by a combination of the individual's own talents, the support of others, the advantages provided by our society, and the vagaries
of chance. Because of this it is completely justified to expect -- and to demand if necessary -- that the wealthy give back some
portion of their wealth to the community that contributes so much to their ability to become wealthy. Whether the share given
back is 20%, 50%, or 80% should be determined based on two factors: first, how much does society need from the wealthy to continue
to provide an environment in which as many as possible can succeed and, second, how important is it to maintain individually-held
concentrations of wealth either to provide incentives for success or to allow for significant private expenditures and investment
to complement our public expenditures and investment. While a 70% marginal tax rate on the wealthy sounds high given recent policy,
the crumbling state of our public infrastructure, our fraying social safety net, and the growing inequities in access to the benefits
of our society suggest a need for higher tax rates.
In 1960 when Eisenhower was president, the top marginal tax rate in the US was 93 percent, we were building interstate highways
and quadrupling our higher education system via the GI bill, and the American economy was the envy of the world. So this notion
that the country is better off if the rich don't pay taxes utterly ludicrous -- it is simply the invention of rich people who
think they deserve to live tax-free. Since our democracy is broken and the rich basically own Congress, we will probably keep
cutting taxes on rich people until they go negative, at which point American taxpayers will be paying the rich just for their
overwhelming wonderfulness.
As a small retail business owner I am continuously flabbergasted by chamber of commerce type's resistance to taxing the rich
and increasing the minimum wage. My customers are NOT the 1% and every time wages have gone up my payroll has gone up 20% but
my gross income has also increased by 20%. That is a good deal, and if my income taxes went up as a result of all my increased
profit it would still be a good deal.
Shouldn't we be talking about effective tax rates? Did people actually pay those high marginal rates? Given all the tax loopholes
at the time, I don't think so.
@Josh I have an even better idea--let's tax everyone at 0%! We'll all have lotsa money and we'll have a great big party. There
are some downsides like not having an electricity grid, police, or firemen but on the other hand--whoopee!
Good job making taxation policy interesting to read about. Maybe Dr. Krugman could clarify why and how the "taxes are bad"
crowd insists on misrepresenting the marginal rate as the total rate, among other inaccuracies in a four-decade campaign to demonize
taxation.
We need to assess the question of wether many of the rich "earn" money. You don't earn $200M in stock options and grants. What
you have done is benefitted from a system that increasing rewards those with the power and the influence to rewrite the rules
to their benefit and the the detriment of everyone else. How these people can take such a large portion of the corporate pie when
lower paid employees barely get by is unconscionable.
Here are some facts Krugman will not mention. From 2014 At least 45% of Americans pay ZERO Federal income tax. The top 1 percent
of taxpayers earned 20% of all Adjusted Gross Income. That same top 1% of taxpayers paid almost 40% of all federal income taxes.
The top 1% of taxpayers accounted for more income taxes paid than the bottom 90% collected. One-fifth of the US population gets
more back in refunds than they pay in Federal taxes. Keep doing the Robin Hood routine and the 1%' ers will move ALL of their
money off shore.
@Ma Ah, yes - the wisdom of simplistic remarks. Unfortunately it takes actual information and insight to even begin to compete
with an economist of Krugman's expertise. You seem to be confused about what profit is, or the theory used in optimization of
profit (incremental spending). You absolutely want to spend up to the point where the next dollar brings in another dollar of
profit but not beyond. Spending less leaves money (profit) on the table. Could it be that you don't understand calculus? I'm afraid
that economics, and incremental tax rates are a bit more complex than that. Your dig about social conscience is duly noted, as
is your missing the point of his analysis. None of this is based on social conscience, but in what generates maximum economic
growth. Paul not only gives direct evidence of a reduction in the growth rate that correlates with the reduction of tax rates,
he dissects the reasons why. Want is not a straight line curve, something that the 'greed is good' crowd has neglected for over
40 years. Of course, your only retort to evidence and thoughtful analysis by a Nobel laureate is to label his thesis 'lunacy'.
Sorry, but without evidence, solid reasoning or even standing in the field no one is going to pay attention. Which is a good thing,
it's time rationality regained the upper hand in public policy and politics.
@Prof Here are some facts you didn't mention. Many Americans aren't paid enough by the "job creators" to have enough tax liability.
When you pay people low enough wages, they end up being below the standard deduction. The top 1% has significantly more *wealth*
than their wages indicate. Our tax scheme is mildly progressive at this point, so it should not be surprising that they pay a
higher percent tax per dollar earned than someone earning, say, $25,000 a year. As of 2015, 13.5% of Americans lived in poverty.
That's over 40 million people. Hard to have much income to tax in the first place when one is poor. Keep doing the reverse Robin
Hood routine and the social fabric of this nation will tear so badly that our norms will disappear and we will descend into the
chaos that permeates nation-states with extreme wealth inequality.
At the very least, the FICA paycheck deduction should be based on every dollar earned rather than being capped at $128,000,
(or so.) For one thing, this would go a long way to solve the problem of shortfalls in the Social Security fund for the large
baby boom bump. How is it justified that this deduction should be capped for the highest earners??!
@Smokey geo Amazing. We've literally tried the approach you advocate for the past 30+ years, and all the evidence shows that
we're worse off. Giving rich people more money on the hop that it trickles down has literally led to stagnant wages, obscene inequality,
and lower growth than in the previous decades. You can try to dress it up however you want - feel free to throw another equation
our way - but the proof is in the pudding. We've had almost four decades of evidence that refutes your argument.
@Michael Evans-Layng, PhD, Correlation v. Causation notwithstanding, as in life , tines change. Deductions were abused but
companies were reinvesting heavily. Today they buy back their shares and salt the rest away offshore. Bring back the taxes but
invest it wisely. Infrastructure, education, health care , research, you know, like China kinda sorta.
Please, no socialism in the US. It has been tested in many many many places, it is always a failure. Why try??? France has
the second highest taxes in the world and massive protests. It is a tempting policy, Why not tax the super rich? Seems to make
so much sense. The problem is that IT DOES NOT WORK. Tax at whatever rate you want, 76%, 80%, 99%, lets try for a few year, you'll
get some money first and then less, less, less because society gets poorer, people and capital leave, so eventually you're back
to where you were but with less wealth. Society needs to create wealth not be obsessed with taking from others. Policy of envy
is the worse.
@Ed So the high tax rates in the mid-20th century were...socialism? Scare tactics aren't helpful. The rest of your comment
is demonstrably not true based on our own history. It creates wealth *for our country* when we tax the rich appropriately. We
should definitely not be focused on trying to create wealth just for individuals. How does that promote the general welfare? Try
again.
The Dems need to articulate this with greater understanding and confidence. Most people do not understand "effective tax rate,"
and thus hear 73% and think it's on the entire earnings of an individual. Americans don't understand carried interest, the Soc
Sec contribution max on earnings, and SEP and other pre-tax benefits for the wealthy. Then they hear, "Vote for me, I'll cut your
taxes," and we deepen the mess.
Discussions of higher taxes on the wealthy typically fail to clarify that higher taxation rates in all likelihood will only
kick in once you reach a certain (much higher) level of income So a taxation rate of 50% on a $1 milllion salary doesn't mean
that the individual pays $500,000 in federal taxes. In the 1950s the top tax rate was 91%, but it didn't kick in until you reached
an annual income of $200,000, which in today's dollars is about $1.85 million. So what seems like grossly unfair government confiscation
of hard-earned income -- when you start throwing around numbers like a 50% tax rate -- is nowhere near as harsh as it seems. According
to one website, effective tax rates in the 1950s on the wealthy were closer to 42%.
https://taxfoundation.org/taxes-rich-1950-not-high
/
@Darsan54 Yes, there are too many deductions, but if Democrats are going to protest over removing the deduction for state taxes
(a highly progressive reform that only affected high earners), Democrats aren't likely to do away with the mortgage interest deduction,
which is the most significant remaining income tax distortion. . AOC and PK both ignore the real elephant in the room, which is
the rates of divident (22%) and capital gains (20%) tax rates. We should be taxing capital income at labor income rates, or even
better taxing capital itself. Once again, though, the educated elite donor base in the Democratic party would be hurt by taxes
on their accumulated wealth. The debate over labor income taxes is mostly a snow-screen so the Democratic party doesn't have to
talk about wealth inequality and our failure to tax wealth.
Growing income inequality saps our strength as a nation, as it widens economic disparities and undermines our sense of common
purpose. Higher marginal rates for the wealthy will help everyone. The wealthy will surely put patriotism and the common good
above greed and self-interest.
I know this opinion piece addresses only personal income tax but I don't think you should separate the issue from corporate
income tax. As many economists have already noted, based on current research, corporations have plowed most of their windfall
from their lower tax rates into buying back stock and rewarding the officers of the company,rather than into higher wages for
middle class workers in the company. Let's not forget this crucial inequity and make restitutions in both cases.
It's not just taxing high earners. In Australia we lose more tax revenue from corporations avoiding taxation. For example,
News Corporation (owned by Rupert Murdoch): -- had revenue of A$2 billion and paid no tax on it -- received A$30 million tax dollars
from the Federal Government to develop women's sports coverage on his TV channel, Foxtel, coverage which never eventuated. --
his nephew, Matt Handbury, received A$14 million for 'research' which has been totally undocumented, but is believed to have gone
to the IPA, a conservative 'think tank' established by Keith Murdoch, Rupert's father. I've no doubt the same largesse to corporations
& their owners is seen in the USA, which provides our lot of kleptocrats with so much inspiration.
Unfortunately, with second-rate economists and third-rate human beings like Arthur Laffer advising them, Republicans are not
likely to change their views. It will need Democrat's getting hold of both the legislative and presidential branches of government
for sense to prevail.
"... You know we can't touch the corporations - they are sacrosanct because they are the supposed "job creators" - this one title gives them carte blanche to act however they like, to make spurious claims about economies faltering, businesses going offshore and unemployment. They also donate heavily to the political parties. ..."
Shhhh... whatever you do, don't ever let them hear you criticizing the "job creators" or
there will be trouble.
You know we can't touch the corporations - they are sacrosanct because they are the
supposed "job creators" - this one title gives them carte blanche to act however they like,
to make spurious claims about economies faltering, businesses going offshore and
unemployment. They also donate heavily to the political parties.
Repeat after me:
"Blessed are the job creators"
"Blessed are the job creators"
"Blessed are the job creators"
"For THEY shall inherit the wealth"
"... If lunatics and scoundrels dress in fine attire they are merely better dressed lunatics and scoundrels. ..."
"... What an apt definition of those, who, among other things, robbed the Greek economy and flooded the EU countries with "refugees", most of whom have never even been in any war zone. let alone Syria. ..."
"... French Foreign Minister Talleyrand had it right when, commenting on Napoleon's defeat, he said of the reconstituted Bourbon Dynasty "Personne n'est corrigé; personne n'a su ni rien oublié ni rien apprendre" or as is commonly quoted in English, "They have learned nothing and forgotten nothing." ..."
While the European Parliament doesn't have too much real power, the most important thing
is that it was the dress rehearsal of its countries' national elections. And this rehearsal
shows that the establishment is in a bad trouble. Though it was crystally clear since Italy
'18.
What's needed here is a REAL and ACCURATE defining of "center", particularly
"center-right" and "fringe". What "center-right"? There is no real "center-right" when it
comes to the EU and bowing before the Commission, as the "center-right" agree with pulling in
even the marxist in all but name Greens of all countries just so they can keep the real
right, the Eurosceptics and Leavers out. All the more reason, Nigel Farage, far from being
some right-wing lunatic the BBC would have you believe, is actually at this point being FAR
too politically correct, refusing to ally with Le Pen and Salvini. The right HAS TO ally with
each other, across Europe, to have any influence. Whining about past statements by old man Le
Pen that are 40 years old or crying about the roots of some who support the AfD holds nothing
productive for their cause. The "center-right" is nothing but the center-left, incorrectly
labeled.
A very healthy development. My concern about it all, however, are the characters of the
individuals who lead such revolts against the Establishment. You need outsiders and often
obnoxious people to lead such movements, but they often don't make great leaders once they
are in. (My biggest problem with Trump is Trump.)
I hope the Establishment gets it – really gets it – and this change in Western
politics moves the whole body politic in the correct/reformist direction.
"Smashed"? Not even close. A major reshuffling, sure, but the combination of anti-EU
parties, eurosceptics, and outright racists hasn't grown all that much. In fact, in the light
of how the Brits have mishandled Brexit, certain major anti-EU figures now campaigned on
"reform from within" platforms rather than their long-held exit positions. Those who still
want to see the EU broken up, or reduced to the next best thing, a neoliberal free-trade
zone, remain a tiny minority.
On the other hand, I'll never forgive neither Tories nor Labour that thanks to their
stupidity, we still have that bloviating joke of a pied piper running around. He is quite
fitting, though, in the era of brainless populism, a Churchill for our time, the man who
goads Britain into war against nazi Germany (in his own tiny mind, obviously), then jumps
ship when hostilities begin, his job complete: "I have nothing to offer but your blood, toil,
tears, and sweat. You shall fight on the beaches, you shall fight on the landing grounds, you
shall fight in the fields and in the streets, you shall fight in the hills. If the British
Empire and its Commonwealth last for a thousand years, nincompoops will still say, 'This was
his finest hour.'"
Even when they move into the living room, leaders of fringe and former fringe parties tend
to be ego maniacal prima donas, and have a very hard time getting along, leave alone
cooperating for mutual gain.
If lunatics and scoundrels dress in fine attire they are merely better dressed lunatics
and scoundrels.
What an apt definition of those, who, among other things, robbed the Greek economy and
flooded the EU countries with "refugees", most of whom have never even been in any war zone.
let alone Syria.
Farage's win will lead to the Conservatives under Johnson providing a 'hard Brexit'. When
Britain survives and thrives, that will be the nail in the coffin of the EU, at least as it
is currently constituted.
French Foreign Minister Talleyrand had it right when, commenting on Napoleon's defeat, he
said of the reconstituted Bourbon Dynasty
"Personne n'est corrigé; personne n'a su ni rien oublié ni rien apprendre"
or as is commonly quoted in English, "They have learned nothing and forgotten nothing."
Plus ça change, plus c'est la même chose, or so our would-be European
totalitarians would have it.
The Globalists and their "Establishment" are not "Smashed" yet.
--
The Evil Union (EU)
There is an evil union called the E.U.
That tells other countries what to do
Many people of these countries did not get to vote
On whether their country should join this huge "lifeboat"
Instead their "leaders" signed their countries away
And now these peoples' are forced to obey
The dictums that emanate from an E.U. cabal
Are they now prisoners of these globalist rascals?
This Evil Union (EU) was planned many years ago
There is evidence to prove this: Do the people know?
They could be the "guinea pigs" of the New World Order
The one world government: the end game of the traitors
How can countries escape from this undemocratic EU?
Are they now prisoners, being told what to do?
By bureaucrats and, an EU, "Unelected Commission"
Has "democracy" been subverted by getting E.U. "admission"?
Excellent outcome for Europe and the EU. The establishment is not smashed. It is put on
hold (a bit). The greens are a welcome new block in the parliament. The nationalist-right did
win a bit but certainly not as much as predicted.
So now we have a more diverse parliament where discussions and fights will get much harder
and for real. Voter outcome is rising too. Just like a real democracy with a real electorat
and a real parliament. The EU is growing up. Hurray.
Just look at the record. Trump -- a cross between a carney barker and a conman -- beat a
neoliberal in 2016. Right-wing populists have scored big in Austria, Italy, Britain, and
Brazil since then. Just recently, Australia's right-of-center Labor coalition won their
election. And in the European Union's latest contest, Greens won big while right-wing parties
made gains in some areas. All these victories came at the expense of neoliberal centrists.
Bottom line: Across the world, people are finally wising up to the fact that neoliberalism
has failed them economically, politically, and environmentally. In fact, the climate crisis
-- an existential threat to human civilization -- is a direct result of the global neoliberal
juggernaut that has swept the developed world. So are the record levels of income and wealth
disparity, and the subversion of democracy by a powerful oligarchy -- particularly in the
US.
The only folks who didn't get the memo on this appears to be the neoliberal mafia that
runs the Democratic Party and the mainstream media here in the US.
At a time when neoliberalism is all but dead, Democrats and the mainstream media are
pushing Joe Biden, a neoliberal with a track record of supporting corporations and financial
interests above the people's interests; a man who's backed by PACs; a man whose small-bore
response to the climate crisis amounts to mass genocide for people and the species we share
the planet with.
According to The Hill's media reporter, Joe Concha, Biden is getting more media coverage
than all the other Democratic candidates combined, and the month after he announced, in one
week alone, Biden was mentioned 1400 times, to 400 for Sanders, who is running second in the
polls. This kind of backing by the party and the press is reminiscent of how they treated
Hillary Clinton in 2016, and the results will probably be the same.
@gjohnsit Like a
brontosaurus with a fatal wound, it thrashes in the swamp, crushing anything nearby, while
the nerve impulses crawl towards it's plum-sized brain. Like a blind drunk man whose life is
making its final spin around the drain picking a bar fight with a bunch of tough guys half
his age. Like a gambler going all in on one last hand. Dying, but not dead, and dangerous
because it has nothing left to lose.
@Raggedy Ann
I find the Democrats far more repulsive than the Republicans. At least the Republicans openly
avow their evil intentions while the Democrats hide the dagger and poison the chalice (a
little hyperbole hurts no one) in order to harm those who trust them. I won't register as a
Democrat this time but I will vote for Bernie if the DNC somehow fails to stop him. However,
I don't think the Democrats will be that incompetent in obeying the oligarchy's wishes.
Is there a third party candidate? People want to know.
"... Hospital executives, who each make millions of dollars a year, preside over an industry where about 5,000 patients die every week from preventable problems in U.S. hospitals, according to physicians at Johns Hopkins School of Medicine. The watchdogs who call out this deadly hazard live on a fraction of that amount as they try to save lives. ..."
"... A major reason why our society's best are so often last while our worst are first is the media's infatuation with publicizing the worst and ignoring the best. Warmongers get press. The worst politicians are most frequently on the Sunday morning TV shows – not the good politicians or civic leaders with proven records bettering our society. ..."
"... Ever see Congressman Pascrell (Dem. N.J.) on the Sunday morning news shows? Probably not. He's a leader who is trying to reform Congress so that it is open, honest, capable and represents you the people. Surely you have heard of Senator Lindsey Graham (Rep. S.C.) who is making ugly excuses for Donald Trump, always pushing for war and bloated military budgets, often hating Muslims and Arabs and championing the lawless American Empire. He is always in the news, having his say. ..."
"... The eight days of this Civic Superbowl got far less coverage than did Tiger Woods losing another tournament that year or the dismissive nicknames given by the foul-mouth Trump to his mostly wealthy Republican opponents on just one debate stage. ..."
"... If the whole rotted-out edifice comes crashing down, there won't be enough coerced taxpayer dollars anymore to save the Plutocrats, with their limitless greed and power. Maybe then the best can have a chance to be first. ..."
If you want to see where a country's priorities lie, look at how it allocates its money
Plutocrats like to control the range of permissible public dialogue. Plutocrats also like to shape what society values.
If you want to see where a country's priorities lie, look at how it allocates its money.
While teachers and nurses earn comparatively little for performing critical jobs, corporate bosses including those who
pollute our planet and bankrupt defenseless families, make millions more. Wells Fargo executives are cases in point. The
vastly overpaid CEO of General Electric left his teetering company in shambles. In 2019, Boeing's CEO got a bonus
(despite the Lion Air Flight 610 737 Max 8 crash in 2018). Just
days
before
a second deadly 737 Max 8 crash in Ethiopia.
This disparity is on full display in my profession. Public interest lawyers and public defenders, who fight daily for a
more just and lawful society, are paid modest salaries. On the other hand, the most well compensated lawyers are
corporate lawyers who regularly aid and abet corporate crime, fraud, and abuse. Many corporate lawyers line their
pockets by shielding the powerful violators from accountability under the rule of law.
Physicians who minister to the needy poor and go to the risky regions, where Ebola or other deadly infectious diseases
are prevalent, are paid far less than cosmetic surgeons catering to human vanities. Does any rational observer believe
that the best movies and books are also the most rewarded? Too often the opposite is true. Stunningly gripping
documentaries earn less than 1 percent of what is garnered by the violent, pornographic, and crude movies at the top of
the ratings each week.
On my weekly radio show, I interview some of the most dedicated authors who accurately document perils to health and
safety. The authors on my program expose pernicious actions and inactions that jeopardize people's daily lives. These
guests offer brilliant, practical solutions for our widespread woes (see ralphnaderradiohour.com). Their important
books, usually go unnoticed by the mass media, barely sell a few thousand copies, while the best-seller lists are
dominated by celebrity biographies. Ask yourself, when preventable and foreseeable disasters occur, which books are more
useful to society?
The monetary imbalance is especially jarring when it comes to hawks who beat the drums of war.
For example,
people who push for our government to start illegal wars (eg. John Bolton pushing for the war in Iraq) are rewarded with
top appointments. Former government officials also get very rich when they take jobs in the defense industry. Do you
remember anyone who opposed the catastrophic Iraq War getting such lucrative rewards?
The unknown and unrecognized people who harvest our food are on the lowest rung of the income ladder despite the
critical role they play in our lives. Near the top of the income ladder are people who gamble on the prices of food via
the commodities market and those who drain the nutrients out of natural foods and sell the junk food that remains, with
a dose of harmful additives. Agribusiness tycoons profit from this plunder.
Those getting away with major billing fraud grow rich. While those people trying to get our government to do something
about $350 billion dollars in health care billing fraud this year – like Harvard Professor Malcolm K. Sparrow – live on
a college professor's salary.
Hospital executives, who each make millions of dollars a year, preside over an industry where about 5,000 patients die
every week from preventable problems in U.S. hospitals, according to physicians at Johns Hopkins School of Medicine. The
watchdogs who call out this deadly hazard live on a fraction of that amount as they try to save lives.
Even in sports, where people think the best athletes make the most money, the reverse is more often true.
Just
ask a red-faced Brian Cashman, the Yankees GM, who, over twenty years, has spent massive sums on athletes who failed
miserably to produce compared to far lesser-paid baseball players. Look at today's top ranked Yankees – whose fifteen
"stars" are injured, while their replacements are playing spectacularly for much smaller compensation than their high
priced teammates.
A major reason why our society's best are so often last while our worst are first is the media's infatuation with
publicizing the worst and ignoring the best.
Warmongers get press. The worst politicians are most frequently on
the Sunday morning TV shows – not the good politicians or civic leaders with proven records bettering our society.
Ever see Congressman Pascrell (Dem. N.J.) on the Sunday morning news shows? Probably not. He's a leader who is trying to
reform Congress so that it is open, honest, capable and represents you the people. Surely you have heard of Senator
Lindsey Graham (Rep. S.C.) who is making ugly excuses for Donald Trump, always pushing for war and bloated military
budgets, often hating Muslims and Arabs and championing the lawless American Empire. He is always in the news, having
his say.
Take the 162 people who participated in our Superbowl of Civic Action at Constitution Hall in Washington D.C. in May and
September 2016. These people have and are changing America. They are working to make food, cars, drugs, air, water,
medical devices, and drinking water safer. Abuses by corporations against consumers, workers and small taxpayers would
be worse without them. Our knowledge of solutions and ways to treat people fairly and abolish poverty and advance public
services is greater because of their courageous hard work. (see breakingthroughpower.org).
The eight days of this Civic Superbowl got far less coverage than did Tiger Woods losing another tournament that year or
the dismissive nicknames given by the foul-mouth Trump to his mostly wealthy Republican opponents on just one debate
stage.
All societies need play, entertainment, and frivolity. But a media obsessed with giving 100 times the TV and radio time,
using our public airwaves for free, to those activities than to serious matters crucial to the most basic functioning of
our society is assuring that the worst is first and the best is last.
Just look at your weekly TV Guide.
If the whole rotted-out edifice comes crashing down, there won't be enough coerced taxpayer dollars anymore to save the
Plutocrats, with their limitless greed and power. Maybe then the best can have a chance to be first.
That means implicit acknowledgement from Bilderberg group that neoliberalism is under threat... Essentially trade war
with China is destroying neoliberalism as we speak because "national neoliberalism" -- neoliberalism without globalization is
just a flavor of neofascism, not a new social system.
Stacey Abrams, Eric Schmidt, Mike Pompeo, and Mattel Renzi, among others, will be
attending the top-secret Bilderberh meetings from today through the weekend.
Topics to be discussed include the weaponisation of social media, the future of
capitalism, Brexit, China, and threats to the neoliberal world order.
Held since 1954, Bilderberg has acted as a meeting point for high-level establishment
politicians and corporate elites to promote the interests of Atlanticism and global
corporations.
Many attendees of Bilderberg have gone on to play major roles in their countries'
politics, including Angela Merkel and Barack Obama.
The presence of Abrams at the event is another sign that she may act as a
vice-presidential candidate for Joe Biden, who himself has attended corporate-linked summits
including Davos and the Munich Security Conference this year and who has seen his narratives
bolstered by think tanks such as More in Common and the Trilateral Commission.
Abrams is herself a member of the Council on Foreign Relations and has pursued a
neoliberal agenda while in office.
As economist Russ Roberts once wrote in the
Wall Street Journal,
"The economy is a complex system, our data are imperfect and our models inevitably fail to
account for all the interactions. The bottom line is that we should expect less of
economists. Economics is a powerful tool, a lens for organizing one's thinking about the
complexity of the world around us. That should be enough. We should be honest about what we
know, what we don't know and what we may never know. Admitting that publicly is the first
step toward respectability."
In the same vein, I would urge new graduates to be skeptical of those in power who flatter
them with the lie that they can, if only they are sufficiently resolute, solve big social
problems through government interventions. The truth is that even the best-intentioned
government officials do not -- indeed, cannot possibly -- have the knowledge necessary to
deliver on any grand promises.
Sadly, this lack of knowledge never stops politicians from spending all of their time
pretending that they know it all and none of their time humbly reflecting on the arrogance of
attempts to boss the rest of us around. Making matters worse is the fact that the
decision-making process in government is not conducive to the best policies. Quite the
opposite, in fact. See, politicians spend other people's money and are unduly influenced by
special interests. As such, their interests are never served by their taking account of the
true costs of their programs, or acknowledging the (too-often invisible) victims of their
interventions.
Note Firefox does not pickup the user name in Zero hedge anymore. So user names in comments were omitted... BTW comments from
Zerohedge reflect very well the level of frustration and confusion of common Americans with the neoliberal social system. Neoliberal
elites clearly lost most of the legitimacy in 2016.
While this is pretty poignant critique of American empire it does not ask and answer the key question: "What's next?" The crisis
of neoliberalism and the end of cheap oil probably will eventually crush the US led global empire and dollar as the reserve currency.
Although it probably will be much slower and longer process then many expect.
Are we talking about 20, 40 or 80 years here?
But what is the alternative to the neoliberal and the US dominated global neolinberal empire established after dissolution of the
USSR in 1991? That's the question.
Notable quotes:
"... Empire understands nothing except ruthless expansion. It has no other raison d'etre. In the past this meant the violent acquisition of lands and territories by a militarized system where [miliraty] caste was very apparent and visible. But today the dealings of empire are far more duplicitous. The ruling order of this age expands empire via the acquisition of capital while using the military industrial complex to police its exploits. But there is an insidious social conditioning at work which has led the general public to where it is today, a state of "inverted totalitarianism" as political philosopher Sheldon Wolin explained. Indeed, capitalism has morphed into the unassailable religion of the age even among the working class. Its tenets are still viewed as sacrosanct. ..."
"... There is mass compliance to the dictates of the ruling class and this occurs most often without any prompting or debate whatsoever. In this dictatorship of money the poor are looked at with ridicule and contempt, and are often punished legally for their imposed poverty. ..."
"... Most Americans still believe they live in the greatest country on the planet. They believe the American military to be noble and that they always reluctantly go into or are forced into war. Indeed, both the Democrats and Republicans possess an uncanny ability to bridge their ideological distances when it comes to defending US militarism, the Pentagon and the war machine of imperialism. But this is tied to the defense of capitalism, the ruling class, and the ultimate reason for war: the protection of that class's global capital investments. ..."
"... Today Iran and Venezuela are once again in the crosshairs of the American Empire's belligerence. Their defiance to the dominant [neoliberal] socioeconomic order will simply not be tolerated by the global ruling caste, represented as the unquestioned "interests" of the United States. ..."
"... To be sure the American Empire, which has seldom seen a year without pillage of another nation or region, is now facing its greatest nemesis. Unheeded lessons of the past have made it thoroughly inoculated to its own demise. In short, it is drunk on its hubris and unable to grapple with its inevitable descent. ..."
"... The American Empire, one of the shortest lived in human history, has become the biggest threat to humanity ..."
"... But like all empires it will eventually fall. Its endless and costly wars on behalf of capital investments and profiteering are contributing to that demise ..."
"... The US Republic has come and gone - the Empire is failing rapidly despite massive spending to support it. Cecil Rhodes and his heirs dreamed of restoring Anglo American domination of the world yet despite all of the technology employed the US is losing grip. By sheer numbers (and a far more efficient dictatorship) China is moving to a dominant role. ..."
"... In the end, the elite has no problem to rebrand themselves any color it needs to take to rule again, and become totalitarian state. As it becomes in the Soviet Union and China. ..."
"... Another blame America article that fails to mention the International Banksters. They have the finger-pointing thingy down to an art form. ..."
"... How do you begin to change that? Most Americans have been brainwashed and zombified by Hollywood and MSM into revering and lionizing the military without question. The sheer amount of waste in the MIC is not only negligent, but criminal. By the time the sheep awaken, the empire will have run out of their money to pillage. The beast of empire requires new victims to feed off in order to sustain - it devours entire nations, pilfers resources and murders people. Is this really what the founding fathers wanted? ..."
"... Precisely right. It's as if we've painted ourselves into the proverbial corner ..."
" Capitalism's gratuitous wars and sanctioned greed have jeopardized the planet and filled it with refugees. Much of the
blame for this rests squarely on the shoulders of the government of the United States. Seventeen years after invading Afghanistan,
after bombing it into the 'stone age' with the sole aim of toppling the Taliban, the US government is back in talks with the
very same Taliban. In the interim it has destroyed Iraq, Libya and Syria. Hundreds of thousands have lost their lives to war
and sanctions, a whole region has descended into chaos, ancient cities -- pounded into dust."
– Arundhati Roy
"As naturally as the ruled always took the morality imposed upon them more seriously than did the rulers themselves, the
deceived masses are today captivated by the myth of success even more than the successful are. Immovably, they insist on the
very ideology which enslaves them. The misplaced love of the common people for the wrong which is done to them is a greater
force than the cunning of the authorities. "
― Theodor Adorno, Dialectic of Enlightenment: Philosophical Fragments
"I spent thirty-three years and four months in active military service as a member of this country's most agile military
force, the Marine Corps. I served in all commissioned ranks from Second Lieutenant to Major-General. And during that period,
I spent most of my time being a high class muscle-man for Big Business, for Wall Street and for the Bankers. In short, I was
a racketeer, a gangster for capitalism ."
― Smedley Butler, War is a Racket
"It is no longer a choice, my friends, between violence and nonviolence. It is either nonviolence or nonexistence. And the
alternative to disarmament, the alternative to a greater suspension of nuclear tests, the alternative to strengthening the
United Nations and thereby disarming the whole world, may well be a civilization plunged into the abyss of annihilation, and
our earthly habitat would be transformed into an inferno that even the mind of Dante could not imagine."
-- Martin Luther King, Jr., Remaining Awake Through a Great Revolution, 31 March 1968
Empire understands nothing except ruthless expansion. It has no other raison d'etre. In the past this meant the violent acquisition
of lands and territories by a militarized system where [miliraty] caste was very apparent and visible. But today the dealings of
empire are far more duplicitous. The ruling order of this age expands empire via the acquisition of capital while using the military
industrial complex to police its exploits. But there is an insidious social conditioning at work which has led the general public
to where it is today, a state of "inverted totalitarianism" as political philosopher Sheldon Wolin explained. Indeed, capitalism
has morphed into the unassailable religion of the age even among the working class. Its tenets are still viewed as sacrosanct.
Violence is the sole language of empire. It is this only currency it uses to enforce its precepts and edicts, both at home and
abroad. Eventually this language becomes internalized within the psyche of the subjects. Social and cultural conditioning maintained
through constant subtle messaging via mass media begins to mold the public will toward that of authoritarian conformity. The American
Empire is emblematic of this process. There is mass compliance to the dictates of the ruling class and this occurs most often
without any prompting or debate whatsoever. In this dictatorship of money the poor are looked at with ridicule and contempt, and
are often punished legally for their imposed poverty.
But the social conditioning of the American public has led toward a bizarre allegiance to its ruling class oppressors. Propaganda
still works here and most are still besotted with the notion of America being a bastion of "freedom and democracy." The growing gap
between the ultra-wealthy and the poor and the gutting of civil liberties are ignored. And blind devotion is especially so when it
comes to US foreign policy.
Most Americans still believe they live in the greatest country on the planet. They believe the American military to be noble
and that they always reluctantly go into or are forced into war. Indeed, both the Democrats and Republicans possess an uncanny ability
to bridge their ideological distances when it comes to defending US militarism, the Pentagon and the war machine of imperialism.
But this is tied to the defense of capitalism, the ruling class, and the ultimate reason for war: the protection of that class's
global capital investments.
The persecution of Chelsea Manning, much like the case of Julian Assange, is demonstrative of this. It is a crusade against truth
tellers that has been applauded from both sides of the American establishment, liberal and conservative alike. It does not matter
that she helped to expose American war crimes. On the contrary, this is seen as heresy to the Empire itself. Manning's crime was
exposing the underbelly of the beast. A war machine which targeted and killed civilians and journalists by soldiers behind a glowing
screen thousands of miles away, as if they were playing a video game.
Indeed, those deadened souls pulling the virtual trigger probably thought they were playing a video game since this is how the
military seduced them to serve in their ranks in the first place. A kind of hypnotic, addictive, algorithmic tyranny of sorts. It
is a form of escapism that so many young Americans are enticed by given their sad prospects in a society that has denuded the commons
as well as their future. That it was a war based on lies against an impoverished nation already deeply weakened from decades of American
led sanctions is inconsequential....
... ... ...
Today Iran and Venezuela are once again in the crosshairs of the American Empire's belligerence. Their defiance to the dominant
[neoliberal] socioeconomic order will simply not be tolerated by the global ruling caste, represented as the unquestioned "interests"
of the United States. The imposed suffering on these nations has been twisted as proof that they are now in need of American
salvation in the form of even more crippling sanctions, coups, neoliberal austerity and military intervention. As the corporate vultures
lie in wait for the next carcass of a society to feed upon, the hawks are busy building the case for the continuation and expansion
of capitalist wars of conquest.
Bolton and Pompeo are now the equivalent of the generals who carved up Numidia for the wealthy families of ancient Rome, with
Trump, the half-witted, narcissistic and cruel emperor, presiding over the whole in extremis farce. Indeed, the bloated orange Emperor
issued the latest of his decrees in his usual banal fashion, via tweet:
"If Iran wants to fight, that will be the official end of Iran. Never threaten the United States again!"
One can query when Iran, or any other nation has ever "threatened" the United States, but that question will never be asked by
the corporate press who are also in service to Empire. They are, in fact, its mouthpiece and advocate. The US has at least 900 military
bases and colonial outposts scattered around the planet, yet this is never looked at as imperialistic in the least by the establishment,
including its media. Scores of nations lie in ruins or are besieged with chaos and misery thanks to American bellicosity , from Libya
to Iraq and beyond. But the US never looks back in regret at any of its multiple forays, not even a few years back.
To be sure the American Empire, which has seldom seen a year without pillage of another nation or region, is now facing its
greatest nemesis. Unheeded lessons of the past have made it thoroughly inoculated to its own demise. In short, it is drunk on its
hubris and unable to grapple with its inevitable descent.
... ... ...
American Empire knows no other language sans brutality, deceit and belligerence...
... ... ...
The American Empire, one of the shortest lived in human history, has become the biggest threat to humanity ...
But like all empires it will eventually fall. Its endless and costly wars on behalf of capital investments and profiteering
are contributing to that demise . After all, billions of dollars are spent to keep the bloated military industrial complex afloat
in service to the ruling class while social and economic safety nets are torn to shreds...
Nowadays the US has a massive military and little else. And "when the only tool you have is a hammer, every problem has to
look like a nail" - Wesley Clark, Former US General.
14 hours ago
Twaddle. Capitalism has lifted out of poverty more people around the globe than all other "successful" systems combined; and
in a fraction of the time. Education. Health. Wealth. Not to mention Arts and Sciences.
Go demand a refund for your liberal education. And stop spreading lies.
11 hours ago (Edited)
Poppycock! Capitalism has traded real sovereign wealth for fiat debt backed funny money at the barrel of a gun! You assholes
have been forcing otherwise healthy communities into poverty for decades so you could steal their resources and molest their children!
Why? Because children are the only people impressed by your tiny d!cks!
The organization described the average sex tourist as a middle-aged white male from either Europe or North
America who often goes online to find the " best deals. " One particular Web site promised "nights of sex with two
young Thai girls for the price of a tank of gas."
Sowmia Nair, a Department of Justice agent, said the Thai government often "turns a blind eye" to child sex tourism because
of the country's economic reliance on the tourist trade in general . He also said police officers are often corrupt.
" Police have been known to guard brothels and even procure children for prostitution," Nair said. "Some police
directly exploit the children themselves."
A report from the International Bureau for Children's Rights said the majority of child prostitutes come from poor families
in northern Thailand, referred to as the "hill tribes." With limited economic opportunities and bleak financial circumstances,
these families, out of desperation, give their children to "recruiters," who promise them jobs in the city and then force the
children into prostitution.
Sometimes families themselves even prostitute their children or sell them into the sex trade for a minuscule sum of money.
This is not by accident! This is by design!
14 hours ago
Capitalism has nothing to do with this. For the average American the empire is a losing proposition.
13 hours ago (Edited)
Empire good. Emperor bad. Kingdom good. King bad. Country good. President bad. Village good. Idiot bad.
13 hours ago (Edited)
Empire is cancer. Especially the present one that leaves a trail of failed states and antangonism in its wake.
16 hours ago
We are part of a scientific dictatorship - the 'Ultimate Revolution' Huxley spoke of in 1962 where the oppressed willingly
submit to their enslavement. Social conditioning - promoted by continuous propaganda stressing that the state is their protector,
reinforced by endless 'terrorist threats' to keep the masses fearful is but one part of the system.
The state no longer has to use threats and fear of punishment to keep the masses under control - the masses have been convinced
that they are better off as slaves and serfs than they were as free men.
The US Republic has come and gone - the Empire is failing rapidly despite massive spending to support it. Cecil Rhodes
and his heirs dreamed of restoring Anglo American domination of the world yet despite all of the technology employed the US is
losing grip. By sheer numbers (and a far more efficient dictatorship) China is moving to a dominant role.
18 hours ago
Capitalism and corporatism are not the same. When corporate interests effectively wield gov power, you have corporatism, not
Capitalism.
14 hours ago
Corporatism=Fascism.
18 hours ago 'Muricanism is the gee-gaw of the chattering classes.
18 hours ago (Edited)
The US is its own worst enemy. They have no idea what they are doing. 2008 – "Oh dear, the global economy just blew up"
Its experts investigate and conclude it was a black swan.
It is a black swan if you don't consider debt. They use neoclassical economics that doesn't consider debt.
They can't work out why inflation isn't coming back and the real economy isn't recovering faster.
Look at the debt over-hang that's still left after 2008 in the graph above, that's the problem. The repayment on debt to banks
destroy money pushing the economy towards debt deflation.
QE can't enter the real economy as so many people are still loaded up with debt and there are too few borrowers.
QE can get into the markets inflating them and the US stock market is now at 1929 levels. They have created another asset price
bubble that is ready to collapse leading to another financial crisis.
We need a new scientific economics for globalisation, got any ideas?
What if we just stick some complex maths on top of 1920s neoclassical economics?
No one will notice.
They didn't either, but it's still got all its old problems.
The 1920s roared with debt based consumption and speculation until it all tipped over into the debt deflation of the Great
Depression. No one realised the problems that were building up in the economy as they used an economics that doesn't look at private
debt, neoclassical economics.
What's the problem?
The belief in the markets gets everyone thinking you are creating real wealth by inflating asset prices.
Bank credit pours into inflating asset prices rather than creating real wealth (as measured by GDP) as no one is looking
at the debt building up
1929 and 2008 look so similar because they are; it's the same economics and thinking.
The 1920s problem in the US is now everywhere, UK, US, Euro-zone, Japan and China.
20 hours ago (Edited)
Capitalism is based on darwinian economic competition driven by a desire to accumulate material wealth. When a capitalist becomes
sufficiently rich, he can (and does) buy politicians and armies to do his bidding. Ironically, although capitalism is based on
the assumption of competition, capitalists actually hate competition and harbor the urge to put competitors out of business. The
true goal of a capitalists is monopoly-- as long as it is them.
Imperialism is a logical (and historically predictable) expansion of capitalism.
18 hours ago
Capitalism may not be the path to peace, but just about every other ism, including socialism and communism delivered worse.
Attacking capitalism for common failings is off base.
15 hours ago
Socialism and ultimately communism appear when capitalism goes rampant, and it is normal for the socium to embrace socialism
when the inequality becomes too large.
In the end, the elite has no problem to rebrand themselves any color it needs to take to rule again, and become totalitarian
state. As it becomes in the Soviet Union and China.
So don't mistake the people's desire for equal world with totalitarian capitalism masked as socialism.
14 hours ago
the real issue is NO GROUP OF HUMANS can be trusted will any form of power. ever. period.
so it goes that no "xyz"ism" will ever work out for the whole. yet humans are social animals and seek to be in groups governed
by the very people that strive to lead that exhibit sociopathic tendencies, which are the worst possible leaders. how fuked up
is that?
so how can that work? it does for a while. then we end up in the same spot every time, turmoil, the forth turning.
the luck of life is the period of time you live during, where and what stage of human turmoil the society is in...
21 hours ago (Edited)
" Capitalism's gratuitous wars and sanctioned greed have jeopardized the planet and filled it with refugees".
Capitalism did all that huh? It had nothing to do with corrupt politicians in bed with corporations and banks. Now they even
have the military singing the same stupidity. Governments make these messes, not capitalism. Someone who risked their life for
a corrupt government giving the pieces of **** that put him there a free pass by blaming it on capitalism. What a moron. When
politicians hear this stupidity, it's like music to their ears. They know they've successfully shifted the blame to a simple ISM.
Governments want to blame the very thing that will fix all of this, for the sake of self-preservation.
18 hours ago
Every system acts to centralise power, even anarchism. So you say it was wealth that enabled what was to follow but it was
really power.. something every -ism will centralise and enable.
22 hours ago
Another blame America article that fails to mention the International Banksters. They have the finger-pointing thingy down
to an art form.
16 hours ago
Really! Did you miss the Smedley Butler quote?
22 hours ago
Could you please distinguish between capitalism and political, monetary, fiscal, press, and legal aberrations that can occur
in capitalist systems because of government sloth and malfeasance? Media monopoly, mass illegal immigration, and offshoring are
not the essence of capitalism. And socialist systems can see hideous abuses.
Please read something more than **** and Jane adventures.
23 hours ago
"... is still the owner of the world's biggest nuclear arsenal."
===
Here is the list of all nine countries
with nuclear weapons in descending order, starting with the country that has the most nuclear weapons at hand and ending with
the country that has the least amount of nuclear weapons
China is negotiating a militarybasein a strategic port of Djibouti, the president said, according to
the AFP news agency. The move raises the prospect of US and Chinesebases side-by-side in the ...
Oct 10, 2017 · China and the small African nation of Djibouti reached an agreement in July to let the People's Liberation Army
establish up its first overseas militarybase there. The base on Africa's east ...
China is building its first militarybaseinAfrica . America should be very nervous. ... In
Africa , China has found not just a market for money but for jobs and land -- crucial components of ...
23 hours ago (Edited)
Oh noes! 1 base in Africa.....meanwhile the empire has 800 outposts around the world and despite that, like a snowflake, is
bitching about China's one.
Isn't it fascinating how the Chinese do not find it necessary to resort to retarded regime change projects and stoopid kikery
to "win" influence? Easy peasy. Methinks the Anglo-Zionists can learn a trick or two from China.
23 hours ago
The empire of 800 outposts is puny compared to the 1960's and 1970's. I can provide the information if you'd like. Almost all
the 800 have company sized or smaller contingents. Still, I'd like to see much of it dismantled. No world Policeman.
23 hours ago
The entire world is in favor of a more peaceful planet Earth, except the military-industrial complex. Ron Paul
War puts money in their pockets. Lots of money. It's in the trillions of dollars.
23 hours ago (Edited)
How do you begin to change that? Most Americans have been brainwashed and zombified by Hollywood and MSM into revering
and lionizing the military without question. The sheer amount of waste in the MIC is not only negligent, but criminal. By the
time the sheep awaken, the empire will have run out of their money to pillage. The beast of empire requires new victims to feed
off in order to sustain - it devours entire nations, pilfers resources and murders people. Is this really what the founding fathers
wanted?
Now you know why wars happen. If "we the people" can't stop this beast, another nation's military will.
21 hours ago
@BH II
Precisely right. It's as if we've painted ourselves into the proverbial corner. The only way out of the morass is
to find men of very high character to correctly lead the way out. America needs a Socrates.
"... Being inspired by stories of success is one thing, but I think we've gone too far and created the cult of the entrepreneur. It starts with people idolizing the billionaires in hoodies and assuming they'll have the same success trajectory, despite the fact that most people don't experience that type of success with any of their businesses, let alone their first. Then enter a new vocabulary focused on "hustle" and "lean startup" and "minimum viable product," which glorifies working practically 24/7 for nothing more than equity and crossed fingers. Then add a dash of absurd investments, like the $41 million that went into startup Color before it even launched (it eventually failed spectacularly). ..."
"... The glorification of entrepreneurship naturally tempts people to use the term to build themselves up. This is especially evident on Twitter and LinkedIn where I've often seen entrepreneur listed in someone's bio without being able to figure out what he or she actually does. It also has the consequence of undermining people who work hard, achieve great success and are integral to a company's success without being entrepreneurs -- the Sheryl Sandberg rather than the Zuckerberg. ..."
"... With all the hype surrounding entrepreneurs, there's an elephant in the room: most people want the money, accolades, and power that come with being a successful entrepreneur, but they don't want to put in the years of hard work. ..."
"... Even if you accept the fact that being an entrepreneur involves no time off, long hours, and extremely limited resources, you still have to contend with luck. As much as you might want to be the next TechCrunch headline, and as much as you might have a great concept and the skills to make it happen, it might be the wrong time or the wrong place for your idea. ..."
"... Not everyone is prepared to spend years on a project that likely won't work out, and there's nothing wrong with that. ..."
Entrepreneurship is having a moment. Innovative people with the resources, know-how and spunk to bring their ideas to life have
been doing so since the dawn of civilization, but in the age of Silicon Valley tech startup success stories, crowdfunding platforms
like Kickstarter, and investment programs like Dragons' Den, you could say entrepreneurs have reached celebrity status.
Like the countless young girls singing into their hairbrushes and dreaming of becoming the next Beyonce, it seems like more and
more people are setting their sights on venturing out on their own to create the next big thing and become the next Mark Zuckerberg,
Jack Dorsey, or Elon Musk.
Being inspired by stories of success is one thing, but I think we've gone too far and created the cult of the entrepreneur. It
starts with people idolizing the billionaires in hoodies and assuming they'll have the same success trajectory, despite the fact
that most people don't experience that type of success with any of their businesses, let alone their first. Then enter a new vocabulary
focused on "hustle" and "lean startup" and "minimum viable product," which glorifies working practically 24/7 for nothing more than
equity and crossed fingers. Then add a dash of absurd investments, like the $41 million that went into startup Color before it even
launched (it eventually failed spectacularly).
The first problem I see with the cult of the entrepreneur is that for some people the title seems to take precedence over the
success of the product or service they created. Like an author who's never had a book published, calling yourself an entrepreneur
is meaningless if you can't point to the fruits of your entrepreneurship. The word has a misleading air of success.
The glorification of entrepreneurship naturally tempts people to use the term to build themselves up. This is especially evident
on Twitter and LinkedIn where I've often seen entrepreneur listed in someone's bio without being able to figure out what he
or she actually does. It also has the consequence of undermining people who work hard, achieve great success and are integral to
a company's success without being entrepreneurs -- the Sheryl Sandberg rather than the Zuckerberg.
The focus of any business should always be its customers and how you're providing value for them while making sure your business
model is sound and adaptable. There are a lot of moving parts and nobody can make it work alone. There are investors, business partners,
people who offer advice along the way, and, of course, the people who end up working for that company in its early stages and as
it grows. In fact, these people probably possess a lot of entrepreneurial qualities, but they don't get to call themselves entrepreneurs
because they work for someone else.
With all the hype surrounding entrepreneurs, there's an elephant in the room: most people want the money, accolades, and power
that come with being a successful entrepreneur, but they don't want to put in the years of hard work.
Even if you accept the fact that being an entrepreneur involves no time off, long hours, and extremely limited resources, you
still have to contend with luck. As much as you might want to be the next TechCrunch headline, and as much as you might have a great
concept and the skills to make it happen, it might be the wrong time or the wrong place for your idea.
As an entrepreneur you're
betting your livelihood and your career at every stage. You might see examples of perceived overnight successes all around you, but
you don't see the years of struggle and failure that often preceded them.
Bitstrips , which exploded onto the app scene recently, was founded in
2007, the same year the first iPhone came out. Even if you have all the confidence in the world in your idea, you don't know when
(if ever) the exact conditions needed for success will come together.
Not everyone is prepared to spend years on a project that likely won't work out, and there's nothing wrong with that.
Eschewing years of financial struggle and uncertainty to work for a company that has already proven itself does not mean you've
given up on success or sold yourself short.
The entrepreneurial spirit is a great thing that can manifest itself in different people in many different ways, regardless of
what position they hold in a company. Trying to impress people by calling yourself an entrepreneur on social media is not one of
them.
"... No other country in the Middle East is as important in countering America's rush to provide Israel with another war than Iraq. Fortunately for Iran, the winds of change in Iraq and the many other local countries under similar threat, thus, make up an unbroken chain of border to border support. This support is only in part due to sympathy for Iran and its plight against the latest bluster by the Zio-American bully. ..."
"... For the Russo/Sino pact nations, or those leaning in their direction, the definition of national foreign interest is no longer military, it is economic. Those with resources and therefore bright futures within the expanding philosophy and economic offerings of the Russo/Sino pact have little use any longer for the "Sorrows of Empire." These nation's leaders, if nothing more than to line their own pockets, have had a very natural epiphany: War is not, for them, profitable. ..."
"... Lebanon and Syria also take away the chance of a ground-based attack, leaving the US Marines and Army to stare longingly across the Persian Gulf open waters from Saudi Arabia or one of its too few and militarily insignificant allies in the southern Gulf region. ..."
"... As shown in a previous article, "The Return of the Madness of M.A.D," Iran like Russia and China, after forty years of US/Israeli threats, has developed new weapons and military capabilities, that combined with tactics will make any direct aggression towards it by American forces a fair fight. ..."
"... When Trump's limited political intelligence wakes up to the facts that his Zio masters want a war with Iran more than they want him as president, and that these forces can easily replace him with a Biden, Harris, Bernie or Warren political prostitute instead, even America's marmalade Messiah, will lose the flavor of his master's blood lust for war. ..."
"... I do particularly agree that elimination of Sadam was the greatest mistake US committed in Middle East. Devastating mistake for US policy. In the final evaluation it did create the most powerful Shi_ite crescent that now rules the Levant. Organizing failing uprising in Turkey against Erdogan was probably mistake of the same magnitude. Everything is lost for US now in the ME. ..."
"... The article evaluating the situation in ME is outstanding and perfect. Every move of US is a vanity. There is no more any opportunity to achieve any benefit for US. Who is responsible for all those screw ups ? US or Israel? ..."
"... However, the other side of the military coin is economic -- specifically sanctions on Iran (& China). Here ( I suspect) the US has prospects. Iran has said it has a "PhD" in sanctions busting. I hope that optimism is not misplaced. That US sanctions amount to a declaration of war on Iran is widely agreed. Sadly, it seems the EU in its usual spineless way will offer Iran more or less empty promises. ..."
"... I don't know if Russia and China have been showing restraint or still don't feel up to taking Uncle on very publicly or even covertly. The author assumes they might be willing to step up now for Iran, but the action in places like Syria suggests they might not. ..."
"... "War is a Racket" by Gen Smedley Butler (USMC – recipient of two Medals of Honor – no rear echelon pogue) is a must read. As true today as it was back when he wrote it. ..."
"... "The Axis of Sanity" – I like it, I like it! Probably quite closely related to the "reality-based community". ..."
"... "Karim al-Mohammadawi told the Arabic-language al-Ma'aloumeh news website that the US wants to turn Ain al-Assad airbase which is a regional base for operations and command into a central airbase for its fighter jets. ..."
"... He added that a large number of forces and military equipment have been sent to Ain al-Assad without any permission from the Iraqi government, noting that the number of American forces in Iraq has surpassed 50,000. ..."
"... Sea assault? Amphibious troop deployment? Are you serious? This is not WWII Normandy, Dorothy. That would be an unmitigated massacre. Weapons have improved a bit in the last 70 years if you have not noticed. ..."
"... first is a conspiracy of Israeli owned, Wall Street financed, war profiteering privatizing-pirate corporations These corporations enter, invade or control the war defeated place and privatize all of its infrastructure construction contracts from the defeated place or state (reason for massive destruction by bombing) and garner control over all the citizen services: retail oil and gas distribution, food supplies, electric power, communications, garbage and waste collection and disposal, street cleaning, water provisioning. traffic control systems, security, and so on.. Most of these corporations are privately owned public stock companies, controlled by the same wealthy Oligarchs that control "who gets elected and what the elected must do while in sitting in one of the seats of power at the 527 person USA. ..."
"... This article by Mr. Titley is the most hopeful article I've yet read demonstrating the coming death of US hegemony, with most of the rest of the civilized world apparently having turned against the world's worst Outlaw Nation. ..."
"... Netanyahu and the Ziocons better think twice about their longed for dream of the destruction of Iran. The Jews always push things too far. Karma can be a bitch. ..."
No other country in the Middle East is as important in countering America's rush to provide Israel with another war than Iraq.
Fortunately for Iran, the winds of change in Iraq and the many other local countries under similar threat, thus, make up an unbroken
chain of border to border support. This support is only in part due to sympathy for Iran and its plight against the latest bluster
by the Zio-American bully.
In the politics of the Middle East, however, money is at the heart of all matters. As such, this ring of defensive nations is
collectively and quickly shifting towards the new Russo/Sino sphere of economic influence. These countries now form a geo-political
defensive perimeter that, with Iraq entering the fold, make a US ground war virtually impossible and an air war very restricted in
opportunity.
If Iraq holds, there will be no war in Iran.
In the last two months, Iraq parliamentarians have been exceptionally vocal in their calls for all foreign military forces- particularly
US forces- to leave immediately. Politicians from both blocs of Iraq's divided parliament
called
for a vote to expel US troops and promised to schedule an extraordinary session to debate the matter ."Parliament must clearly
and urgently express its view about the ongoing American violations of Iraqi sovereignty," said Salam al-Shimiri, a lawmaker
loyal to the populist cleric
Moqtada al-Sadr
.
Iraq's ambassador to Moscow, Haidar Mansour Hadi, went further saying that Iraq "does not
want a new devastating war in the region." He t old a press conference in Moscow this past week, "Iraq is a sovereign
nation. We will not let [the US] use our territory," he said. Other comments by Iraqi Prime Minister Adil Abdul-Mahdi agreed.
Other MPs called for
a timetable for complete US troop withdrawal.
Then a motion was introduced
demanding
war reparations from the US and Israel for using internationally banned weapons while destroying Iraq for seventeen years and
somehow failing to find those "weapons of mass destruction."
As Iraq/Iran economic ties continue to strengthen, with Iraq recently signing on for billions of cubic meters of Iranian natural
gas, the shift towards Russian influence- an influence that prefers peace- was certified as Iraq sent a delegation to Moscow to negotiate
the purchase of the Russian S-400 anti-aircraft system.
To this massive show of pending democracy and rapidly rising Iraqi nationalism, US Army spokesman, Colonel Ryan Dillon, provided
the kind of delusion only the Zio-American military is known for, saying,
"Our continued presence in Iraq will be conditions-based, proportional to need, in coordination with and by the approval of
the Iraqi government."
Good luck with that.
US influence in Iraq came to a possible conclusion this past Saturday, May 18, 2019, when it was reported that the Iraqi parliament
would vote
on a bill compelling the invaders to leave . Speaking about the vote on the draft bill, Karim Alivi, a member of the Iraqi parliament's
national security and defense committee, said on Thursday that the country's two biggest parliamentary factions -- the Sairoon bloc,
led by Shia cleric Muqtada al-Sadr, and the Fatah alliance, headed by secretary general of the Badr Organization, Hadi al-Ameri --
supported the bill. Strangely, Saturday's result has not made it to the media as yet, and American meddling would be a safe guess
as to the delay, but the fact that this bill would certainly have passed strongly shows that Iraq well understands the weakness of
the American bully: Iraq's own US militarily imposed democracy.
Iraq shares a common border with Iran that the US must have for any ground war. Both countries also share a similar religious
demographic where Shia is predominant and the plurality of cultures substantially similar and previously living in harmony. Both
also share a very deep seeded and deserved hatred of Zio- America. Muqtada al-Sadr, who, after coming out first in the 2018 Iraqi
elections, is similar to Hizbullah's Hassan Nasrallah in his religious and military influence within the well trained and various
Shia militias. He is firmly aligned with Iran as is Fattah Alliance. Both detest Zio- America.
A ground invasion needs a common and safe border. Without Iraq, this strategic problem for US forces becomes complete. The other
countries also with borders with Iran are Armenia, Azerbaijan, Turkmenistan, Turkey, Afghanistan and Pakistan. All have several good
reasons that they will not, or cannot, be used for ground forces.
With former Armenian President Robert Kocharian under arrest in the aftermath of the massive anti-government 2018 protests, Bolton
can check that one off the list first. Azerbaijan is mere months behind the example next door in Armenia,
with protests increasing and indicating
a change towards eastern winds. Regardless, Azerbaijan, like Turkmenistan, is an oil producing nation and as such is firmly aligned
economically with Russia. Political allegiance seems obvious since US influence is limited in all three countries to blindly ignoring
the massive additional corruption and human rights violations by Presidents Ilham Aliyev and
Gurbanguly Berdimuhamedow .
However, Russian economic influence pays in cash. Oil under Russian control is the lifeblood of both of these countries.
Recent developments and new international contracts with Russia clearly show whom these leaders are actually listening to.
Turkey would appear to be firmly shifting into Russian influence. A NATO member in name only. Ever since he
shot down his first-
and last – Russian fighter jet, Turkish president Recep Tayyip Erdogan has thumbed his nose at the Americans. Recently
he refused to succumb to pressure and will receive Iranian oil and, in July, the Russian S-400 anti-aircraft/missile system. This
is important since there is zero chance Putin will relinquish command and control or see them missiles used against Russian armaments.
Now, Erdogan is considering replacing his purchase of thirty US F-35s with the
far superior Russian SU- 57 and a few S-500s for good measure.
Economically, America did all it could to stop the Turk Stream gas pipeline installed by Russia's Gazprom, that runs through Turkey
to eastern Europe and will provide $billions to Erdogan and Turkey
. It
will commence operation this year. Erdogan continues to purchase Iranian oil and to call for Arab nations to come together against
US invasion in Iran. This week, Turkish Defense Minister Hulusi Akar renewed Turkey's resolve, saying his country
is preparing for potential American
sanctions as a deadline reportedly set by the US for Ankara to cancel the S-400 arms deal with Russia or face penalties draws
near.
So, Turkey is out for both a ground war and an air war since the effectiveness of all those S-400's might be put to good use if
America was to launch from naval positions in the Mediterranean. Attacking from the Black Sea is out since it is ringed by countries
under Russo/Sino influence and any attack on Iran will have to illegally cross national airspace aligned with countries preferring
the Russo/Sino alliance that favours peace. An unprovoked attack would leave the US fleet surrounded with the only safe harbours
in Romania and Ukraine. Ships move much slower than missiles.
Afghanistan is out, as the Taliban are winning. Considering recent peace talks from which they walked out and next
slaughtered a police station near the western border with
Iran, they have already won. Add the difficult terrain near the Iranian border and a ground invasion is very unlikely
Although new Pakistani President Amir Khan has all the power and authority of a primary school crossing guard, the real power
within the Pakistani military, the ISI, is more than tired of American influence
. ISI has propagated the Taliban for years and often gave
refuge to Afghan anti-US forces allowing them to use their common border for cover. Although in the past ISI has been utterly mercenary
in its very duplicitous- at least- foreign allegiances, after a decade of US drone strikes on innocent Pakistanis, the chance of
ground-based forces being allowed is very doubtful. Like Afghanistan terrain also increases this unlikelihood.
Considerations as to terrain and location for a ground war and the resulting failure of not doing so was shown to Israel previously
when, in 2006 Hizbullah virtually obliterated its ground attack, heavy armour and battle tanks in the hills of southern Lebanon.
In further cautionary detail, this failure cost PM Ehud Olmert his job.
For the Russo/Sino pact nations, or those leaning in their direction, the definition of national foreign interest is no longer
military, it is economic. Those with resources and therefore bright futures within the expanding philosophy and economic offerings
of the Russo/Sino pact have little use any longer for the "Sorrows of Empire." These nation's leaders, if nothing more than to line
their own pockets, have had a very natural epiphany: War is not, for them, profitable.
For Iran, the geographic, economic and therefore geo-political ring of defensive nations is made complete by Syria, Lebanon and
Iraq. Syria, like Iraq, has every reason to despise the Americans and similar reasons to embrace Iran, Russia, China and border neighbour
Lebanon. Syria now has its own Russian S-300 system which is already bringing down Israeli missiles. It is surprising that Lebanon
has not requested a few S-300s of their own. No one knows what Hizbullah has up its sleeve, but it has been enough to keep the Israelis
at bay. Combined with a currently more prepared Lebanese army, Lebanon under the direction of Nasrallah is a formidable nation for
its size. Ask Israel.
Lebanon and Syria also take away the chance of a ground-based attack, leaving the US Marines and Army to stare longingly across
the Persian Gulf open waters from Saudi Arabia or one of its too few and militarily insignificant allies in the southern Gulf region.
Friendly airspace will also be vastly limited, so also gone will be the tactical element of surprise of any incoming attack. The
reality of this defensive ring of nations means that US military options will be severely limited. The lack of a ground invasion
threat and the element of surprise will allow Iranian defences to prioritize and therefore be dramatically more effective. As shown
in a previous article, "The Return
of the Madness of M.A.D," Iran like Russia and China, after forty years of US/Israeli threats, has developed new weapons
and military capabilities, that combined with tactics will make any direct aggression towards it by American forces a fair fight.
If the US launches a war it will go it alone except for the few remaining US lapdogs like the UK, France, Germany and Australia,
but with anti-US emotions running as wild across the EU as in the southern Caspian nations, the support of these Zionist influenced
EU leaders is not necessarily guaranteed.
Regardless, a lengthy public ramp-up to stage military assets for an attack by the US will be seen by the vast majority of the
world- and Iran- as an unprovoked act of war. Certainly at absolute minimum Iran will close the Straits of Hormuz, throwing the price
of oil skyrocketing and world economies into very shaky waters. World capitalist leaders will not be happy. Without a friendly landing
point for ground troops, the US will either have to abandon this strategy in favour of an air war or see piles of body bags of US
servicemen sacrificed to Israeli inspired hegemony come home by the thousands just months before the '20 primary season. If this
is not military and economic suicide, it is certainly political.
Air war will likely see a similar disaster. With avenues of attack severely restricted, obvious targets such as Iran's non-military
nuclear program and major infrastructure will be thus more easily defended and the likelihood of the deaths of US airmen similarly
increased.
In terms of Naval power, Bolton would have only the Mediterranean as a launch pad, since using the Black Sea to initiate war will
see the US fleet virtually surrounded by nations aligned with the Russo/Sino pact. Naval forces, it should be recalled, are, due
to modern anti-ship technologies and weapons, now the sitting ducks of blusterous diplomacy. A hot naval war in the Persian Gulf,
like a ground war, will leave a US death toll far worse than the American public has witnessed in their lifetimes and the US navy
in tatters.
Trump is already
reportedly
seething that his machismo has been tarnished by Bolton and Pompeo's false assurances of an easy overthrow of Maduro in Venezuela.
With too many top generals getting jumpy about him initiating a hot war with Iraq, Bolton's stock in trade-war is waning. Trump basks
in being the American bully personified, but he and his ego will not stand for being exposed as weak. Remaining as president is necessary
to stoke his shallow character. When Trump's limited political intelligence wakes up to the facts that his Zio masters want a war
with Iran more than they want him as president, and that these forces can easily replace him with a Biden, Harris, Bernie or Warren
political prostitute instead, even America's marmalade Messiah, will lose the flavor of his master's blood lust for war.
In two
excellent articles in Asia times by Pepe Escobar, he details the plethora of projects, agreements, and cooperation that are
taking place from Asia
to the Mid-East to the Baltics . Lead by Russia and China this very quickly developing Russo/Sino pact of economic opportunity
and its intentions of "soft power" collectively spell doom for Zio-America's only remaining tactics of influence: military intervention.
States, Escobar:
"We should know by now that the heart of the 21 st Century Great Game is the myriad layers of the battle between
the United States and the partnership of Russia and China. The long game indicates Russia and China will break down language and
cultural barriers to lead Eurasian integration against American economic hegemony backed by military might."
The remaining civilized world, that which understands the expanding world threat of Zio-America, can rest easy. Under the direction
of this new Russo/Sino influence, without Iraq, the US will not launch a war on Iran.
This growing Axis of Sanity surrounds Iran geographically and empathetically, but more importantly, economically. This economy,
as clearly stated by both Putin and Xi, does not benefit from any further wars of American aggression. In this new allegiance to
future riches, it is Russian and China that will call the shots and a shooting war involving their new client nations will not be
sanctioned from the top.
However, to Putin, Xi and this Axis of Sanity: If American wishes to continue to bankrupt itself by ineffective military adventures
of Israel's making, rather than fix its own nation that is in societal decline and desiccated after decades of increasing Zionist
control, well
That just good for business!
About the Author:Brett Redmayne-Titley has published over 170 in-depth articles over the past eight years for news
agencies worldwide. Many have been translated and republished. On-scene reporting from important current events has been an emphasis
that has led to his many multi-part exposes on such topics as the Trans-Pacific Partnership negotiations, NATO summit, Keystone XL
Pipeline, Porter Ranch Methane blow-out, Hizbullah in Lebanon, Erdogan's Turkey and many more. He can be reached at: live-on-scene
((at)) gmx.com. Prior articles can be viewed at his archive: www.watchingromeburn.uk
When Trump's limited political intelligence wakes up to the facts that his Zio masters want a war with Iran more than they
want him as president, and that these forces can easily replace him with a Biden, Harris, Bernie or Warren political prostitute
instead, even America's marmalade Messiah, will lose the flavor of his master's blood lust for war.
I believe you are far
too generous in your estimation of his ability to distinguish between flavors of any type. Otherwise, your analysis is insightful
and thorough.
The U.S. is in the same position today that we were aboard Nimitz back in 1980. Too far from Tehran to start a war or even to
find our people. We are perhaps in even a far worse position in that today, Iran holds no hostages. There's nothing so 'noble'
as 44 hostages to inspire war today. This here is merely at the behest of Israel and the deep state profit centers for mere fun
and games and cash and prizes. Iran, overall, is nothing. Obama put Iran away for what, a billion-five? And Jared, Bolton and
Pompeo dredged it all back up again? Care to guess the first-night expense of a shock and awe on Tehran? It's unthinkable.
I used to like Israel. The Haifa-Tel Av-iv-Jerusalem-Galili loop was pretty cool. The PLO hadn't quite started their game,
we could move freely about the country. It's where the whole thing started. And, unlike Italy and Spain, they treated us Americans
ok. They were somewhat war torn. But now? They're a destructive monolith, they're good at hiding it and further, they make disastrous
miscalculations. Eliminating Saddam was huge. Turns out, Saddam was the only sane one. The last vestiges of Saddam's nuclear program
went up in the attacks on the Osirak reactor that Israel bombed in 1981. Why did they push for the elimination of Saddam afterwards?
Why the lies? Miscalculation.
This here with Iran won't travel further than threats and horseshit. I hope. Lots of bleating and farting. Someone agrees.
Oil dropped three or four bucks today.
"the resulting failure of not doing so was shown to Israel previously when, in 2016 Hezbollah virtually obliterated its ground
attack, heavy amour and battle tanks in the hills of southern Lebanon."
I do particularly agree that elimination of Sadam was the greatest mistake US committed in Middle East. Devastating mistake
for US policy. In the final evaluation it did create the most powerful Shi_ite crescent that now rules the Levant. Organizing
failing uprising in Turkey against Erdogan was probably mistake of the same magnitude. Everything is lost for US now in the ME.
Threatening Iran is now simply grotesque.
Concerning the article. The article evaluating the situation in ME is outstanding and perfect. Every move of US is a vanity.
There is no more any opportunity to achieve any benefit for US. Who is responsible for all those screw ups ? US or Israel?
However, the other side of the military coin is economic -- specifically sanctions
on Iran (& China). Here ( I suspect) the US has prospects. Iran has said it has a "PhD" in sanctions busting. I hope that optimism
is not misplaced. That US sanctions amount to a declaration of war on Iran is widely agreed. Sadly, it seems the EU in its usual
spineless way will offer Iran more or less empty promises.
Is the author unaware of the nation of Saudi Arabia and the fact that they are new BFFs with Israel. They have come out quite
openly they'd like to see Iran attacked. That whole Sunni Wahabism vs. Shia thing is a heck of alot older than this current skirmish.
Being that SA has a border w/ the Persian Gulf and that Kuwait who is even CLOSER may be agreeable to be a staging area, why
the hand wringing about this nation & that nation, etc. The US would be welcome to stage an air and sea assault using Saudi bases
followed up by amphibious troop deployment if need be. But given the proximity they could probably strong arm Kuwait to act as
a land bridge, in a pinch.
So will we expect the follow up article discussing this glaring omission, or am I missing some great development re: S.Arabia's
disposition and temperament regarding all this.
The transformed relationship between Russia and Turkey illustrates perfectly the shifting sands of strategic alliances as we cross
the desert towards destiny. https://www.ghostsofhistory.wordpress.com/
I don't know if Russia and China have been showing restraint or still don't feel up to taking Uncle on very publicly or even
covertly. The author assumes they might be willing to step up now for Iran, but the action in places like Syria suggests they
might not.
As for the costs of taking on Iran, while one cannot underestimate the cocksuredness of Uncle to take on Iran with a 2003 "Iraq
will be a cakewalk" attitude, the resulting air war will likely not be as costly to Uncle as the author believes, but the thought
of flag-draped coffins in the thousands will certainly deter a land invasion. If there is any action at all, it will be air interdiction
and missile attack.
It is curious that Uncle has not already resorted to his favorite tactic of declaring a No-Fly zone already but instead merely
hinted that airliner safety cannot be guaranteed; this is likely just another form of sanction since Iran receives money for each
airliner that transits its airspace, and a couple of Uncle's putative allies supply Iran with ATC equipment and services.
Uncle's Navy has already demonstrated a willingness to shoot down an airliner in Iranian airspace, so it is no idle threat,
kind of like the mobster looking at a picture of your family and saying, "Nice family you have there; it would be a shame if anything
happened to them."
"War is a Racket" by Gen Smedley Butler (USMC – recipient of two Medals of Honor – no rear echelon pogue) is a must read.
As true today as it was back when he wrote it.
If the US launches a war it will go it alone except for the few remaining US lapdogs like the UK, France, Germany and Australia,
but with anti-US emotions running as wild across the EU as in the southern Caspian nations, the support of these Zionist influenced
EU leaders is not necessarily guaranteed.
Stasi " Merkel muss weg " (Merkel must go) is too weak to even think about taking Germanstan into such a foolish adventure.
Maybe the Kosher Kingdom of simpletons, especially under American-born Turkish "Englishman" (((Boris Kemal Bey))), another
psycho like (((Baron Levy's))) Scottish warmonger Blair.
Iraqi MP: US after Turning Ain Al-Assad into Central Airbase in Iraq
FARSNEWS
"Karim al-Mohammadawi told the Arabic-language al-Ma'aloumeh news website that the US wants to turn Ain al-Assad airbase
which is a regional base for operations and command into a central airbase for its fighter jets.
He added that a large number of forces and military equipment have been sent to Ain al-Assad without any permission from
the Iraqi government, noting that the number of American forces in Iraq has surpassed 50,000.
Al-Mohammadawi said that Washington does not care about Iraq's opposition to using the country's soil to target the neighboring
states.
In a relevant development on Saturday, media reports said that Washington has plans to set up military bases and increasing
its troops in Iraq, adding the US is currently engaged in expanding its Ain al-Assad military base in al-Anbar province."
The US would be welcome to stage an air and sea assault using Saudi bases followed up by amphibious troop deployment if
need be. But given the proximity they could probably strong arm Kuwait to act as a land bridge, in a pinch.
Sea assault? Amphibious troop deployment? Are you serious? This is not WWII Normandy, Dorothy. That would be an unmitigated
massacre. Weapons have improved a bit in the last 70 years if you have not noticed.
Also minor point, LOL, but Kuwait is a "landbridge" between Saudi Arabia and Iraq Unless you are proposing the US attacks
Iraq (again!) which it would have to do to achieve a "landbridge" to Iran. Another good reason Iraq is acquiring the S-400.
More minor points: 1. South Iraq is ALL shiite. 2. Kuwait is SMALL i.e. a BIG target for thousands of missiles
@Ilyana_Rozumova
your question of responsibility is very intuitive.. two general answers.. both need deep analysis..
first is a conspiracy of Israeli owned, Wall Street financed, war profiteering privatizing-pirate corporations These corporations
enter, invade or control the war defeated place and privatize all of its infrastructure construction contracts from the defeated
place or state (reason for massive destruction by bombing) and garner control over all the citizen services: retail oil and gas
distribution, food supplies, electric power, communications, garbage and waste collection and disposal, street cleaning, water
provisioning. traffic control systems, security, and so on.. Most of these corporations are privately owned public stock companies,
controlled by the same wealthy Oligarchs that control "who gets elected and what the elected must do while in sitting in one of
the seats of power at the 527 person USA.
2nd is the impact of the laws that deny competition in a nation sworn to a method of economics (capitalism) that depends on
competition for its success. Another group of massive in size mostly global corporations again owned from Jerusalem, NYC, City
of London, etc. financed at wall street, use rule of law to impose on Americans and many of the people of the world, a blanket
of economic and anti competitive laws and monopoly powers. These monopolist companies benefit from the copyright and patent laws,
which create monopolies from hot thin air. These laws of monopolies coupled to the USA everything is a secret government have
devastated competitive capitalism in America and rendered American Universities high school level teaching but not learning bureaucracies.
Monopolies and state secrets between insider contractors were suppose to deny most of the world from competing; but without
competition ingenuity is lost. Monopoly lordships and state secrets were supposed to make it easy for the monopoly powered corporations
to overpower and deny any and all would be competition; hence they would be the only ones getting rich.. But China's Huawei will
be Linux based and Tin not Aluminium in design, far superior technology to anything these monopoly powered retards have yet developed
especially in the high energy communications technologies (like 5G, Artificial Intelligence, and Robotics). In other words copyrights,
patents and the US military were suppose to keep the world, and the great ingenuity that once existed in the person of every American,
from competing, but the only people actually forced out of the technology competition were the ingenious, for they were denied
by copyright and patents to compete. Now those in power at the USA will make Americans pay again as the corporations that run
things try to figure out how to catch up to the Chinese and Russian led Eastern world. Modi's election in India is quite interesting
as both China and Russia supported it, yet, Modi says he is going to switch to the USA for copyrighted and patented stuff?
on the issue of continued USA presence in Iraq, Syria, Yemen, Lebanon, ..
"Our continued presence in Iraq will be conditions-based, proportional to need, in coordination with and by the approval of
the Iraqi government." <that's a joke, first off, I never desired to be in Iraq, and I do not desire USA military or American
presence in Iraq, do You? <blatant disregard for the needs of America.. IMO. Bring the troops home. If the USA would only leave
Iraq to the Iraqis and get to work making America competitive again they would once again enjoy a great place in the world. But
one thing i can tell you big giant wall street funded corporations, and reliance on degree credentials instead of job performance,
will never be the reason America is great.
This article by Mr. Titley is the most hopeful article I've yet read demonstrating the coming death of US hegemony, with most
of the rest of the civilized world apparently having turned against the world's worst Outlaw Nation.
Trump has allowed madmen
Bolton and Pompeo to get this country into an awful mess – all for the sake of Israel and the Zionists.
He needs to find a face-saving
way to get out before Washington gets its long needed comeuppance. But how can Trump accomplish this as long as Bolton, in particular,
continues to be the man who most has his ear? If Titley is correct, then Trump had better start listening to his military leaders
instead.
Netanyahu and the Ziocons better think twice about their longed for dream of the destruction of Iran. The Jews always push
things too far. Karma can be a bitch.
"... Like many of its Wall Street counterparts, Boeing also used complexity as a mechanism to obfuscate and conceal activity that is incompetent, nefarious and/or harmful to not only the corporation itself but to society as a whole (instead of complexity being a benign byproduct of a move up the technology curve). ..."
"... The economists who built on Friedman's work, along with increasingly aggressive institutional investors, devised solutions to ensure the primacy of enhancing shareholder value, via the advocacy of hostile takeovers, the promotion of massive stock buybacks or repurchases (which increased the stock value), higher dividend payouts and, most importantly, the introduction of stock-based pay for top executives in order to align their interests to those of the shareholders. These ideas were influenced by the idea that corporate efficiency and profitability were impinged upon by archaic regulation and unionization, which, according to the theory, precluded the ability to compete globally. ..."
"... "Return on Net Assets" (RONA) forms a key part of the shareholder capitalism doctrine. ..."
"... If the choice is between putting a million bucks into new factory machinery or returning it to shareholders, say, via dividend payments, the latter is the optimal way to go because in theory it means higher net returns accruing to the shareholders (as the "owners" of the company), implicitly assuming that they can make better use of that money than the company itself can. ..."
"... It is an absurd conceit to believe that a dilettante portfolio manager is in a better position than an aviation engineer to gauge whether corporate investment in fixed assets will generate productivity gains well north of the expected return for the cash distributed to the shareholders. But such is the perverse fantasy embedded in the myth of shareholder capitalism ..."
"... When real engineering clashes with financial engineering, the damage takes the form of a geographically disparate and demoralized workforce: The factory-floor denominator goes down. Workers' wages are depressed, testing and quality assurance are curtailed. ..."
The fall of the Berlin Wall and the corresponding end of the Soviet Empire gave the fullest impetus imaginable to the forces of
globalized capitalism, and correspondingly unfettered access to the world's cheapest labor. What was not to like about that? It afforded
multinational corporations vastly expanded opportunities to fatten their profit margins and increase the bottom line with seemingly
no risk posed to their business model.
Or so it appeared. In 2000, aerospace engineer L.J. Hart-Smith's remarkable paper, sardonically titled
"Out-Sourced Profits – The Cornerstone of Successful Subcontracting," laid
out the case against several business practices of Hart-Smith's previous employer, McDonnell Douglas, which had incautiously ridden
the wave of outsourcing when it merged with the author's new employer, Boeing. Hart-Smith's intention in telling his story was a
cautionary one for the newly combined Boeing, lest it follow its then recent acquisition down the same disastrous path.
Of the manifold points and issues identified by Hart-Smith, there is one that stands out as the most compelling in terms of understanding
the current crisis enveloping Boeing: The embrace of the metric "Return on Net Assets" (RONA). When combined with the relentless
pursuit of cost reduction (via offshoring), RONA taken to the extreme can undermine overall safety standards.
Related to this problem is the intentional and unnecessary use of complexity as an instrument of propaganda. Like many of its
Wall Street counterparts, Boeing also used complexity as a mechanism to obfuscate and conceal activity that is incompetent, nefarious
and/or harmful to not only the corporation itself but to society as a whole (instead of complexity being a benign byproduct of a
move up the technology curve).
All of these pernicious concepts are branches of the same poisoned tree: "
shareholder capitalism ":
[A] notion best epitomized by Milton Friedman that the only social
responsibility of a corporation is to increase its profits, laying the groundwork for the idea that shareholders, being the owners
and the main risk-bearing participants, ought therefore to receive the biggest rewards. Profits therefore should be generated
first and foremost with a view toward maximizing the interests of shareholders, not the executives or managers who (according
to the theory) were spending too much of their time, and the shareholders' money, worrying about employees, customers, and the
community at large. The economists who built on Friedman's work, along with increasingly aggressive institutional investors, devised
solutions to ensure the primacy of enhancing shareholder value, via the advocacy of hostile takeovers, the promotion of massive
stock buybacks or repurchases (which increased the stock value), higher dividend payouts and, most importantly, the introduction
of stock-based pay for top executives in order to align their interests to those of the shareholders. These ideas were influenced
by the idea that corporate efficiency and profitability were impinged upon by archaic regulation and unionization, which, according
to the theory, precluded the ability to compete globally.
"Return on Net Assets" (RONA) forms a key part of the shareholder capitalism doctrine. In essence, it means maximizing the returns
of those dollars deployed in the operation of the business. Applied to a corporation, it comes down to this: If the choice is between
putting a million bucks into new factory machinery or returning it to shareholders, say, via dividend payments, the latter is the
optimal way to go because in theory it means higher net returns accruing to the shareholders (as the "owners" of the company), implicitly
assuming that they can make better use of that money than the company itself can.
It is an absurd conceit to believe that a dilettante
portfolio manager is in a better position than an aviation engineer to gauge whether corporate investment in fixed assets will generate
productivity gains well north of the expected return for the cash distributed to the shareholders. But such is the perverse fantasy
embedded in the myth of shareholder capitalism.
Engineering reality, however, is far more complicated than what is outlined in university MBA textbooks. For corporations like
McDonnell Douglas, for example, RONA was used not as a way to prioritize new investment in the corporation but rather to justify
disinvestment in the corporation. This disinvestment ultimately degraded the company's underlying profitability and the quality
of its planes (which is one of the reasons the Pentagon helped to broker the merger with Boeing; in another perverse echo of the
2008 financial disaster, it was a politically engineered bailout).
RONA in Practice
When real engineering clashes with financial engineering, the damage takes the form of a geographically disparate and demoralized
workforce: The factory-floor denominator goes down. Workers' wages are depressed, testing and quality assurance are curtailed. Productivity
is diminished, even as labor-saving technologies are introduced. Precision machinery is sold off and replaced by inferior, but cheaper,
machines. Engineering quality deteriorates. And the upshot is that a reliable plane like Boeing's 737, which had been a tried and
true money-spinner with an impressive safety record since 1967, becomes a high-tech death trap.
The drive toward efficiency is translated into a drive to do more with less. Get more out of workers while paying them less. Make
more parts with fewer machines. Outsourcing is viewed as a way to release capital by transferring investment from skilled domestic
human capital to offshore entities not imbued with the same talents, corporate culture and dedication to quality. The benefits to
the bottom line are temporary; the long-term pathologies become embedded as the company's market share begins to shrink, as the airlines
search for less shoddy alternatives.
You must do one more thing if you are a Boeing director: you must erect barriers to bad news, because there is nothing that bursts
a magic bubble faster than reality, particularly if it's bad reality.
The illusion that Boeing sought to perpetuate was that it continued to produce the same thing it had produced for decades: namely,
a safe, reliable, quality airplane. But it was doing so with a production apparatus that was stripped, for cost reasons, of many
of the means necessary to make good aircraft. So while the wine still came in a bottle signifying Premier Cru quality, and still
carried the same price, someone had poured out the contents and replaced them with cheap plonk.
And that has become remarkably easy to do in aviation. Because Boeing is no longer subject to proper independent regulatory scrutiny.
This is what happens when you're allowed to "
self-certify" your own airplane , as the Washington Post described: "One Boeing engineer would conduct a test of a particular
system on the Max 8, while another Boeing engineer would act as the FAA's representative, signing on behalf of the U.S. government
that the technology complied with federal safety regulations."
This is a recipe for disaster. Boeing relentlessly cut costs, it outsourced across the globe to workforces that knew nothing about
aviation or aviation's safety culture. It sent things everywhere on one criteria and one criteria only: lower the denominator. Make
it the same, but cheaper. And then self-certify the plane, so that nobody, including the FAA, was ever the wiser.
Boeing also greased the wheels in Washington to ensure the continuation of this convenient state of regulatory affairs for the
company. According to OpenSecrets.org ,
Boeing and its affiliates spent $15,120,000 in lobbying expenses in 2018, after spending, $16,740,000 in 2017 (along with a further
$4,551,078 in 2018 political contributions, which placed the company 82nd out of a total of 19,087 contributors). Looking back at
these figures over the past four elections (congressional and presidential) since 2012, these numbers represent fairly typical spending
sums for the company.
But clever financial engineering, extensive political lobbying and self-certification can't perpetually hold back the effects
of shoddy engineering. One of the sad byproducts of the FAA's acquiescence to "self-certification" is how many things fall through
the cracks so easily.
"... China loses the sale. This is why Beijing, which runs $350 billion to $400 billion in annual trade surpluses at our expense is howling loudest. Should Donald Trump impose that 25% tariff on all $500 billion in Chinese exports to the USA, it would cripple China's economy. Factories seeking assured access to the U.S. market would flee in panic from the Middle Kingdom. ..."
"... The Fordney-McCumber Tariff gave Presidents Warren Harding and Calvin Coolidge the revenue to offset the slashing of Wilson's income taxes, igniting that most dynamic of decades -- the Roaring '20s. ..."
"... Once a nation is hooked on the cheap goods that are the narcotic free trade provides, it is rarely able to break free. The loss of its economic independence is followed by the loss of its political independence, the loss of its greatness and, ultimately, the loss of its national identity. ..."
As his limo carried him to work at the White House Monday, Larry Kudlow could not have been pleased with the headline in The Washington
Post: "Kudlow Contradicts Trump on Tariffs."
The story began: "National Economic Council Director Lawrence Kudlow acknowledged Sunday that American consumers end up paying
for the administration's tariffs on Chinese imports, contradicting President Trump's repeated inaccurate claim that the Chinese foot
the bill."
A free trade evangelical, Kudlow had conceded on Fox News that consumers pay the tariffs on products made abroad that they purchase
here in the U.S. Yet that is by no means the whole story.
A tariff may be described as a sales or consumption tax the consumer pays, but tariffs are also a discretionary and an optional
tax.
If you choose not to purchase Chinese goods and instead buy comparable goods made in other nations or the USA, then you do not
pay the tariff.
China loses the sale. This is why Beijing, which runs $350 billion to $400 billion in annual trade surpluses at our expense is
howling loudest. Should Donald Trump impose that 25% tariff on all $500 billion in Chinese exports to the USA, it would cripple China's
economy. Factories seeking assured access to the U.S. market would flee in panic from the Middle Kingdom.
Tariffs were the taxes that made America great. They were the taxes relied upon by the first and greatest of our early statesmen,
before the coming of the globalists Woodrow Wilson and FDR.
Tariffs, to protect manufacturers and jobs, were the Republican Party's path to power and prosperity in the 19th and 20th centuries
, before the rise of the Rockefeller Eastern liberal establishment and its embrace of the British-bred heresy of unfettered free
trade.
The Tariff Act of 1789 was enacted with the declared purpose, "the encouragement and protection of manufactures." It was the second
act passed by the first Congress led by Speaker James Madison. It was crafted by Alexander Hamilton and signed by President Washington.
After the War of 1812, President Madison, backed by Henry Clay and John Calhoun and ex-Presidents Jefferson and Adams, enacted
the Tariff of 1816 to price British textiles out of competition, so Americans would build the new factories and capture the booming
U.S. market. It worked.
Tariffs financed Mr. Lincoln's War. The Tariff of 1890 bears the name of Ohio Congressman and future President William McKinley,
who said that a foreign manufacturer "has no right or claim to equality with our own. He pays no taxes. He performs no civil duties."
That is economic patriotism, putting America and Americans first.
The Fordney-McCumber Tariff gave Presidents Warren Harding and Calvin Coolidge the revenue to offset the slashing of Wilson's
income taxes, igniting that most dynamic of decades -- the Roaring '20s.
That the Smoot-Hawley Tariff caused the Depression of the 1930s is a New Deal myth in which America's schoolchildren have been
indoctrinated for decades.
The Depression began with the crash of the stock market in 1929, nine months before Smoot-Hawley became law. The real villain:
The Federal Reserve, which failed to replenish that third of the money supply that had been wiped out by thousands of bank failures.
Milton Friedman taught us that.
A tariff is a tax, but its purpose is not just to raise revenue but to make a nation economically independent of others, and to
bring its citizens to rely upon each other rather than foreign entities.
The principle involved in a tariff is the same as that used by U.S. colleges and universities that charge foreign students higher
tuition than their American counterparts.
What patriot would consign the economic independence of his country to the "invisible hand" of Adam Smith in a system crafted
by intellectuals whose allegiance is to an ideology, not a people?
What great nation did free traders ever build?
Free trade is the policy of fading and failing powers, past their prime. In the half-century following passage of the Corn Laws,
the British showed the folly of free trade.
They began the second half of the 19th century with an economy twice that of the USA and ended it with an economy half of ours,
and equaled by a Germany, which had, under Bismarck, adopted what was known as the American System.
Of the nations that have risen to economic preeminence in recent centuries -- the British before 1850, the United States between
1789 and 1914, post-war Japan, China in recent decades -- how many did so through free trade? None. All practiced economic nationalism.
The problem for President Trump?
Once a nation is hooked on the cheap goods that are the narcotic free trade provides, it is rarely able to break free. The
loss of its economic independence is followed by the loss of its political independence, the loss of its greatness and, ultimately,
the loss of its national identity.
Brexit was the strangled cry of a British people that had lost its independence and desperately wanted it back.
"... Looks like Robert Mueller was a dirty cop hired to confirm fairy tales of Russian collusion peddled by a Clinton wing of Dems (DemoRats) sing Trump. And he enjoyed the full support of several intelligence agencies brass (especially FBI brass; initially Stzkok was one of his investigators) ..."
"... Before that Mueller was in charge of 9/11 and Anthrax scare investigations. So he is a card caring member of the neoliberal elite which converted the USA into what can be called the "National Security State" ..."
"... In order for a person to obstruct justice, there must be some justice to obstruct. Hence, if the alleged obstructer did not commit the underlying crime being investigated, then his so-called obstruction did not impair justice; it just impaired a fruitless investigation ..."
"... the USA squabble over Parteigenosse Mueller Final Report between two factions of neoliberal elite makes the USA a joke in the eyes of the whole world ..."
"... Hopefully, a more sound part of the USA elite, which Barr represents, will put some sand into those wheels. His decision to investigate the origin of Russiagate produced almost a heart attack for Pelosi. And the fact that he decided to skip his auto-da-fé at the House adds insult to injury. Poor Pelosi almost lost her mind. ..."
"... Out of democratic challengers IMHO only Tulsi Gabbard can probably attract a sizable faction of former Trump supporters and she is the most reviled, ignored, and slandered by DNC liberals and neocons alike candidate. ..."
"... The truth is that the color revolution against Donald Trump (a soft coup if you wish) failed. Now he badly needs to win in 2020 to avoid an indictment in NY State when he leaves the Presidency. It is just a matter of survival for him. ..."
"... Neoliberal Democrats will help him by putting their weakest pro-war candidate like the aged, apparently slightly demented neocon Joe Biden. With his rabid neoliberal past, neocon foreign policy past, Ukrainian skeletons in the closet and probably participation in the Obama administration dirty and criminal attempt to derail Trump using intelligence agencies as the leverage. ..."
"... Just like is the case with Boeing the situation for neoliberal democrats does not look promising. The world is starting to crash all around them. ..."
The F.B.I. surveillance didn't come out until after the election. Therefore it couldn't impact the election. McConnell threatened
to shriek "partisan politics!" if Obama said anything publicly about the Russian issue. Obama didn't. Claims of partisan behavior?
Bullshit.
What about proven attempts of entrapments and inserting spies into Trump campaign?
Mifsud and Halper's stories come to mind (Halper's story has an interesting "seduction" subplot with undercover FBI informant
Azra Turk). FBI and Justice Department brass acted as dirty mafia style politicians. McCabe and Brennan are two shining examples here. Probably guided personally by Obama, who being grown in a family of CIA operatives
probably know this color revolutions "kitchen" all too well.
BTW Hillary did destroy evidence from her "bathroom server" while under subpoena.
Looks like Robert Mueller was a dirty cop hired to confirm fairy tales of Russian collusion peddled by a Clinton wing of
Dems (DemoRats) sing Trump. And he enjoyed the full support of several intelligence agencies brass (especially FBI brass; initially
Stzkok was one of his investigators)
Before that Mueller was in charge of 9/11 and Anthrax scare investigations. So he is a card caring member of the neoliberal
elite which converted the USA into what can be called the "National Security State"
Which looks like classic Mussolini Italy with two guiding principles of jurisprudence applied to political enemies:
(1) To my friends, everything; to my enemies, the law (originated in 1933) .
(2) Show me the man, and I'll show you the crime (that actually comes from Stalinism period of the USSR, but the spirit is the
same) .
It was actually Barr who saved Trump from obstruction of justice charge. He based his defense on the interpretation of the
statuses the following (actually very elegant) way:
In order for a person to obstruct justice, there must be some justice to obstruct. Hence, if the alleged obstructer did
not commit the underlying crime being investigated, then his so-called obstruction did not impair justice; it just impaired
a fruitless investigation
Of course, that upset DemoRats who want President Pence to speed up the destruction of the USA and adding a couple of new wars
to list the USA is involved.
Mueller was extremely sloppy and one-sided in writing his final report. Which is given taking into account his real task: to
sink Trump. As Nunes aptly observed about his treatment of Mifsud as a Russian agent :
"If he is, in fact, a Russian agent, it would be one of the biggest intelligence scandals for not only the United States,
but also our allies like the Italians and the Brits and others. Because if Mifsud is a Russian agent, he would know all kinds
of our intelligence agents throughout the globe
likbez , May 4, 2019 10:11 pm
run75441,
Yes, of course, in the current neo-McCarthyism atmosphere merely passing the salt to a Russian guest at a dinner party makes
you "an unregistered foreign agent" of Russia bent on implementing Putin's evil plans and colliding with Russian government ;-).
It looks like you are unable/unwilling to understand the logic behind my post. With all due respect, the situation is very
dangerous -- when the neoliberal elite relies on lies almost exclusively as a matter of policy (look at Kamala Harris questioning
Barr -- she is not stupid, she is an evil, almost taken from Orwell 1984, character), IMHO the neoliberal society is doomed. Sooner
or later.
Currently, the USA squabble over Parteigenosse Mueller Final Report between two factions of neoliberal elite makes the
USA a joke in the eyes of the whole world and Democrats look like Italian Fascists in 30th: a party hell-bent of dominance
which does not care about laws or legitimacy one bit and can use entrapment and other dirty methods to achieve its goals.
Hopefully, a more sound part of the USA elite, which Barr represents, will put some sand into those wheels. His decision
to investigate the origin of Russiagate produced almost a heart attack for Pelosi. And the fact that he decided to skip his auto-da-fé
at the House adds insult to injury. Poor Pelosi almost lost her mind.
Neoliberals and neoconservatives joined ranks behind Russiagate and continue to push it because otherwise they need to be held
accountable for all the related neoliberal disasters in the USA since 1980th including sliding standard of living, disappearance
of "good" jobs, sky-high cost of university education and medical insurance, and the last but not least, Hillary fiasco.
Trump ran to the left of Clinton in foreign policy and used disillusionment of working close with neoliberal Democratic Party
to his advantage promising jobs, end of outsourcing, end of uncontrolled immigration, and increased standard of living. He betrayed
all those promises, but, still, that's why he won.
And that why the neoliberal establishment must present his election as de facto illegitimate, because otherwise they would
be forced to admit that the bipartisan consensus around both financialization driven economics (casino capitalism) and imperial,
war on terror based interventionism that are the foundation of the USA neoliberal elite politics since Clinton has been a disaster
for most ordinary Americans -- of all political persuasions.
Out of democratic challengers IMHO only Tulsi Gabbard can probably attract a sizable faction of former Trump supporters
and she is the most reviled, ignored, and slandered by DNC liberals and neocons alike candidate.
The truth is that the color revolution against Donald Trump (a soft coup if you wish) failed. Now he badly needs to win
in 2020 to avoid an indictment in NY State when he leaves the Presidency. It is just a matter of survival for him.
Neoliberal Democrats will help him by putting their weakest pro-war candidate like the aged, apparently slightly demented
neocon Joe Biden. With his rabid neoliberal past, neocon foreign policy past, Ukrainian skeletons in the closet and probably participation
in the Obama administration dirty and criminal attempt to derail Trump using intelligence agencies as the leverage.
Just like is the case with Boeing the situation for neoliberal democrats does not look promising. The world is starting
to crash all around them.
I studied this phenomenon experientially for over 8 years among conservative Republican
followers, and believe it is totally Cult behavior. I've seen contrary evidence literally
"switch off" the thinking brain, erasing it, then finding the appropriate Party Line to
answer. There seems to be no way to "de-program," that I know of. It is impervious to reason,
evidence, or facts. When they were left with no other choices, I saw how Donald Trump was
transformed from an initially appalling character to them into an image of a "leader of the
Free World," in their realities. They had already been conditioned by some 30 years of
Hillary bashing, to unmercifully hate her. Their leaders used the same propaganda machine on
Obama. "Liberals" were the ultimate "enemy" and to blame for all our ills.
Barring further evidence to the contrary, I concluded that those most vulnerable to this
Cult phenomenon had a strong, authoritarian religious upbringing in childhood, and perhaps
some significant life hurt or trauma.
Many of our religious "leaders" have jumped on the gravy train, to control and exploit
them, using the same methods used by Donald Trump. Scapegoating is constant. Questioning and
critical thinking are not allowed. These folks were "primed" to believe and follow the superb
conservative Republican media propaganda machine that now boasts 24/7 coverage "coast to
coast." I read that the average American watches television 5 hours a day. The average
American over 65 watches it 7 hours a day. Adolf Hitler would have loved it. Such fertile
ground for dictators and demagogues. Now we have some, what, 13 million? programmed American
zombies on our hands. Not only that, but ALL of us have been "affected" by the
Hillary/Obama/"liberal" bashing to some extent. I don't know a single individual personally
who speaks out enthusiastically for Hillary, even those going to vote for her: they always
use apologies, excuses, caveats. By odds, that's just not normal. As John Dean wrote,
Republicans can no longer govern, but they are superb at the "politics of personal
destruction." They successfully purged their own moderates and liberals, turned the Grand Old
Party's principles upside down, and created a Trump Godzilla. They've become a gang of thugs
and thieves, the Poison Party. Some are playing "coy" right now, for the limelight they love
-- and trying to hedge their bets. But if Trump wins he'll be welcomed with open arms, and he
will fit right in, with what's now left of the GOP.
The Agenda welcomes Pulitzer Prize-winning journalist Chris Hedges, who over the past decade
and a half has made his name as a columnist, activist and author. He's been a vociferous public
critic of presidents on both sides of the American political spectrum, and his latest book,
'America, the Farewell Tour,' is nothing short of a full-throated throttling of the political,
social, and cultural state of his country.
I walked down a long service road into the remains of an abandoned lace factory. The road was pocked with holes Pilled with
fetid water. There were saplings and weeds poking up from the cracks in the asphalt. Wooden crates, rusty machinery, broken
glass, hulks of old Piling cabinets, and trash covered the grounds. The derelict complex, 288,000 square feet, consisted of two
huge brick buildings connected by overhead, enclosed walkways.
The towering walls of the two buildings, with the service road
running between them, were covered with ivy. The window panes were empty or had frames jagged with shards of glass. The
thick wooden doors to the old loading docks stood agape. I entered the
crumbling complex through a set of double wooden doors into a cavernous hall.
The wreckage of industrial America lay before me, home to
flocks of pigeons that, startled by my footsteps over the pieces of glass
and rotting floorboards, swiftly left their perches in the rafters and air
ducts high above my head. They swooped, bleating and clucking, over
the abandoned looms.
The Scranton Lace Company was America. It employed more than
1,200 workers on its imported looms, some of the largest ever built.
Throughout history, all great civilizations have ultimately decayed. And America will not be an exception, according to former
journalist and war correspondent, Chris Hedges. And while Hedges doesn't offer a date, he maintains we are in the final throes
of implosion -- and it won't be pretty.
The book is thoroughly researched and the author knows his history. And despite some of the reviews it is not so much a political
treatise as it is an exploration of the American underbelly -- drugs, suicide, sadism, hate, gambling, etc. And it's pretty dark;
although he supports the picture he paints with ample statistics and first person accounts.
There is politics, but the politics provides the context for the decay. And it's not as one-dimensional as other reviewers
seemed to perceive. Yes, he is no fan of Trump or the Republican leadership. But he is no fan of the Democratic shift to identity
politics, or antifa, either.
One reviewer thought he was undermining Christianity but I didn't get that. He does not support "prosperity gospel" theology,
but I didn't see any attempt to undermine fundamental religious doctrine. He is, after all, a graduate of Harvard Divinity School
and an ordained Presbyterian minister.
He puts the bulk of the blame for the current state of decay, in fact, where few other writers do -- squarely on the back of
capitalist America and the super-companies who now dominate nearly every industry. The social and political division we are now
witnessing, in other words, has been orchestrated by the capital class; the class of investors, banks, and hedge fund managers
who don't create value so much as they transfer it to themselves from others with less power. And I think he's spot on right.
We have seen a complete merger of corporate and political America. Politicians on both sides of the aisle serve at the pleasure
of the capitalist elite because they need their money to stay in power. Corporations enjoy all the rights of citizenship save
voting, but who needs to actually cast a ballot when you can buy the election.
And what the corpocracy, as I call it, is doing with all that power is continuing to reshuffle the deck of economic opportunity
to insure that wealth and income continue to polarize. It's a process they undertake in the name of tax cuts for the middle class
(which aren't), deregulation (which hurts society as a whole), and the outright transfer of wealth and property (including millions
of acres of taxpayer-owned land) from taxpayers to shareholders (the 1%).
I know because I was part of it. As a former CEO and member of four corporate boards I had a front row seat from the 1970s
on. The simplest analogy is that the gamblers rose up and took control of the casinos and the government had their backs in a
kind of quid pro quo, all having to do with money.
They made it stick because they turned corporate management into the ultimate capitalists. The people who used to manage companies
and employees are now laser focused on managing the companies' stock price and enhancing their own wealth. Corporate executives,
in a word, became capitalists, not businessmen and women, giving the foxes unfettered control of the hen house.
They got to that position through a combination of greed -- both corporate management's and that of shareholder activists --
but were enabled and empowered by Washington. Beginning in the 1970s the Justice Department antitrust division, the Labor Department,
the EPA, and other institutions assigned the responsibility to avoid the concentration of power that Adam Smith warned us about,
and to protect labor and the environment, were all gutted and stripped of power.
They blamed it on globalism, but that was the result, not the cause. Gone are the days of any corporate sense of responsibility
to the employees, the collective good, or the communities in which they operate and whose many services they enjoy. It is the
corporate and financial elite, and they are now one and the same, who have defined the "me" world in which we now live.
And the process continues: "The ruling corporate kleptocrats are political arsonists. They are carting cans of gasoline into
government agencies, the courts, the White House, and Congress to burn down any structure or program that promotes the common
good." And he's right. And Trump is carrying those cans.
Ironically, Trump's base, who have been most marginalized by the corpocracy, are the ones who put him there to continue the
gutting. But Hedges has an explanation for that. "In short, when you are marginalized and rejected by society, life often has
little meaning. There arises a yearning among the disempowered to become as omnipotent as the gods. The impossibility of omnipotence
leads to its dark alternative -- destroying like the gods." (Reference to Ernest Becker's The Denial of Death.)
The economic history and understanding of economic theory here is rich and detailed. Capitalism, as Marx and others pointed
out, creates great wealth in the beginning but is doomed to failure due to its inability to continue to find sources of growth
and to manage inequities in wealth creation. And you don't have to be a socialist to see that this is true. Capitalism must be
managed. And our government is currently making no attempt to do so. It is, in fact, dynamiting the institutions responsible for
doing so.
All told, this is a very good book. If you don't like reading about underbellies (I found the chapter devoted to sadism personally
unsettling, being the father of two daughters.) you will find some of it pretty dark. Having said that, however, the writing is
very good and Hedges never wallows in the darkness. He's clearly not selling the underbelly; he's trying to give it definition.
I did think that some of the chapters might have been broken down into different sub-chapters and there is a lack of continuity
in some places. All told, however, I do recommend the book. There is no denying the fundamental thesis.
The problem is, however, we're all blaming it on the proverbial 'other guy.' Perhaps this book will help us to understand the
real culprit -- the capitalist collective. "The merging of the self with the capitalist collective has robbed us of our agency,
creativity, capacity for self-reflection, and moral autonomy." True, indeed.
The inimitable Hedges is not only a saint with a penetrating intelligence, but also a man of superior eloquence with the power
to pull you into his descriptions of the collapse of western civilization. Hedges says that the new American Capitalism no longer
produces products -- rather America produces escapist fantasies. I found this paragraph [page 233] particularly relevant. The
act of being dedicated to the 'greater good' has in itself become dangerous.
Chris Hedges: "We do not become autonomous and free human beings by building pathetic, tiny monuments to ourselves. It is through
self-sacrifice and humility that we affirm the sanctity of others and the sanctity of ourselves. Those who fight against cultural
malice have discovered that life is measured by infinitesimal and often unacknowledged acts of solidarity and kindness. These
acts of kindness spin outward to connect our atomized and alienated souls to others. The good draws to it the good. This belief
-- held although we may never see empirical proof -- is profoundly transformative. But know this: when these acts are carried
out on behalf of the oppressed and the demonized, when compassion defines the core of our lives, when we understand that justice
is a manifestation of love, we are marginalized and condemned by our sociopathic elites."
If you've never read Hedges - get it now. If you've read him before - there's nothing new here.
Chris Hedges is a writer who has a knack for seeing the big picture and connecting the dots. A chronic pessimist in the best
sense, a bitter prophet warning us of the last days of the decaying empire, his page-turning prose carving through the morass
of today's mania and derangement. For that, he's in the company somewhere between Cornel West and Morris Berman (the later, whose
book Why America Failed, is better than this. If you're familiar with Hedges, but not Morris Berman, go find Berman instead).
I give this three stars only because there isn't much new here if you're familiar with his material. I felt this book to be
an update of Empire of Illusion, punched up by old articles from his weekly column at Truthdig. Aside from the introductory chapter,
he revisits themes of sadism, the decline of literacy, of labor, of democratic institutions, and so on, which are too familiar.
The pages and pages detailing the BDSM craze I felt were excessive in their prurient voyeurism which journalistic approaches can
fall into. Not saying he's wrong at all, but this tone could put off some readers, erring on excessive preacherly seminarian virtue
signaling as he points out the sins of the world and shouts - "Look! Look at what we've done!"
Heartbreaking to read but so true. In our "truth is not truth" era Mr. Hedges once again writes the sad and shocking obituary
for American Democracy and sounds the prophetic alarm to those revelers while Rome burns. All empires come and go but I never
thought I'd be a witness to one. Something sick and traitorous has infected the soul of America and I fear it's going to be some
demented combination of the worst elements in 1984 and Brave Bew World. The most important work currently published but will anyone
listen? Will anything change?
The author is honest and intelligent. When you take a detailed look at reality it can seem harsh.
Don't shoot the messenger who has brought bad news. We need to know the truth. Read, listen, learn. Engage in positive actions
to improve the situation.
Chris has given us a wake-up call.
"... Current Establishment Survey (CES) Report ..."
"... Current Population Survey (CPS ..."
"... The much hyped 3.6% unemployment (U-3) rate for April refers only to full time jobs (35 hrs. or more worked in a week). And these jobs are declining by 191,000 while part time jobs are growing by 155,000. So which report is accurate? How can full time jobs be declining by 191,000, while the U-3 unemployment rate (covering full time only) is falling? The answer: full time jobs disappearing result in an unemployment rate for full time (U-3)jobs falling. A small number of full time jobs as a share of the total labor force appears as a fall in the unemployment rate for full time workers. Looked at another way, employers may be converting full time to part time and temp work, as 191,000 full time jobs disappear and 155,000 part time jobs increase. ..."
"... The April selective numbers of 263,000 jobs and 3.6% unemployment rate is further questionable by yet another statistic by the Labor Dept.: It is contradicted by a surge of 646,000 in April in the category, 'Not in the Labor Force', reported each month. That 646,000 suggests large numbers of workers are dropping out of the labor force (a technicality that actually also lowers the U-3 unemployment rate). 'Not in the Labor Force' for March, the previous month Report, revealed an increase of an additional 350,000 added to 'Not in the Labor Force' totals. In other words, a million–or at least a large percentage of a million–workers have left the labor force. This too is not an indication of a strong labor market and contradicts the 263,000 and U-3 3.6% unemployment rate. ..."
"... Whether jobs, wages or GDP stats, the message here is that official US economic stats, especially labor market stats, should be read critically and not taken for face value, especially when hyped by the media and press. The media pumps selective indicators that make the economy appear better than it actually is. Labor Dept. methods and data used today have not caught up with the various fundamental changes in the labor markets, and are therefore increasingly suspect. It is not a question of outright falsification of stats. It's about failure to evolve data and methodologies to reflect the real changes in the economy. ..."
"... Government stats are as much an 'art' (of obfuscation) as they are a science. They produce often contradictory indication of the true state of the economy, jobs and wages. Readers need to look at the 'whole picture', not just the convenient, selective media reported data like Establishment survey job creation and U-3 unemployment rates. ..."
The recently released report on April jobs on first appearance, heavily reported by the
media, shows a record low 3.6% unemployment rate and another month of 263,000 new jobs created.
But there are two official US Labor dept. jobs reports, and the second shows a jobs market much
weaker than the selective, 'cherry picked' indicators on unemployment and jobs creation noted
above that are typically featured by the press.
Problems with the April Jobs Report
While the Current Establishment Survey (CES) Report (covering large businesses)
shows 263,000 jobs created last month, the Current Population Survey (CPS ) second
Labor Dept. report (that covers smaller businesses) shows 155,000 of these jobs were
involuntary part time. This high proportion (155,000 of 263,000) suggests the job creation
number is likely second and third jobs being created. Nor does it reflect actual new workers
being newly employed. The number is for new jobs, not newly employed workers. Moreover, it's
mostly part time and temp or low paid jobs, likely workers taking on second and third jobs.
Even more contradictory, the second CPS report shows that full time work jobs actually
declined last month by 191,000. (And the month before, March, by an even more 228,000 full time
jobs decline).
The much hyped 3.6% unemployment (U-3) rate for April refers only to full time jobs (35
hrs. or more worked in a week). And these jobs are declining by 191,000 while part time jobs
are growing by 155,000. So which report is accurate? How can full time jobs be declining by
191,000, while the U-3 unemployment rate (covering full time only) is falling? The answer: full
time jobs disappearing result in an unemployment rate for full time (U-3)jobs falling. A small
number of full time jobs as a share of the total labor force appears as a fall in the
unemployment rate for full time workers. Looked at another way, employers may be converting
full time to part time and temp work, as 191,000 full time jobs disappear and 155,000 part time
jobs increase.
And there's a further problem with the part time jobs being created: It also appears that
the 155,000 part time jobs created last month may be heavily weighted with the government
hiring part timers to start the work on the 2020 census–typically hiring of which starts
in April of the preceding year of the census. (Check out the Labor Dept. numbers preceding the
prior 2010 census, for April 2009, for the same development a decade ago).
Another partial explanation is that the 155,000 part time job gains last month (and in prior
months in 2019) reflect tens of thousands of workers a month who are being forced onto the
labor market now every month, as a result of US courts recent decisions now forcing workers who
were formerly receiving social security disability benefits (1 million more since 2010) back
into the labor market.
The April selective numbers of 263,000 jobs and 3.6% unemployment rate is further
questionable by yet another statistic by the Labor Dept.: It is contradicted by a surge of
646,000 in April in the category, 'Not in the Labor Force', reported each month. That 646,000
suggests large numbers of workers are dropping out of the labor force (a technicality that
actually also lowers the U-3 unemployment rate). 'Not in the Labor Force' for March, the
previous month Report, revealed an increase of an additional 350,000 added to 'Not in the Labor
Force' totals. In other words, a million–or at least a large percentage of a
million–workers have left the labor force. This too is not an indication of a strong
labor market and contradicts the 263,000 and U-3 3.6% unemployment rate.
Bottom line, the U-3 unemployment rate is basically a worthless indicator of the condition
of the US jobs market; and the 263,000 CES (Establishment Survey) jobs is contradicted by the
Labor Dept's second CPS survey (Population Survey).
GDP & Rising Wages Revisited
In two previous shows, the limits and contradictions (and thus a deeper explanations) of US
government GDP and wage statistics were featured: See the immediate April 26, 2019 Alternative
Visions show on preliminary US GDP numbers for the 1st quarter 2019, where it was shown how the
Trump trade war with China, soon coming to an end, is largely behind the GDP latest numbers;
and that the more fundamental forces underlying the US economy involving household consumption
and real business investment are actually slowing and stagnating. Or listen to my prior radio
show earlier this year where media claims that US wages are now rising is debunked as well.
Claims of wages rising are similarly misrepresented when a deeper analysis shows the
proclaimed wage gains are, once again, skewed to the high end of the wage structure and reflect
wages for salaried managers and high end professionals by estimating 'averages' and limiting
data analysis to full time workers once again; not covering wages for part time and temp
workers; not counting collapse of deferred and social wages (pension and social security
payments); and underestimating inflation so that real wages appear larger than otherwise.
Independent sources estimate more than half of all US workers received no wage increase
whatsoever in 2018–suggesting once again the gains are being driven by the top 10% and
assumptions of averages that distort the actual wage gains that are much more modest, if at
all.
Ditto for GDP analysis and inflation underestimation using the special price index for GDP
(the GDP deflator), and the various re-definitions of GDP categories made in recent years and
questionable on-going GDP assumptions, such as including in GDP calculation the questionable
inclusion of 50 million homeowners supposedly paying themselves a 'rent equivalent'.
A more accurate 'truth' about jobs, wages, and GDP stats is found in the 'fine print' of
definitions and understanding the weak statistical methodologies that change the raw economic
data on wages, jobs, and economic output (GDP) into acceptable numbers for media promotion.
Whether jobs, wages or GDP stats, the message here is that official US economic stats,
especially labor market stats, should be read critically and not taken for face value,
especially when hyped by the media and press. The media pumps selective indicators that make
the economy appear better than it actually is. Labor Dept. methods and data used today have not
caught up with the various fundamental changes in the labor markets, and are therefore
increasingly suspect. It is not a question of outright falsification of stats. It's about
failure to evolve data and methodologies to reflect the real changes in the economy.
Government stats are as much an 'art' (of obfuscation) as they are a science. They
produce often contradictory indication of the true state of the economy, jobs and wages.
Readers need to look at the 'whole picture', not just the convenient, selective media reported
data like Establishment survey job creation and U-3 unemployment rates.
When so doing, the bigger picture is an US economy being held up by temporary factors (trade
war) soon to dissipate; jobs creation driven by part time work as full time jobs continue
structurally to disappear; and wages that are being driven by certain industries (tech, etc.),
high end employment (managers, professionals), occasional low end minimum wage hikes in select
geographies, and broad categories of 'wages' ignored.
Jack Rasmus is author of the recently published book, 'Central Bankers at the
End of Their Ropes: Monetary Policy and the Coming Depression', Clarity Press, August 2017. He
blogs at jackrasmus.com and his twitter
handle is @drjackrasmus. His website is http://kyklosproductions.com .
How the Medal of Freedom Became a Fraud
Before we pass out any more of these devalued trophies, we need to figure out what "freedom" means.
By
Andrew J. Bacevich
•
May 7, 2019
As headlines go, the one appearing in
The New
York Times
on November 16, 2018 does not qualify as a showstopper. "Trump
Awards Medals of Freedom to Elvis, Babe Ruth and Miriam Adelson," the
Times
reported. Most readers taking note of this ceremony, which presidents have been hosting annually for over a half-century
now, probably shrugged and poured themselves another cup of coffee. Yet here, in this accolade conferred on the King,
the Bambino, and the wife of a casino mogul, we get a glimpse of how far down the road to perdition our beloved country
has traveled.
For a century and a half after declaring its independence, the United States managed
to survive -- nicely, in fact -- without any such means of conferring presidential favor. Only in the 1960s did John F.
Kennedy discover this void in American civic life and set out to fill it. His decision to do so cannot be understood
except in the context of the then-ongoing and frosty Cold War.
Kennedy's predecessor, Dwight D. Eisenhower, had made much ado about America's close
association with the divine, inserting "under God" into the Pledge of Allegiance and signing legislation making "In God
We Trust" the national motto. Here, according to Ike, was the essence of what distinguished us from our adversaries. We
believed; they did not.
Under Kennedy, God suffered a demotion of sorts, supplanted by
freedom
in the hierarchy of objects deemed
worthy of worship. In his famous inaugural address, Kennedy not only anointed freedom as the supreme value but also
declared that it was in imminent peril. Simultaneously celebrating freedom -- implicitly defined as opposing
communism -- while warning of its impending demise emerged as an abiding theme of JFK's abbreviated and largely
undistinguished presidency.
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Considered in that context, the Medal of Freedom forms part of a larger effort to
package in a single word America's mission, history's purpose, and the aspirations of all humanity, with Kennedy himself
their foremost champion. According to the directive establishing the award, its aim was to honor individuals making an
especially meritorious contribution to (1) the security or national interests of the United States, or (2) world peace,
or (3) cultural or other significant public or private endeavors.
The criteria are worth noting. The first and second qualify as straightforward and
unobjectionable, if perhaps not mutually consistent. The third criterion, by comparison, is broad and vague -- sufficiently
elastic to include just about anyone doing anything that happens to catch a president's fancy.
Almost from the outset, recipients of the Medal of Freedom have tended to fall into
one of three categories. In the first are individuals who testify to the incumbent president's preferred self-image. For
Kennedy that meant sophistication and class. So the first tranche of those selected to receive the Medal of Freedom
featured such notables as singer Marian Anderson, cellist Pablo Casals, photographer Edward Steichen, and literary
critic Edmund Wilson.
The second category is all about virtue signaling, as exemplified by Richard Nixon's
choices of labor leader David Dubinsky and composer Duke Ellington to receive the Medal of Freedom. Evidence suggesting
that Nixon was particularly fond of left-leaning labor organizers or African Americans is sparse. Yet by honoring
Dubinsky and Ellington, Nixon could strike an appearance of being broad-minded, tolerant, and even hip, at virtually no
cost to himself.
In the third category are individuals chosen to make a political statement, more often
than not catering to a particular constituency. Ronald Reagan's selection of Louis L'Amour, author of potboiler cowboy
novels, pleased his Western fan base. Similarly, his choices of Milton Friedman, Clare Boothe Luce, and Albert
Wohlstetter found favor with free marketeers, devout anti-communists, and neoconservatives, respectively.
Little of this mattered. The Medal of Freedom's substantive impact was on a par with
the presidential pardon granted to a couple of lucky turkeys just prior to Thanksgiving each year. It amounted to little
more than a photo-op. In the larger scheme of things, the Medal of Freedom did nothing to hasten the downfall of the
Evil Empire. The best we can say is that it did not retard the eventual outcome of the long twilight struggle.
With the end of the Cold War, however, and especially after 9/11, the Medal of Freedom
went from being irrelevant to somewhere between whimsical and fraudulent. Any correlation with freedom as such, never
more than tenuous in the first place, dissolved altogether. For evidence, we need look no further than the current crop
of awardees.
That the Sultan of Swat and Elvis each left an indelible mark on American life is no
doubt the case. Yet Babe Ruth died in 1948 while Presley "left the building" in 1977. Awarding them the Medal of Freedom
at this point adds nothing to their stature and smacks of presumption, more or less akin to the Congress promoting
George Washington to the rank of General of the Armies back in 1976. Besides, if Ruth, why not Lou Gehrig? Why not the
entire 1927 Yankees starting lineup? If Presley, why not Buddy Holly, Ritchie Valens, and the Big Bopper? Why not every
member of the Rock & Roll Hall of Fame?
As for Ms. Adelson, while her philanthropic activities are admirable, they fall well
short of being unique. In fact, her selection to receive this presidential bauble stems less from Adelson's charitable
giving than from her marriage to a billionaire who donated $25 million to Donald Trump's 2016 presidential campaign
while kicking in another $113 million to support the Republican Party two years later. The Adelson Medal of Freedom was
bought and paid for many times over.
I do not mean to imply that Trump deserves principal blame for trivializing and
degrading the Medal of Freedom. On that score, primary credit goes to George W. Bush, who conferred this ostensibly
great distinction on three individuals who figured prominently in engineering the debacle of the Iraq war: former CIA
director George "Slam Dunk" Tenet, General Tommy Franks, and failed American viceroy L. Paul Bremer. Passing out laurels
to mediocrities who screw up: for evidence of the sense of entitlement that has come to pervade the American
establishment, one need look no further.
President Barack Obama's contribution to the Medal of Freedom's decline in status was
of a different order: he gave out medals like pieces of Halloween candy, his 123 being the most ever awarded by any
president. As any list of honorees becomes longer, it necessarily becomes less selective. So Ellen DeGeneres got one
from Obama, as did Ernie Banks, Michael Jordan, and basketball coach Dean Smith. All estimable individuals no doubt, but
arguably not what JFK had in mind when he instituted the Medal of Freedom in the first place.
Whatever modest value JFK's initiative may once have possessed has long since
dissipated. In the present moment, with Americans disagreeing vehemently as to what freedom requires, permits, or
prohibits, it just might be time to give the Medal of Freedom a rest. Let's figure out what freedom means. Then it may
once more become appropriate to honor those who exemplify it.
Andrew J. Bacevich is
TAC
's
writer at large. His new book
Twilight of the American Century
has just been published.
The jobs reports are fabrications and that the jobs that do exist are lowly paid domestic
service jobs such as waitresses and bartenders and health care and social assistance. What has
kept the American economy going is the expansion of consumer debt, not higher pay from higher
productivity. The reported low unemployment rate is obtained by not counting discouraged workers
who have given up on finding a job.
I was listening while driving to rightwing talk radio. It is BS just like NPR. It was about
the great Trump economy compared to the terrible Obama one. The US hasn't had a great economy
since jobs offshoring began in the 1990s, and with robotics about to launch Americans are
unlikely ever again to experience a good economy.
The latest jobs report released today claims 236,000 new private sector jobs. Where are the
jobs, if they in fact exist?
Manufacturing, that is making things, produced a mere 4,000 jobs.
The jobs are in domestic services. There are 54,800 jobs in "administrative and waste
services." This category includes things such as employment services, temporary help
services, and building services such as janitor services.
"Health care and social assistance" accounts for 52,600 jobs. This category includes
things such as ambulatory health care services and individual and family services.
There are a few other jobs scattered about. Warehousing and storage had 5,400 new
jobs.
Real estate rental and leasing hired 7,800.
Legal services laid off 700 people.
Architectural and engineering services lost 1,700 jobs.
There were 6,800 new managers.
The new jobs are not high value-added, high productivity jobs that provide middle class
incomes.
In the 21st century the US economy has only served those who own stocks. The liquidity that
the Federal Reserve has pumped into the economy has driven up stock prices, and the Trump tax
cut has left corporations with more money for stock buybacks and dividend payments. The
institute on Taxation and Economic Policy reports that 60 Fortune 500 companies paid no taxes
on $79 billion in income, instead receiving a rebate of $4.3 billion. https://itep.org/notadime/
The sign of a good economy is when companies are reinvesting their profits and borrowed
money in new plant and equipment to meet rising demand. Instead, US companies are spending more
on buybacks and dividends than the total of their profits. In other words, the companies are
going into debt in order to drive up their share prices by purchasing their own shares. The
executives and shareholders are looting their own companies, leaving the companies less
capitalized and deeper in debt. https://systemicdisorder.wordpress.com/2016/10/26/work-harder-for-speculators/
Meanwhile, for the American people the Trump regime's budget for 2020 delivers $845 billion
in cuts to Medicare, $1.5 trillion in cuts to Medicaid, and $84 billion in cuts to Social
Security disability benefits.
History is repeating itself: Let them eat cake. After me the deluge.
As is usual, the headline economic number is always the
rosiest number .
Wages for production and nonsupervisory workers accelerated to a 3.4 percent annual pace,
signaling gains for lower-paid employees.
That sounds pretty good. Except for the part where it is a lie. For starters, it doesn't account for
inflation .
Labor Department numbers released Wednesday show that real average hourly earnings, which
compare the nominal rise in wages with the cost of living, rose 1.7 percent in January on a
year-over-year basis.
1.7% is a lot less than 3.4%. While the financial news was bullish, the
actual professionals took the news differently.
Wage inflation was also muted with average hourly earnings rising six cents, or 0.2% in April
after rising by the same margin in March. Average hourly earnings "were disappointing," said Ian Lyngen, head of U.S. rates strategy at
BMO Capital Markets in New York.
Secondly, 1.7% is an average, not a median.
For instance, none of this applied to you if you are an
older
worker .
Weekly earnings for workers aged 55 to 64 were only 0.8% higher in the first quarter of 2019
than they were in the first quarter of 2007, after accounting for inflation, they found.
For comparison, earnings rose 4.7% during that same period for workers between the ages of 35
and 54.
On the other hand, if you worked for a
bank your wages went up at a rate far above average. This goes double if you are in
management.
Among the biggest standouts: commercial banks, which employ an estimated 1.3 million people in
the U.S. Since Trump took office in January 2017, they have increased their average hourly wage
at an annualized pace of almost 11 percent, compared with just 3.3 percent under Obama.
Finally, there is the reason for this incredibly small wage increase fo regular workers.
Hint: it wasn't because of capitalism and all the bullsh*t jobs it creates.
The tiny wage increase that the working class has seen is because of what the capitalists said
was a
terrible idea .
For Americans living in the 21 states where the federal minimum wage is binding, inflation
means that the minimum wage has lost 16 percent of its purchasing power.
But elsewhere, many workers and employers are experiencing a minimum wage well above 2009
levels. That's because state capitols and, to an unprecedented degree, city halls have become
far more active in setting their own minimum wages. ... Averaging across all of these federal, state and local minimum wage laws, the effective minimum
wage in the United States -- the average minimum wage binding each hour of minimum wage work --
will be $11.80 an hour in 2019. Adjusted for inflation, this is probably the highest minimum
wage in American history. The effective minimum wage has not only outpaced inflation in recent years, but it has also
grown faster than typical wages. We can see this from the Kaitz index, which compares the
minimum wage with median overall wages.
So if you are waiting for capitalism to trickle down on you, it's never going to happen.
span y gjohnsit on Fri, 05/03/2019 - 6:21pm
Thousands of South Carolina teachers rallied outside their state capitol Wednesday, demanding
pay raises, more planning time, increased school funding -- and, in a twist, more legal
protections for their freedom of speech SC for Ed, the grassroots activist group that organized Wednesday's demonstration, told CNN
that many teachers fear protesting or speaking up about education issues, worrying they'll
face retaliation at work. Saani Perry, a teacher in Fort Mill, S.C., told CNN that people in
his profession are "expected to sit in the classroom and stay quiet and not speak [their]
mind."
To address these concerns, SC for Ed is lobbying for the Teachers' Freedom of Speech Act,
which was introduced earlier this year in the state House of Representatives. The bill would
specify that "a public school district may not willfully transfer, terminate or fail to renew
the contract of a teacher because the teacher has publicly or privately supported a public
policy decision of any kind." If that happens, teachers would be able to sue for three times
their salary.
Teachers across the country are raising similar concerns about retaliation. Such fears
aren't unfounded: Lawmakers in some states that saw strikes last year have introduced bills
this year that would punish educators for skipping school to protest.
The New York Times has an
illuminating article today summarizing recent research on the gender effects of
mandatory overwork in professional jobs. Lawyers, people in finance and other
client-centered occupations are increasingly required to be available round-the-clock, with
50-60 or more hours of work per week the norm. Among other costs, the impact on wage inequality
between men and women is severe. Since women are largely saddled with primary responsibility
for child care, even when couples ostensibly embrace equality on a theoretical level, the
workaholic jobs are allocated to men. This shows up in dramatic differences between typical
male and female career paths. The article doesn't discuss comparable issues in working class
employment, but availability for last-minute changes in work schedules and similar demands are
likely to impact men and women differentially as well.
What the article doesn't point out is that the situation it describes is a classic prisoners
dilemma.* Consider law firms. They compete for clients, and clients prefer attorneys who are
available on call, always prepared and willing to adjust to whatever schedule the client throws
at them. Assume that most lawyers want sane, predictable work hours if they are offered without
a severe penalty in pay. If law firms care about the well-being of their employees but also
about profits, we have all the ingredients to construct a standard PD payoff matrix:
There is a penalty to unilateral cooperation, cutting work hours back to a work-life balance
level. If your firm does it and the others don't, you lose clients to them.
There is a benefit to unilateral defection. If everyone else is cutting hours but you don't,
you scoop up the lion's share of the clients.
Mutual cooperation is preferred to mutual defection. Law firms, we are assuming, would
prefer a world in which overwork was removed from the contest for competitive advantage. They
would compete for clients as before, but none would require their staff to put in soul-crushing
hours. The alternative equilibrium, in which competition is still on the basis of the quality
of work but everyone is on call 24/7 is inferior.
If the game is played once, mutual defection dominates. If it is played repeatedly there is
a possibility for mutual cooperation to establish itself, but only under favorable conditions
(which apparently don't exist in the world of NY law firms). The logical solution is some
form of binding regulation.
The reason for bringing this up is that it strengthens the case for collective action rather
than placing all the responsibility on individuals caught in the system, including for that
matter individual law firms. Or, the responsibility is political, to demand constraints on the
entire industry. One place to start would be something like France's
right-to-disconnect law .
*I haven't read the studies by economists and sociologists cited in the article, but I
suspect many of them make the same point I'm making here.
The concept of hate speech is a form of censorship, but censorship is not 'one size fit all" phenomenon. Something
is is justified and even necessary. Sometimes it is just a demonstration of raw political power ("Might makes right") and
suppressing of the dissent.
In any case the neoliberal interpretation of "hurt feelings" as justification for censorship is open to review.
Notable quotes:
"... It’s the greatest power of an ideology that it can seep into the worldview of those who claim to oppose it. ..."
I’m reading
another article about debates over free speech on campus, this time at Williams College, an elite school in the northwestern
corner of Massachusetts. A faculty petition asks to formalize and tighten the college’s policy on free speech by adopting the
Chicago Principles, which state that “concerns about civility and mutual respect can never be used as a justification for
closing off discussion of ideas, however offensive or disagreeable those ideas may be to some members of our community.” Over
three hundred students, however, have signed a counterpetition arguing that speech which harms minorities should not be
allowed.
... ... ...
Peter Dorman
I fear my post was overly subtle. Let me be more explicit and see if that helps. My
argument was not about “free speech versus social justice warriors” or anything
of the sort. It was about a relatively new response to politics I saw first hand at Evergreen
and have read about at other institutions.
I lived through the experience of hearing activists protesting against emails and
statements at public meetings on the grounds they (the activists) were being subjected to
emotional distress. Even more remarkably, no one else openly questioned the basis on which
this argument rested. The whole tenor of discussion had shifted, and the line between public
and private had apparently been redrawn such that the private criterion of “how does
this make me feel” could be employed as a reason to suppress, or at least discourage,
political action.
It struck me that this was the characteristic shift of neoliberalism, reinterpreting the
public sphere as simply another venue for applying the hedonic calculus of individual
pleasure/pain. (Virginia-style public choice theory does something similar but in a very
different way.) I grant that much more was entailed at Evergreen, just as neoliberalism
entails far more than this one characteristic; nevertheless, the it-makes-me-feel-bad
argument for narrowing the public sphere is historically new—yes?—and coincides
with the more general neoliberal view that “the political is personal”.
Our feelings of personal well-being become political criteria of what is right and wrong
for the community, just as our political agency is reduced to personal choice. (What am I not
supposed to buy? What is the right language for me to use when talking to someone of identity
X?)
I don’t want to add more to the stew, but one further point is relevant. The
stories, all of them, that have been disseminated about what happened at Evergreen during
2017 and the runup to those events are incomplete if not simply false. This includes the
testimony of Bret Weinstein, who is factually correct about the direct experiences he
underwent but has no clue about the forces and interests that instigated them. Suffice it to
say that the faculty and perhaps students of the political left were mostly bystanders in
this imbroglio. (Anecdotal evidence: my radical students were not involved, and my students
who were involved were not the radicals.)
They may have taken sides after the event, but the
conflict was not about leftism, Marxism, radicalism or even social justice in any substantive
sense. That’s worth pointing out because it provides a further dimension to the
argument I made in my post. No significant political change was either proposed during or
eventuated from the 2017 protests, except the ongoing dismantling of some of the
college’s more experimental features in the face of a devastating budget crisis.
I am trying to understand how an ostensibly political event could be so deeply
anti-political. There are structural aspects I haven’t brought up and don’t have
time or space for: who did what and through what institutional mechanisms, etc. In this post
I am simply trying to identify some of the underlying assumptions behind the rhetoric.
This post makes an interesting encapsulation of Neoliberalism: “life is an
accumulation of moments of utility and disutility”. I am not convinced this formulation
is sufficient to characterize Neoliberalism. How well would this formulation distinguish
between Neoliberals and Epicures?
“Although Epicureanism is a form of hedonism insofar as it declares pleasure to be its
sole intrinsic goal, the concept that the absence of pain and fear constitutes the greatest
pleasure, and its advocacy of a simple life, make it very different from
“hedonism” as colloquially understood.”
[https://en.wikipedia.org/wiki/Epicureanism]
Is ‘utility’ greatly different than ‘pleasure’ as Epicures frame that
word?
I do like the last sentence of the post: “It’s the greatest power of an
ideology that it can seep into the worldview of those who claim to oppose it.”...
The topic of free speech per se free speech was excellently covered by Howard Zinn in his
talk “Second Thoughts on the First Amendment”. [I received a copy of the mp3 of
this speech as a premium from my contribution to Pacifica Radio WBAI. The lowest price mp3 or
written transcript for the speech was at https://www.alternativeradio.org/products/zinh006/
transcript for $3 or mp3 download for $5.]
Zinn’s speech made it clear that free speech was no simple matter contained within
the meaning of the words ‘free speech’. There are questions of the intent of
speech — the effects of a speech … bad feelings? … inciting a riot
— capacity for speech that spreads fear … spreading unwarranted panic the
classic yelling “Fire” in a crowded building — questions of the forum?
There is free speech on a street corner and free speech on television, and they differ
greatly in kind, and there is defamatory and slanderous speech.
...The equation between speech and money
our ‘Supremes’ made is little short of the complete debasement of the Supreme
Court as a forum of jurisprudence. The ‘prudence’ must be expunges from any
characterizations of their judgements FAVORABLE or otherwise. The Supreme Court does not
interpret the laws of the land. Like our Legislatures they are ‘bought’ and
‘bot’ to the whims of money.
Adam Eran April 26, 2019 at 7:06 pm
I’d suggest the dispute is theological. Everyone wants a “higher power” to bless their particular approach. The neoliberal
preference for comparing measurable effects, scoring them as costs or benefits, is the standard MBA religion. Why if you
can’t measure it, it mustn’t exist!
The whole approach doesn’t require too much thinking, and has the imprimatur of “science” and “reason” both… Excellent gods,
all. Graeber’s Debt: The First 5,000 Years makes a good case for the way our confusion of monetary with ethical comparisons
has managed to bamboozle humanity for literally thousands of years. You see rich people deserve their wealth. They are good,
and you can tell by the amount of money they have. See!
Code Name D, April 26, 2019 at 7:14 pm
Some speech has as its primary purpose making others suffer, through insult or instigating fear, and has little or no
persuasive intent. That’s hate speech, and I don’t see a problem with curtailing it.
The problem is just about anything “becomes” “hate speach” as a means of censorship. Calling out Isrial’s influence on US
politics becomes antisimitism. Being critical of Hillary is misogany. Hell, not liking Campain Marvel is an example of hate
speach. Recently negative reviews of the movie were removed from Rotten Tomatos as an example.
You might imagin that a line could be drawn some where. But when ever you draw that line, it always migrates over time.
Neoliberalism destroys itself, don't panic. A ridiculous economic model was rolled out globally that had no long term future. The standard debt fuelled growth model of neoliberalism. The UK:
China has seen their Minsky Moment coming and the debt fuelled growth model can no longer
be used. Adair Turner took over at the FSA when Lehman Brothers collapsed and this gave him the
incentive to find out what was going on.
Adair Turner has looked at the situation prior to the crisis where advanced economies were
growing by 4 – 5%, but the debt was rising at 10 – 15%. This always was an unsustainable growth model; it had no long term future.
After 2008, the emerging markets adopted the unsustainable growth model and they too have
now reached the end of the line. We are trying to maintain an economic model that never had a long term future as it only
worked by adding more and more debt in an unsustainable way. The debt didn't grow with
GDP. How can banks grow GDP with bank credit?
I have a problem with any argument based upon hurt feelings. Just what the heck are "hurt
feelings?" How do we tell when someone is sincere or faking said? How do we tell when someone
is emotionally fragile? How do we tell when someone has distorted values (But Hitler is my
hero!)? How do we shock college students out of their complacency? How do we challenge them
with new ideas? Are we to stop talking about the theory of evolution because someone's
religious sensibilities are offended?
Having said that it is my generation that jettisoned good manners and we are now suffering
the affects of that. The foundation of communication is knowing your audience and how much
information that can receive at a time and some forgoe any consideration of that effect to
make a controversy where there is none. And political free speech is absolutely necessary if
we are to be a country that governs ourselves.
The free exchange of ideas, and the evolution of ideas via exposure of new facts and
interpretations and disagreements is vitally important; all progress comes from this. However
fake news, bullshit arguments, and its long lasting effects cannot be underestimated. An easy
example of is the 'the measles vaccine causes autism' bullshit debacle, which both caused
numerous children and adults to now needlessly contract measles and more importantly, caused
ordinary people to doubt the integrity of the medical professionals, and even science in
general.. the discussion needs to expand from between speaker and the hurt listener, to third
parties who are listening, who may or may not have their agendas, but whose opinion can be
shifted based on the debate.
Btw, tobacco industry bullshit, climate change denial bullshit, are other huge sources of
untruth which has polluted the discussions of today
We need to have a discussion/teaching on how we can again have truthful debate, however
painful, and be able to distinguish from bald lies , false narratives or bullshit which
unfortunately clouds many debates.
We need to accept that the truth exists and that we must seek to discern it. We need a
deep discussion on what is truth and how to search for it and understand it, realizing that
although the truth exists, that one person's perception and experience of it may differ from
that of Another persons. And we need this discussion and skill set to be widely distributed,
in a sense like a mental vaccine to help combat against the Bullshit virus that pervades the
discussion today.
I too have noticed a shift in rhetoric. A recent incident at my own institution comes to
mind. A letter appeared in the student newspaper complaining about an awards ceremony for
university athletes. Apparently, a male tennis player of color had given a speech in which he
thanked the university for having provided him with the opportunity to sleep with lots of
white women. The author of the letter of complaint, a female student-athlete of color who'd
attended the ceremony, claimed that this made her feel "unsafe," and wondered why the
university president, who was in attendance, had not put a stop to the offending speech. In
the course of the discussion which followed publication of the letter, no university official
publicly questioned whether the complaining student should have felt afraid in that setting
(an awards ceremony on a university campus with hundreds of people, including the university
president, in attendance). No university official publicly questioned whether feelings of
fear, reasonable or not, are grounds for stopping a speech. Some faculty members did however
create a circular letter supporting the complaining student and at least strongly suggesting
official punitive actions against the offending student and his coaches. Debate then focused
on whether his coaches should be fired.
Note that in this case the feelings in question are not just any unpleasant feelings. The
problem with the offending speech was not that it provoked anger or sorrow. The problem was
that it made her afraid. So, I'm skeptical of the explanation for the shift in rhetoric
offered above, the one having to do with neoliberal habits of thought. Its not specific
enough.
Thanks for giving me a chance to take up a tangent I left out of the post in the interest
of curtailing sprawl. The safety version of the I-feel-bad argument is interesting.
Here is one interpretation, very provisional. Despite its increasing popularity, the
general claim that certain types of political debate or social expression should be off
limits because it makes me feel uncomfortable has an uncertain status. Institutions don't
have an explicit obligation to promote the moment-to-moment subjective well-being of
participants. (Even neoliberal approaches to governance, like cost-benefit analysis, avoid
this by basing their justification on postulates that identify current and prospective
"utility", however dicey they may be in practice.)
Into the breach jumps the safety trope. Institutions do have an obligation to protect the
safety of those they include and touch. Movements against rape and domestic violence as well
as pathological police violence have invoked this responsibility, and rightly so. And student
movements, in an apparent effort to establish a parallel, have expressed the feeling-bad
argument as feeling-unsafe.
The problem, as you point out, is the difference between feeling and being unsafe. I'm not
in a position to question whether you feel bad (I'm sure I would have felt furious if I had
been in the awards ceremony you describe and heard a predatory remark like the athlete's),
but I can question whether you really are as unsafe as you claim. (I agree with your point
about the objective safety of being in the awards audience.) The catch, however, is that
there is another cultural trope at work, the conflation of belief and knowledge. This is now
firmly ensconced in the worldview of much of the left, or "left" as I would put it. It
underlies the doctrine of positionality, transforming it from a version of ideology theory
(which I respect) to an epistemology (which is preposterous). Come to think of it, its
failure to admit the enormous sphere of intersubjectivity, the portion of reality we share
and is subject to the rules of evidence, has a sort of neoliberal (specifically Hayekian)
tinge to it.
So no, you don't get to say, "Actually, you are quite safe here." There is no shared
reality to examine that could possibly overrule someone's feeling that they are unsafe. I
have had this exact conversation with several students, but I also see versions of it in the
popular media and even in a lot of "scholarly" work. The mantra of those faculty and
administrators supporting (or in some cases collaborating with) protesters at Evergreen was
"listen to the students", as if what we hear -- and yes, of course we should listen to them
-- was thereby the factual state of the college we had to respond to. It's also a reason why
about a tenth of the student body, which excluded many or most of the radicals (see above),
had to be referred to as "the students". The "subjective perception = reality" formulation is
incoherent in the face of competing, incompatible subjective perceptions.
My reading is that the core psychological principle of neoliberalism, that life is an accumulation of moments of utility
and disutility, is alive and well within certain sectors of the "left". A speech (or email or comment at a meeting) should be
evaluated by how it makes us feel, and no one should have the right to make us feel bad.
Not sure about this "utility/disutility" dichotomy (probably you mean market fundamentalism -- belief that market ( and market
mechanisms) is a self regulating, supernaturally predictive force that will guide human beings to the neoliberal Heavens), but, yes,
neoliberalism infected the "left" and, especially, Democratic Party which was converted by Clinton into greedy and corrupt "DemoRats'
subservient to Wall Street and antagonistic to the trade unions. And into the second War Party, which in certain areas is even more
jingoistic and aggressive then Republicans (Obama color revolution in Ukraine is one example; Hillary Libya destruction is another;
both were instrumental in unleashing the civil war on Syria and importing and arming Muslim fundamentalists to fight it).
It might make sense to view neoliberalism as a new secular religion which displaced Marxism on the world arena (and collapse of
the USSR was in part the result of the collapse of Marxism as an ideology under onslaught of neoliberalism; although bribes of USSR
functionaries and mismanagement of the economy due to over centralization -- country as a single gigantic corporation -- also greatly
helped) .
Neoliberalism demonstrates the same level of intolerance (and actually series of wars somewhat similar to Crusades) as any monotheistic
religion in early stages of its development. Because at this stage any adept knows the truth and to believe in this truth is to be
saved; everything else is eternal damnation (aka living under "authoritarian regime" ;-) .
And so far there is nothing that will force the neoliberal/neocon Torquemadas to abandon their loaded with bombs jets as the tool
of enlightenment of pagan states ;-)
Simplifying, neoliberalism can be viewed an a masterfully crafted, internally consistent amalgam of myths and pseudo theories
(partially borrowed from Trotskyism) that justifies the rule of financial oligarchy and high level inequality in the society (redistribution
of the wealth up). Kind of Trotskyism for the rich with the same idea of Permanent Revolution until global victory of neoliberalism.
That's why neoliberals charlatans like Hayek and Friedman were dusted off, given Nobel Prizes and promoted to the top in economics:
they were very helpful and pretty skillful in forging neoliberal myths. Especially Hayek. A second rate economist who proved to be
the first class theologian .
Promoting "neoliberal salvation" was critical for the achieving the political victory of neoliberalism in late 1979th and discrediting
and destroying the remnants of the New Deal capitalism (already undermined at this time by the oil crisis)
Neoliberalism has led to the rise of corporate (especially financial oligarchy) power and an open war on labor. New Deal policies
aimed at full employment and job security have been replaced with ones that aim at flexibility in the form of unstable employment,
job loss and rising inequality.
This hypotheses helps to explain why neoliberalism as a social system survived after its ideology collapsed in 2008 -- it just
entered zombie stage like Bolshevism after WWII when it became clear that it can't achieve higher standard of living for the population
then capitalism.
Latest mutation of classic neoliberalism into "national neoliberalism" under Trump shows that it has great ability to adapt to
the changing conditions. And neoliberalism survived in Russia under Putin and Medvedev as well, despite economic rape that Western
neoliberals performed on Russia under Yeltsin with the help of Harvard mafia.
That's why despite widespread criticism, neoliberalism remains the dominant politico-economic theory amongst policy-makers both
in the USA and internationally. All key global neoliberal global institutions, such as the G20, European Union, IMF, World bank,
and WTO still survived intact and subscribe to neoliberalism. .
Neoliberalism has led to the rise of corporate (especially financial oligarchy) power and an open war on labor. New Deal policies
aimed at full employment and job security have been replaced with ones that aim at flexibility in the form of unstable employment,
job loss and rising inequality.
This hypotheses helps to explain why neoliberalism as a social system survived after its ideology collapsed in 2008 -- it just
entered zombie stage like Bolshevism after WWII when it became clear that it can't achieve higher standard of living for the population
then capitalism.
Latest mutation of classic neoliberalism into "national neoliberalism" under Trump shows that it has great ability to adapt to
the changing conditions.
that's why despite widespread criticism, neoliberalism remains the dominant politico-economic theory amongst policy-makers both
in the USA and internationally. All key global neoliberal global institutions, such as the G20, European Union, IMF, World bank,
and WTO still survived intact and subscribe to neoliberalism. .
For anyone of a social democratic (or lefter) persuasion, and/or see war as something that
should only be used as an absolute last resort (due to it invariably being a moral horror),
then the Democrats have indeed been the lesser of two evils, and Republican-lite.
Take Obama for instance. He ran a cleverly ambiguous campaign where he sounded to many as
being progessive and left, a breath of fresh air, something finally that would put a stop to
limitless capitalism and unwind the Bush era. But in fact he's a 'centrist', which really means
thoroughly neoliberal. He's prepared to file some of the sharp edges off capitalism, but he
neither promised nor offered a genuine alternative to a lightly regulated free market.
I mean, look at his most famous legacy: the health care reforms. This is a thoroughly
market-based solution that leaves the marketplace largely as it was. Nationalization was
nowhere in sight. And the policy was based on one his elecotoral opponent enacted when he was
governing Massachusetts! It is literally the case that voting in Democrats at the national
level gets you the policy of Republican presidential candidates.
Also, he's quite happy to unilaterally blow up stuff, including innocent people, in other
countries, in order to crush his enemies and to look good domestically. We have no problems in
calling this 'evil' when our enemies do anything like this.
Brian 04.21.19 at 2:43 pm (no link)
I think the real question is not whether Trump is successful or not. That question is a red
herring in American politics today. The real question is whether or not the Democratic
"leadership" can allow nomination of a candidate that the Democrat rank and file want. Bernie
Sanders should have won the nomination last time. But the superdelegate system gives a
literal handful of mandarins the ability to fake the primary process. (I say that as someone
who has significant issues with some of Sanders positions.)
Trump won because Hillary was a horrific candidate. Voters stayed home, disgusted. Trump
won because the Obama administration didn't deliver hope nor change. He delivered a
government of the corporate criminal bankers for them. Middle and working class America got
screwed. Black people got screwed worst. Trump won because the utter corruption at the heart
of the DNC was exposed for all to see in the emails. Trump win because of the Obama
administration making a trade deal top secret classified and trying to force a vote through
congress. Not seeing any point in voting, Democrats didnt.
All the evidence since shows the DNC leadership didn't learn anything. They are just as
contemptuous of voters, just as manipulative with their window dressing as ever. The
Democratic party is the party of endless war even more than the Republicans. It's a party
that stopped every effort by Trump to wind down or end war posture with Russia and North
Korea. There's now 2 parties in Netanyahu's pocket implementing Likuds insane middle east
ideas.
Put some solar energy and LGBTQ butter on it with a side of women's rights bullshit and
it's "Democrat". But the politicians are just as venal. The legislature just as wildly right
wing war mongering.
The 1960's is long over. The Democratic party hasn't seen a new idea since and has
converted to govern to the right of Nixon. Way to Nixon's right. The Democratic party is the
tool of the Uber-ization of not just America, but the whole world. Flour and break the law to
pauperize the working class, and suck money to a few in the SF Bay Area. That's policy
now.
You can see it already. Sanders is ahead. But Buttigieg is being anointed. He's the
perfect candidate. He's gay! He's out of the closet! And he's a corporate tool who can talk
smoothly without speaking a clear word. Best of all, he has ZERO foreign policy experience or
positions. So he'll be putty in the hands of the corporations that want endless war for
profits. Wall Street wants him. And the street owns the Democratic party. Will he give a
flying f*@k about the middle and working class? Will he be anything but another neo-liberal
who can be differentiated from a neo-conservative only by mild difference in racism? (Overt
vs.covert)
At least Buttigieg isn't Beto O'Rourke, the most completely empty skin in Congress.
There's that.
All the evidence I see is no. The Democrat "leadership" don't understand. I predict a
Trump win, or else a squeaker election that barely scrapes by with a win.
No matter what, the idiot Democrats won't get it. Pelosi will do her best to cast the
Republicans anti-tax anti-government (federal) government culture war in concrete with
balanced budget horse manure. The Democrats will continue to force a new cold war on Russia.
They will keep backing companies that steal from the middle and working class. (Yes, Uber and
Lyft are massive theft operations. They implemented taxi service without licenses. Those
licenses cost a lot of money to those who bought them. They put the public at risk causing
multiple deaths and assaults from unlicensed taxi drivers.)
Trump's appeal is that he at least talks a game of "f*@k you". Domestically it's all lies
on all sides. He lies to everyone. But at least he doesn't lie smoothly like the "good
Democrat" candidates do.
The End of Loser Liberalism: Making Markets Progressive
By Dean Baker
Most people define the central point of dispute between liberals and conservatives as
being that liberals want the government to intervene to bring about outcomes that they
consider fair, while conservatives want to leave things to the market. This is not true.
Conservatives actually rely on the government all the time, but most importantly in
structuring the market in ways that ensure that income will flow upwards. The framing that
"conservatives like the market while liberals like the government," puts liberals in the
position of seeming to want to tax the winners to help the losers.
This "loser liberalism" is bad policy and horrible politics. The efforts of liberals would
be much better spent on battles over the structure of markets so that they don't redistribute
income upward. This book describes some of the key areas in which progressives can focus
their efforts to restructure markets so that more income flows to the bulk of the working
population rather than just a small elite.
By releasing The End of Loser Liberalism: Making Markets Progressive under a Creative
Commons license and as a free download, Baker walks the walk of one of his key arguments --
that copyrights are a form of government intervention in markets that leads to enormous
inefficiency, in addition to redistributing income upward. (Hard copies are available for
purchase, at cost.) Distributing the book for free not only enables it to reach a wider
audience, but Baker hopes to drive home one of the book's main points via his own example.
While the e-book is free, donations to the Center for Economic and Policy Research are
welcomed.
[I love Dean Baker (almost all of the time at least).]
...you may have missed weeks of debate on the Right over a reasonable comment made by
the popular Fox News host.
"Market capitalism is not a religion. Market capitalism is a tool, like a staple gun or a
toaster," Carlson said. "Any economic system that weakens and destroys families isn't worth
having." Does this observation make Tucker a socialist? Hardly. As is often the case,
TAC founding editor Patrick J. Buchanan was more than a decade ahead of the curve.
"To me, the country comes before the economy; and the economy exists for the people,"
Buchanan said in a 1998 speech to the Chicago Council on Foreign Relations. "I believe in free
markets, but I do not worship them. In the proper hierarchy of things, it is the market that
must be harnessed to work for man -- and not the other way around."
The free market thinks these questions of culture, family and social cohesiveness are cute
but ultimately irrelevant. Conservatives need to come to terms that global capital has no
mercy or care for its concerns and ultimate ends. You cant tax credit your way out of that
confrontation. City of God vs the city of man is still the battle.
It would have been nice if the Conservative Movement had started this "search for answers"
after the failure of the 2012 election where the Republican Party picked a vulture capitalist
as a Presidential nominee.
Way to brave predictions, I think... I think he grossly underestimates
durability of neoliberal state like the USA. May be in 20 years the USA will really start
experiencing huge problems like he described due to the end of cheap oil". But before that only
huge exogenous shock can crash such a society.
Notable quotes:
"... It will be interesting to see how public and government workers, as a group, react to the realization that the retirements they have been promised no longer exist; perhaps that will tip the entire system into a defunct state. ..."
"... And so, Trump or no Trump, we are going to have more of the same: shiny young IT specialists skipping and whistling on the way to work past piles of human near-corpses and their excrement; Botoxed housewives shopping for fake organic produce while hungry people in the back of the store are digging around in dumpsters ..."
"... well-to-do older couples dreaming of bugging out to some tropical gringo compound in a mangrove swamp where they would be chopped up with machetes and fed to the fish; and all of them believing that things are great because the stock market is doing so well. ..."
"... But he simply does not understand the USA. He’s been predicting collapse for some time and it has not occurred or come close to happening. Washington is filled with smart kleptocrats who understand they cannot afford to destroy the country that keeps on giving them the wealth and power they crave. Trump, can flounce around Washington and the rest of the country and do and say outrageous things and it has no effect on life whatsoever. ..."
"... While, on the surface, people support ideas like higher minimum wage, universal health-care and other aspects of social democracy, it their masters say “no” then they’ll forgo it and take pride in their ability to endure suffering, early death, their children on heroin or meth, and so on. ..."
"... Since I’m fairly “connected” to the lower/working class and its struggles in my part of the world I can assure you people almost enjoy suffering to a degree that foreigners easily miss and seldom ascribe it to the thieves and criminals who run our society. ..."
"... Will there be a civil war in the US, like in the 1861-1865 period ? No, I don’t think so. Will there be severe social disturbances ? Yes, these I do expect, leading to the break up of the US. The only part of the US which probably will emerge as a cohesive force will be the old South, Dixie land, which has history and tradition behind it. The US has been kicking the financial can down the road for a long time. This cannot last for ever. ..."
"... with people like Siluanov and Nabiullina in charge of the nation’s money, I am not optimistic… ..."
"... The acceleration of economic collapse in the West will be likely bring (overt) fascism and war–world war. ..."
"... In particular, the AngloNazi sorry Anglosphere nations (Britain, Canada, Australia, New Zealand, and of course America) are a clear and present threat that should not be underestimated, discounted, or spin-doctored away. ..."
"... But the Anglos studiously avoid facing the reality that their precious way of life, capitalist system, and Anglo-American world order itself are premised upon their own ruthless exploitation of the Global South and developing nations in general. ..."
"... Trump and the MAGA hordes, as well as similar xenophobic and nationalist movements throughout the Anglosphere and Europe, are only a precursor to what is coming. They represent the grievances of the lower-middle classes within the Anglo American Empire and Europe who want a greater cut of the economic loot of empire for themselves–which necessitates an even more aggressive and militaristic grab for global resources, markets, and geopolitical power. ..."
"... He’s way too negative on the USA’s domestic prospects. Despite its absurdities, the US system is fundamentally robust and unlikely to suffer any major, sudden collapse, at least for many decades. It will certain decline further, plumbing the depths of depravity more than it has to date, but the system will chug along. The US has vacuumed up talent from all over the world, bolstering it’s economic capacity and the rents extracted by oligo. It’s day to day institutions, such as courts, post offices and the like function better now than they did in the 80s or 90s. ..."
"... All the incentives are there to keep the thing together, with little real risk of some sort of succession movement or serious insurrection. The main advantages the US has on this score are it’s mass surveillance system, policing infrastructure and media. The US media can make the great bulk of the people believe absolutely anything, if given enough time. ..."
The Saker: You recently wrote an article titled " Is the USS
Ship of Fools Taking on Water? " in which you discuss the high level of stupidity in
modern US politics? I have a simple question for you: do you think the Empire can survive Trump
and, if so, for how long?
Dmitry Orlov: I think that the American empire is very much over already, but it hasn't been
put to any sort of serious stress test yet, and so nobody realizes that this is the case. Some
event will come along which will leave the power center utterly humiliated and unable to
countenance this humiliation and make adjustments. Things will go downhill from there as
everyone in government in media does their best to pretend that the problem doesn't exist. My
hope is that the US military personnel currently scattered throughout the planet will not be
simply abandoned once the money runs out, but I wouldn't be too surprised if that is what
happens.
The Saker: Lastly, a similar but fundamentally different question: can the USA (as
opposed to the Empire) survive Trump and, if so, how? Will there be a civil war? A military
coup? Insurrection? Strikes? A US version of the Yellow Vests?
Dmitry Orlov: The USA, as some set of institutions that serves the interests of some
dwindling number of people, is likely to continue functioning for quite some time. The question
is: who is going to be included and who isn't? There is little doubt that retirees, as a
category, have nothing to look forward to from the USA: their retirements, whether public or
private, have already been spent. There is little doubt that young people, who have already
been bled dry by poor job prospects and ridiculous student loans, have nothing to look forward
to either.
But, as I've said before, the USA isn't so much a country as a country club. Membership has
its privileges, and members don't care at all what life is like for those who are in the
country but aren't members of the club. The recent initiatives to let everyone in and to let
non-citizens vote amply demonstrates that US citizenship, by itself, counts for absolutely
nothing. The only birthright of a US citizen is to live as a bum on the street, surrounded by
other bums, many of them foreigners from what Trump has termed "shithole countries."
It
will be interesting to see how public and government workers, as a group, react to the
realization that the retirements they have been promised no longer exist; perhaps that will tip
the entire system into a defunct state.
And once the fracking bubble is over and another third of the population finds that it can
no longer afford to drive, that might force through some sort of reset as well. But then the
entire system of militarized police is designed to crush any sort of rebellion, and most people
know that. Given the choice between certain death and just sitting on the sidewalk doing drugs,
most people will choose the latter.
And so, Trump or no Trump, we are going to have more of the same: shiny young IT specialists
skipping and whistling on the way to work past piles of human near-corpses and their excrement;
Botoxed housewives shopping for fake organic produce while hungry people in the back of the
store are digging around in dumpsters; concerned citizens demanding that migrants be allowed
in, then calling the cops as soon as these migrants set up tents on their front lawn or ring
their doorbell and ask to use the bathroom; well-to-do older couples dreaming of bugging out to
some tropical gringo compound in a mangrove swamp where they would be chopped up with machetes
and fed to the fish; and all of them believing that things are great because the stock market
is doing so well.
At this rate, when the end of the USA finally arrives, most of the people won't be in a
position to notice while the rest won't be capable of absorbing that sort of upsetting
information and will choose to ignore it. Everybody wants to know how the story ends, but that
sort of information probably isn't good for anyone's sanity. The mental climate in the US is
already sick enough; why should we want to make it even sicker?
I love Orlov’s wit and general cynical attitude as it mirrors mine (perhaps not the
wit). I think he seems to understand the Ukraine and Russia relatively well though I’m
not in a position to question him on that but I do know something about the politics of
NATO/EU/USA and their intentions and that Orlov gets.
But he simply does not understand the USA. He’s been predicting collapse for some
time and it has not occurred or come close to happening. Washington is filled with smart
kleptocrats who understand they cannot afford to destroy the country that keeps on giving
them the wealth and power they crave. Trump, can flounce around Washington and the rest of
the country and do and say outrageous things and it has no effect on life whatsoever.
If
anything the economy actually is “better” not as good as the cooked statistics
indicate but things have improved for people I know in that area. Americans, despite the
obvious propaganda nature of the media still are true-believers in the official Narrative
because meaning and myth always trumps reality.
While, on the surface, people support ideas
like higher minimum wage, universal health-care and other aspects of social democracy, it
their masters say “no” then they’ll forgo it and take pride in their
ability to endure suffering, early death, their children on heroin or meth, and so on.
Since
I’m fairly “connected” to the lower/working class and its struggles in my
part of the world I can assure you people almost enjoy suffering to a degree that foreigners
easily miss and seldom ascribe it to the thieves and criminals who run our society. Americans
strut around but feel powerless and don’t have a plan or think they can have a plan
because they lack the conceptual frameworks to understand that their leadership is thoroughly
rotten.
Having said that, I agree with Auslander, Americans don’t need the central
government and would do better, initially, in a highly chaotic situation and establish their
own order in their communities and rig up a new set of arrangements very quickly.
In some
ways the fall of Washington would be the best thing to ever happen in my country.
I am afraid you are wrong. Orlov does understand the US, just like I do, as I have lived
in the US. Yes, Orlov has been predicting the collapse of the US, and it will happen. I would
like to direct your attention to the following video (the second part is very
interesting):
Will there be a civil war in the US, like in the 1861-1865 period ? No, I don’t
think so. Will there be severe social disturbances ? Yes, these I do expect, leading to the
break up of the US. The only part of the US which probably will emerge as a cohesive force
will be the old South, Dixie land, which has history and tradition behind it. The US has been
kicking the financial can down the road for a long time. This cannot last for ever.
“The only part of the US which probably will emerge as a cohesive force will be the old
South, Dixie land, which has history and tradition behind it. ”
Maybe, but actually I would say most regions of the USA have some kind of “old
tradition” —and a lot nicer ones than that of the old racist South. I’ll
take New England and the Maritimes any day over the steamy South where the kudzu creeps over
I mean *everything*, the snakes proliferate, and you can’t survive the summer without
AC 24/7.
Well…I just started in on this piece and already I have a major
beef…Orlov’s notion that the dissolution of the Soviet Union was good for
Russia…
China was [and arguably still is] an empire of diverse regions, ethnicities and
religions…but how is that holding China back today, or during previous centuries of
imperial glory…?
Clearly China doesn’t fit into Orlov’s idea of an empire as a ‘wealth
pump’ that sucks from the periphery to enrich the center…this is true of course
of exploitation-based imperial projects such as western colonialism…but is clearly not
applicable to the Chinese model, which has been both the biggest and most durable empire in
human history…so that is a big hole in Orlov’s ‘theory’…
It is true that the USSR was a fundamentally different kind of empire from the
exploitative western colonialism…and it is also true that it ultimately did not
succeed…although it managed to accomplish almost incomprehensible progress in
modernization, science and technology…and industrialization…the foundations of
Russian strength today rest squarely on the foundations put in place during the Stalin
era…
Elsewhere on this site there is a brilliant series of essays by Ramin Mazaheri about the
tumultuous cultural revolution of the 1960s…and why it was necessary…Russia
also needed a cultural revolution around this time…the system needed to be rejigged to
better serve the people…in living standard…fairness and
justice…opportunity for social advance…etc…
But it never happened…instead the system became more sclerotic than ever…and
the welfare of the people stagnated…at the very moment in time when the capitalist
west, especially the United States, was able to reign in the appetites of its parasite class
and provide the people with a decent share of its [largely ill-gotten, by means of global
finance colonialism] gains…[during the postwar decades, the share of national wealth
of the 0.1 percent fell to an all time low of about 7 percent…about a quarter of
historic, and current levels]…
This was the golden age in the US…well paying jobs in industry were plentiful and
the company president made perhaps ten times what the shop floor worker took home…a
second household income was completely unnecessary…university education at state
colleges was practically free…
The life of the Soviet citizen in the1960s was not too far behind…Stalin’s
five year plans in the1930s had created an industrial powerhouse…it was Russia’s
ability to produce that allowed it to prevail over Germany in the existential war…and
despite the devastation of the people, cities and countryside Russia was able to quickly
become a technological superpower…as an aerospace engineer I have a deep appreciation
of the depth and breadth of Russian technical achievements and the basic scientific advances
that made that possible…the US was laughably left in the dust, despite having skimmed
the cream of Nazi Germany’s technical scientific talent…and contrary to what US
propaganda would have the people believe…
... ... ...
Of course the massive Chinese empire has been adapting like this for centuries, if not
millennia…Russia with the Soviet Union only needed to make similar smart
adjustments…instead they threw out the baby with the bathwater…let’s see
where Russia goes from here, but with people like Siluanov and Nabiullina in charge of the
nation’s money, I am not optimistic…
But back to Orlov…let’s see where he goes after starting off very clumsily.
.
The acceleration of economic collapse in the West will be likely bring (overt) fascism and
war–world war.
In particular, the AngloNazi sorry Anglosphere nations (Britain, Canada, Australia, New
Zealand, and of course America) are a clear and present threat that should not be
underestimated, discounted, or spin-doctored away.
As collapse intensifies, these Anglo American entities led by the USA will surely lash out
in even more aggressive wars to maintain their unipolar world order that they have ruled over
since the fall of the Soviet Union. The use of tactical nuclear weapons, bio-warfare, and
other "exotic" weapons should not be ruled out.
At base, the Anglo Americans possess an inbred sense of economic entitlement. They whine
like snowflakes about the foreign outsourcing of jobs or "illegal immigrants stealing our
jobs" as a chauvinistic demand for a greater share of the economic spoils of imperialism.
But the Anglos studiously avoid facing the reality that their precious way of life,
capitalist system, and Anglo-American world order itself are premised upon their own ruthless exploitation of the Global
South and developing nations in general.
And God forbid that the Anglos lose their parasitic way of life and (horror) are compelled
to live like the vast majority of humanity in the developing world from Africa to Asia to
Latin America to the Middle East.
The disaffected middle classes and labor aristocracy of the Anglosphere will comprise the
grassroots basis for 21st-century fascism, similar to how these socio-economic classes were
the grassroots support for the German Third Reich or Mussolini's Italy in the 1930s-40s.
Trump and the MAGA hordes, as well as similar xenophobic and nationalist movements
throughout the Anglosphere and Europe, are only a precursor to what is coming. They represent
the grievances of the lower-middle classes within the Anglo American Empire and Europe who
want a greater cut of the economic loot of empire for themselves–which necessitates an
even more aggressive and militaristic grab for global resources, markets, and geopolitical
power.
As Martin Lee has put it, the Beast reawakens.
Boswald Bollocksworth on April 17, 2019 · at 9:37 pm EST/EDT
He’s way too negative on the USA’s domestic prospects. Despite its absurdities, the US system is fundamentally robust
and unlikely to suffer any major, sudden collapse, at least for many decades. It will certain decline further, plumbing the
depths of depravity more than it has to date, but the system will chug along. The US has vacuumed up talent from all over the
world, bolstering it’s economic capacity and the rents extracted by oligo. It’s day to day institutions, such as courts, post
offices and the like function better now than they did in the 80s or 90s.
All the incentives are there to keep the thing together, with little real risk of some sort of succession movement or
serious insurrection. The main advantages the US has on this score are it’s mass surveillance system, policing infrastructure
and media. The US media can make the great bulk of the people believe absolutely anything, if given enough time.
The US capacity to meddle overseas will wither, after all how well can a submarine filled with drag queens and single
mothers operate? And who’d be willing to endure shelling for a monstrosity like contemporary America?
But the domestic system is brilliantly designed, not going anywhere.
Well after reading the entire piece, I must admit I'm not impressed
The main global dynamic right now is the Chinese industrial and economic juggernaut a
geopolitically resurgent Russia and the unraveling of the dollar dominated global financial
order
The problem with the west is not so much cultural as it is economic the west is a giant
Ponzi scheme that must ultimately collapse as all 'financialized' economies have collapsed
since the beginning of money as any careful reader of Michael Hudson can tell you
One morning we will wake up and the machine will be out of gas simple as that no money no
funny
That's why the rest of the world is moving toward a trading system that circumvents the
dollar, or any kind of so-called 'reserve' currency the US itself is shoving this process
forward by weaponizing trade and finance by means of sanctions gone wild
There does not need to be any kind of universal trading currency in the digital age it is
simply a matter of putting the settlement mechanisms in place and more important, bypassing
the HUMAN exchange networks now in place ie the old boys club through which dollar
denominated global trade now flows
Once these processes mature, there will be no way of perpetuating the western financial
Ponzi scheme it has crashed before most recently a decade ago but has been kept on life
support by negative interest rates, plus further impoverishment of the marginal class but
once the reserve currency is gone, and with it the ability to print free money the machine is
dead for good
At that point the west needs to earn its living the honest way that may be a tough
transition
This is an interesting but probably way too simplistic view. The USA as a neoliberal
superpower can't change its course. It now depends and it turn needs to support all the
neoliberal empire superstructure no matter what. Or vanish as en empire. Which is not in
Washington and MIC or Wall Street interests.
So "Empire Uber Alles" is the current policy which will remain in place. Even a slight
deviation triggers the reaction of the imperial caste (Mueller witch hunt is one example,
although I do not understand why it lasted so long, as Trump folded almost instantly and became
just Bush III with the same set of neocons driving the USA foreign policy )
The internal logic of neoliberal empire is globalization -- enforcing opening of internal
markets of other countries for the US multinationals and banks. So the conflict with the
"nationalist" (as as neocon slur them "autocratic") states, which does not want to became the USA
vassals ( like the Russia and China ) is not the anomaly, but the logical consequence of the USA
status and pretenses as imperial center. Putin tried to establish some kind of détente
several time. He failed: "Carnage needs to be destroyed" is the only possible attitude and it
naturally created strong defensive reaction which in turn strains the USA resources.
Meantime the standard of living of workers and middle class dropped. While most of the drop
is attributable to neoliberalism redistribution of wealth up, part of it is probably is
attributable to the imperial status of the USA.
The USA neoliberal elite after 1991 became completely detached from reality (aka infected
with imperil hubris) and we have what we have.
Those 700 billions that went to Pentagon speak for themselves.
And in turn create the caste of imperial servants that are strongly interested in maintaining
the status quo and quite capable to cut short any attempts to change it. The dominance of neocons
(who are essentially lobbyists of MIC) in the Department of State is a nice illustration of this
mouse trap.
So the core reason of the USA current neocon foreign policy is demands and internal dynamics
of neoliberal globalization and MIC.
In other words, as Dani Rodik said "...today's Sino-American impasse is rooted in
"hyper-globalism," under which countries must open their economies to foreign companies,
regardless of the consequences for their growth strategies or social models."
The American foreign policy Blob's latest worry is that Venezuela's radical leftist
government is
reaching out to the Middle East for support against growing pressure from Washington.
Specifically, President Nicolás Maduro is reportedly trying to establish extensive
political and financial links with Syrian President Bashar al-Assad and his ally in Lebanon,
Hezbollah . The
latter has repeatedly condemned
U.S. policy towards Maduro , and already appears to have
shadowy economic ties to Caracas. There are indications that Maduro's regime may be
utilizing Hezbollah to launder funds from the illegal drug trade.
Washington's fear is that lurking behind an Assad-Hezbollah-Maduro alliance is America's
arch-nemesis, Iran, which has close relations with both Assad and Hezbollah. Tehran's apparent
objective would be to strengthen the Venezuelan regime, boost anti-U.S. sentiment in the
Western Hemisphere, and perhaps acquire some laundered money
from a joint Maduro-Hezbollah operation to ease the pain of U.S. economic sanctions
re-imposed following the Trump administration's repudiation of the nuclear deal.
Although Iran, Assad, and Hezbollah remain primarily concerned with developments in their
own region, the fear that they want to undermine Washington's power in its own backyard is not
unfounded. But U.S. leaders should ask themselves why such diverse factions would coalesce
behind that objective.
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It is hardly the only example of this to emerge in recent years, and the principal cause
appears to be Washington's own excessively belligerent policies. That approach is driving
together regimes that have little in common except the need to resist U.S. pressure.
Washington's menacing posture undermines rather than enhances American security, and especially
in one case -- provoking an expanding entente between Russia and China -- it poses a grave
danger.
The current flirtation between Caracas and anti-American factions in the Middle East is not
the first time that American leaders have worried about collaboration among heterogeneous
adversaries. U.S. intelligence agencies and much of the foreign policy community warned for
years about cooperation between Iran
and North Korea over
both nuclear and ballistic missiletechnology
. During the Cold War, a succession of U.S. administrations expressed frustration and anger at
the de facto alliance between the totalitarian Soviet Union and democratic India. Yet the
underlying cause for that association was not hard to fathom. Both countries opposed U.S.
global primacy. India was especially uneasy about Washington's knee-jerk diplomatic and military support for
Pakistan , despite that country's history of dictatorial rule and aggression.
Alienating India was a profoundly unwise policy. So, too, has been Washington's longstanding
obsession with weakening and isolating Iran and North Korea. Those two countries have almost
nothing in common, ideologically, politically, geographically, or economically. One is a weird
East Asian regime based on dynastic Stalinism, while the other is a reactionary Middle East
Muslim theocracy. Without the incentive that unrelenting U.S. hostility provides, there is
little reason to believe that Tehran and Pyongyang would be allies. But Washington's vehemently
anti-nuclear policy towards both regimes, and the brutal economic sanctions that followed, have
helped cement a de facto alliance between two very strange bedfellows.
Iranian and North Korean leaders have apparently reached the logical conclusion that the
best way to discourage U.S. leaders from considering forcible regime change towards either of
their countries was to cooperate in strengthening their respective nuclear and missile
programs. Washington's
regime change wars , which ousted Iraq's Saddam Hussein and Libya's Moammar Gaddafi -- and
the unsuccessful attempt to overthrow Syria's Assad -- reinforced such fears.
The most worrisome and potentially deadly case in which abrasive U.S. behavior has driven
together two unlikely allies is the deepening relationship between Russia and China.
Washington's
"freedom of navigation" patrols in the South China Sea have antagonized Beijing, which has
extensive territorial claims in and around that body of water. Chinese protests have grown in
both number and intensity. Bilateral relations have also deteriorated because of Beijing's
increasingly aggressive posture toward Taiwan and
Washington's growing support for the island's de facto independence. The ongoing trade war
between the United States and China has only added to the animosity. Chinese leaders see
American policy as evidence of Washington's determination to continue
its status of primacy in East Asia, and they seek ways to undermine it.
Russia's grievances against the United States are even more pronounced. The expansion of
NATO to the borders of the Russian Federation, Washington's repeated trampling of Russian
interests in the Balkans and the Middle East, the imposition of economic sanctions in response
to the Crimea incident, the Trump administration's withdrawal from the Intermediate Nuclear
Forces treaty,
U.S. arms sales to Ukraine , and other provocations have led to a new
cold war . Russia has moved to increase diplomatic,
economic, and even military cooperation with China. Beijing and Moscow appear to be
coordinating
policies on an array of issues,
complicating Washington's options .
Close cooperation between Russia and China is all the more remarkable given the extent of
their bitterly competing interests in Central Asia and elsewhere. A mutual fear of and anger
toward the United States, however, seems to have overshadowed such potential quarrels -- at
least for now.
There even appears to be a "grand collusion" of multiple U.S. adversaries forming. Both
Russia and China are increasing their economic links with
Venezuela , and Russia's military involvement with the Maduro regime is also on the rise.
Last month, Moscow dispatched two nuclear-capable bombers to Caracas
along with approximately 100 military personnel. The latter contingent's mission was to
repair and refurbish Venezuela's air defense system in light of Washington's menacing rhetoric.
That move drew a
sharp response from President Trump.
Moscow's policy toward the Assad government, Tehran, and Hezbollah has also become more
active and supportive. Indeed, Russia's military intervention in Syria, beginning in 2015, was
a
crucial factor in tilting the war in favor of Assad's forces, which have now regained
control over most of Syria. Washington is thus witnessing Russia getting behind two of its
major adversaries: Venezuela and an Iran-led coalition in the Middle East.
This is a classic example of
balancing behavior on the part of countries worried about a stronger power that pursues
aggression. Historically, weaker competitors face a choice when confronting such a power:
bandwagon or attempt to balance against that would-be hegemon. Some very weak nations may
have little choice but to cower and accept dependent status, but most midsize powers (and even
some small ones) will choose the path of defiance. As part of that balancing strategy, they
tend to seek any allies that might prove useful, regardless of differences. When the perceived
threat is great enough, such factors are ignored or submerged. The United States and Britain
did so when they formed the Grand Alliance with the totalitarian Soviet Union in World War II
to defeat Nazi Germany. Indeed, the American revolutionaries made common cause with two
reactionary autocracies, France and Spain, to win independence from Britain.
The current U.S. policy has produced an array of unpleasant results, and cries out for
reassessment. Washington has created needless grief for itself. It entails considerable
ineptitude to foster collaboration between Iran and North Korea, to say nothing of adding
Assad's secular government and Maduro's quasi-communist regime to the mix. Even worse are the
policy blunders that have driven Russia to support such motley clients and forge ever-closer
economic and military links with a natural rival like China. It is extremely unwise for any
country, even a superpower, to multiply the number of its adversaries needlessly and drive them
together into a common front. Yet that is the blunder the United States is busily
committing.
Ted Galen Carpenter, a senior fellow in security studies at the Cato Institute and a
contributing editor at , is the author of 12 books and more than 800 articles. His latest book
is Gullible Superpower: U.S. Support for Bogus Foreign Democratic Movements (2019).
"I never thought I'd be saying this, but if the Soviet Union still existed, the United States
would not dare to do what it is doing now" – said to me by an anti-Communist Romanian
who had fled Romania when it was still Communist ruled. We were attending a demonstration
against the Clinton air war which was the final death blow to Yugoslavia.
The emergence of a powerful anti-American world coalition is a good thing; US world
hegemony has been good neither for the US nor for the world. The main danger is that the US,
seeing its power slip away, will resort to all out war, even nuclear war. I pray that the US
rulers are at least sane even if they are quite evil and over-bearing.
Current US foreign policy, set by the White House and Commander-in-Chief, reflects the beliefs
of the Deplorables who put Trump into office: sadly, most of these dupes believe the myth of
American Exceptionalism [copyright Sarah Palin]. The nexus of confusing social media and
reality TV with genuine reality, and 1950s Hollywood jingoism, has them waiting for a crisis
[possibly a gay Star Wars/Kardashian-type monster] that can only be saved before the final
commercial by their 'Hero'.
Hello,
Let's see here.
It's gotten to the point where the great United States is ruled by Trump and the strangest of
people, like freak Bolton and Pompeo and the Presidents son in law?
Are the voters nuts? The lousy choices of war mongers Hillary and Trump?
Look at the foreign leaders in the pictures.
Then look at the nasty hate filled, historically ignorant bums I named above.
The difference?
They, the leaders of those four nations threaten no one and no other nation, but clown Trump
and his advisers do every day.
Take away any power from Trump and his advisers, yeah, wishful thinking, I know, and read a
book by Noam Chomsky or an article or three by Bernie Sanders and maybe you will see what a
circus the white house is, of this nation. Ironically, America has never been LESS great. What
a damn crying shame, know what I mean?
There is a diverse coalition of weaker countries opposing the U.S. because
A. Each have been the target of regime change and figure they they better pool their resources
and help each other when they can 'the axis of resistance'.
or
B. The wolves are waiting at the wood's edge just waiting to humiliate the United States, the
last flickering light of all that is good.
Well since we are a nation of narcissists we believe B because we cannot fathom that other
countries act in their own interests.
"The current U.S. policy has produced an array of unpleasant results, and cries out for
reassessment."
"RE-assess" implies there was an original assessment. I've seen no evidence that this
revolving-door administration ever "assessed" any foreign policy principles in the first
place.
With no strategy to pursue, they mostly just react to random events around the world,
treating each as equally meaningful -- like a dog chasing its tail.
As generations replace generations, the world forgets which country has saved them again and
again. Just wait until they cry-out for someone in a Red MAGA hat to save them just one more
time –
Well, it is the correct assessment of to-day's reality. But is it something new? Back in 1994
great Samuel Huntington published well known article "Clash of Civilizations?" and predicted
literally all what happened to USA if we will choose the road of being world policeman and
"big brother". Among all – Russia and China united against America and even events in
Ukraine as complete trouble for us. Alas, he was not listened and now almost forgotten. It is
a shame!
Alliances are forged out of interest, like the 'dynastic Stalinism' of North Korea and the
'Muslim theocracy' of Iran. As Ted Galen Carpenter points out: 'The most worrisome and
potentially deadly case is the deepening relationship between Russia and China.' Interest
cuts across all apparently unifying principles: family, kin, nation, religion, ideology,
politics – everything. We unite with the enemies of our principles, because that is
what serves our interest. An alliance between Moscow and Beijing is the one most likely to
drag us into global confrontation. It is the interconnectedness of disputes that can turn a
localized flashpoint into a world war. The pattern of history shows the pursuit of interest
frequently 'undermines rather than enhances' those interests. https://www.ghostsofhistory.wordpress.com/
The Israeli military officers have an inside joke that Hasan Nasrallah is unable to lie.
Indeed, the Hezbollah leader is one of the most truthful and straightforward leader in the
world. What else could explain the US Mainstream media making absolutely sure that deplorable
American citizens never hear his speeches? They might notice that he makes a lot of sense,
fights terrorism, and protects the people of Lebanon: Christians, Shiite muslims and Sunni
muslims. I have seen Nasrallah answer a question about accusations of Hezbollah trafficking
in the drug trade. I believe his unequivocal denial far more than I do the empty accusations
that are linked and parroted by the author of this article.
"... As Trump's belligerence toward America's enemies and allies has made the dollar's reserve status "intolerable" for many, Keen believes there's a "one in three" chance that the dollar loses its reserve status within ten years. ..."
"... I don't think the Saudis are going to go through with it though, because they're incredibly intimately tied up with American military power and it would just be too dangerous for them to do that. But I know China and Russia and, to some extent, Europe are talking about it because they are sick of the extent to which this is being used as a bullying tool by America. Particularly – just one recent example – the decision not to let Iran use the SWIFT system for international payments. ..."
"... That could never have happened if the American dollar wasn't the reserve currency. And you get American imposing its political will on the rest of the world using the fact that it's the reserve currency. And of course that's become intolerable under Trump. So I think the odds are, let's say, one in three of a serious breakdown in that in the next 10 years. ..."
Though the Saudis have denied it, reports last month that the Kingdom was privately threatening to
ditch the dollar as the currency of choice for its oil trade have helped reignite speculation that
the greenback could soon lose its reserve currency status, as a few
financial luminaries
have warned.
Though many mainstream financial analysts categorically
dismiss the idea that the dollar's dominance is in any way under threat, reports about the threats
to the petrodollar have prompted many to question how exactly, does the average American benefit
from the dollar's reserve currency status, and would the greenback's fall from grace have a
negative, or positive, impact on the livelihood of the averagee American worker?
Well, economist Steve Keen has a few theories about what might happen if the dollar stops being
the vessel via which a large plurality of global trade is conducted. And he shared his views with
Erik Townsend during this week's episode of
MacroVoices
.
When most people think about the risks associated with the dollar losing its reserve status,
runaway inflation probably ranks high on the list. But Keen believes these risks are probably
overblown,for several reasons.
First, importers often hedge out foreign exchange risk
between two and five years out. And even once the dollar's weakness starts to bite, company's will
often simply absorb some of the margin pressure to maintain market share.
While prices
might move marginally higher, Keen doubts the outcome would destabilize large swaths of the US
economy, as the reserve alarmists have warned
.
The real impact would be felt by Americans wanting to travel overseas, who would see their
purchasing power collapse as the costs of traveling abroad skyrocket.
Erik:
Now, most of the products that you see at Walmart in the United States
are imported from China. It seems to me that, if this were to occur and there was a marked
devaluation of the US dollar versus other currencies, that would result in a massive inflation
shock in the real economy in the US because we don't have the manufacturing capacity to make
widgets in the United States. That's all gone offshore, to the detriment, perhaps, of the
American worker.
But we don't have that capacity. So if, all of a sudden, we have to pay much higher prices in
dollars in order to generate the same price in yuan or yen or whatever for the imported goods,
doesn't that result in a really big inflation shock inside the US?
Steve:
It can.
Inflation shocks, you have to look at them in a
proper empirical context.
And most economists simply assume any currency devaluation will lead to an equivalent
inflation spike in the country that is devaluing.
What actually happens quite frequently is firms will try to – first of all,
you have
long-term contracts determining prices that are often set out two to five years in advance,
particularly for industrial goods.
But mainly we have importers putting a markup on their imports for their profit
level.
They are willing to cut their markup to hang onto market share to some extent.
So you don't see a 100% pass-through of that sort of thing.
You might see 30%
pass-through. So if you had a 10-15-20% devaluation in the economy in the American dollar, then
you could see, yes, a 5 or 7 maybe
– I wouldn't say going beyond 10% – spike in the
inflation rate.
But, yes, you could see that spike occurring. And it would also – obviously cramp the style
of any Americans wanting to go on overseas holidays. So there would definitely be a decrease in
the American living standards.
And it would bring home to people, too, the extent to
which you have been deindustrialized and relied upon this exorbitant privilege to get over it.
If the exorbitant privilege goes, then you wear the full consequences of being deindustrialized
in the last 25 years.
Similarly, worries that a weaker dollar would cause interest rates in the US to skyrocket are
also overblown, Keen believes. Just look at Japan: Interest rates have been mired near zero for 15
years now, regardless of what's been happening with the yen. Because it's not the external market
that sets interest rates in the US - that's now the Federal Reserve's job.
Steve:
So I can see it as giving America quite a severe jolt.
But it
won't be something which causes interest rates to go sky-high. They will still be held in a band
by the Federal Reserve.
You might see rises in corporate rates and so on, but not large
rises in the rates on American government debt.
Circling back to the inspiration for this topic, Townsend asked Keen if he really believes the
Saudis seriously considering ditching the dollar, or if these leaks are merely idle threats. Keen
believes it's the latter,
given how dependent the Saudis are on American support in the
form of both supplying arms and purchasing oil.
The real risk for the dollar lies in
Europe and China. Europe's search for an alternative to SWIFT, which was inspired by Trump's
decision to ditch the Iran deal, was a major catalyst for this.
As Trump's belligerence toward America's enemies and allies has made the dollar's reserve status
"intolerable" for many, Keen believes there's a "one in three" chance that the dollar loses its
reserve status within ten years.
Erik:
Steve, let's come to the current risks that the US dollar faces in
terms of maintaining its reserve currency status and talk about how real they are. Is this talk
from Saudi Arabia just saber-rattling? Or are they really serious about ditching the dollar?
Likewise, we had another comment last week from, I believe it was a former
undersecretary of the UN, calling for a global currency to replace the US dollar as the world's
reserve currency. Are these things really at risk of actually happening?
Or is this just talk?
Steve:
I think it's at risk of happening.
I don't think the Saudis
are going to go through with it though,
because they're incredibly intimately tied up
with American military power and it would just be too dangerous for them to do that. But I know
China and Russia and, to some extent, Europe are talking about it because they are sick
of the extent to which this is being used as a bullying tool
by America. Particularly –
just one recent example – the decision not to let Iran use the SWIFT system for international
payments.
That could never have happened if the American dollar wasn't the reserve currency. And you
get American imposing its political will on the rest of the world using the fact that it's the
reserve currency. And of course that's become intolerable under Trump. So I think the odds are,
let's say, one in three of a serious breakdown in that in the next 10 years.
That's not to say that this couldn't be stopped,
but the more the US tries to impose its
will on the rest of the world, the more likely other world powers will rebel.
But it could also be prevented. It's one of these things – it doesn't have the weight of
financial numbers behind it like I could see with the credit crunch back in 2008 to say a crisis
is inevitable.
But, certainly, there will be strains on the system and the American dominance can't be
guaranteed. And the more America now tries to assert that dominance, the more likely it is to
encourage one of those alternatives to be developed.
As history has proven time and time again, no reserve currency reigns forever...
...So, With America's allies and enemies looking for ways to mitigate their reliance on the
dollar, what, ultimately, would be the impact if the world decides to ditch the greenback?
While the decline in demand would probably cause the dollar to weaken, that could benefit the
American working class. Given that President Trump's confrontation approach to diplomacy has caused
this process to accelerate, as Europe, Russia and China have repeatedly, this is one way in which
what Keen describes as Trump's leveraging America's reserve-currency status as a "thug's tool" (by
threatening sanctions against its enemies), could circuitously benefit the working class Americans
who make up a large portion of his base.
Obviously,
it's going to mean a reduction in demand for American dollars on foreign
exchange markets, which must mean a fall in the price over time.
And it will be
complicated by the usual spot and hedge markets and so on. But, yes, seeing a fall in the value
of the dollar, unless America's financial sector could no longer use the fact that it was
American to have the power it has over financial institutions elsewhere in the world, so that
the scale of the financial sector would be pulled back, your manufacturing sector would be more
competitive. But, as you know, you don't have the industrial pattern you used to have.
You've still got some outstanding corporations and outstanding technological capability. But
you don't have that machine tool background. T
he skilled workers that used to exist
there aren't there anymore.
So there would be a serious shock to America with
more expensive goods to be imported from overseas and a slow shift towards having a local
manufacturing capability,
making up for the damage of the last 25 years.
I can see a lot of social conflict out of that as well, but a positive for the American
working class, who really have been done over in the last quarter century. And that's partly the
reason why Trump has come about.
And, ironically, Trump is part of the reason why this
might come to an end, given how much he's used his bombast and the American reserve currency
status as a thug's tool in foreign relations rather than an intelligent person's tool.
In summary, although every reserve currency in history has lost its status as its economic
dominance has faded,
the US might be the first to lose that status because of an organized
rebellion that it helped provoke
via its willingness to use sanctions and other tools as a
weapon for punishing its adversaries and rewarding its friends.
"... Today's Sino-American impasse is rooted in "hyper-globalism," under which countries must open their economies to foreign companies, regardless of the consequences for their growth strategies or social models. But a global trade regime that cannot accommodate the world's largest trading economy is a regime in urgent need of repair. ..."
"... Today's impasse between the US and China is rooted in the faulty economic paradigm I have called "hyper-globalism," under which countries must open their economies to foreign companies maximally, regardless of the consequences for their growth strategies or social models. This requires that national economic models – the domestic rules governing markets –converge considerably. Without such convergence, national regulations and standards will appear to impede market access. They are treated as "non-tariff trade barriers" in the language of trade economists and lawyers. ..."
Today's Sino-American impasse is rooted in "hyper-globalism," under which countries must open their economies to
foreign companies, regardless of the consequences for their growth strategies or social models. But a global trade regime that cannot
accommodate the world's largest trading economy is a regime in urgent need of repair.
CAMBRIDGE – The world economy desperately needs a plan for "peaceful coexistence" between the United States and China. Both sides
need to accept the other's right to develop under its own terms. The US must not try to reshape the Chinese economy in its image
of a capitalist market economy, and China must recognize America's concerns regarding employment and technology leakages, and accept
the occasional limits on access to US markets implied by these concerns.
The term "peaceful coexistence" evokes the Cold War between the US and the Soviet Union. Soviet leader Nikita Khrushchev understood
that the communist doctrine of eternal conflict between socialist and capitalist systems had outlived its usefulness. The US and
other Western countries would not be ripe for communist revolutions anytime soon, and they were unlikely to dislodge the Communist
regimes in the Soviet bloc. Communist and capitalist regimes had to live side by side.
Peaceful coexistence during the Cold War may not have looked pretty; there was plenty of friction, with each side sponsoring its
own set of proxies in a battle for global influence. But it was successful in preventing direct military conflict between two superpowers
armed to the hilt with nuclear weapons. Similarly, peaceful economic coexistence between the US and China is the only way
to prevent costly trade wars between the world's two economic giants
Today's impasse between the US and China is rooted in the faulty economic paradigm I have
called "hyper-globalism," under
which countries must open their economies to foreign companies maximally, regardless of the consequences for their growth strategies
or social models. This requires that national economic models – the domestic rules governing markets –converge considerably. Without
such convergence, national regulations and standards will appear to impede market access. They are treated as "non-tariff trade barriers"
in the language of trade economists and lawyers.
Thus, the main US complaint against China is that Chinese industrial policies make it difficult for US companies to do business
there. Credit subsidies keep state companies afloat and allow them to overproduce. Intellectual property rules make it easier for
copyrights and patents to be overridden and new technologies to be copied by competitors. Technology-transfer requirements force
foreign investors into joint ventures with domestic firms. Restrictive regulations prevent US financial firms from serving Chinese
customers. President Donald Trump is apparently ready to carry out his threat of slapping additional punitive tariffs on $200 billion
of Chinese exports if China does not yield to US demands in these areas.
For its part, China has little patience for arguments that its exports have been responsible for significant whiplash in US labor
markets or that some of its firms are stealing technological secrets. It would like the US to remain open to Chinese exports and
investment. Yet China's own opening to world trade was carefully managed and sequenced, to avoid adverse impacts on employment and
technological progress.
Peaceful coexistence would require that US and China allow each other greater policy space, with international economic integration
yielding priority to domestic economic and social objectives in both countries (as well as in others). China would have a free hand
to conduct its industrial policies and financial regulations, in order to build a market economy with distinctive Chinese characteristics.
The US would be free to protect its labor markets from
social dumping and to exercise greater oversight over Chinese investments that threaten technological or national security objectives.
The objection that such an approach would open the floodgates of protectionism, bringing world trade to a halt, is based on a
misunderstanding of what drives open trade policies. As the principle of comparative advantage indicates, countries trade because
it is in their own interest. When they undertake policies that restrict trade, it is either because they reap compensating benefits
elsewhere or because of domestic political failures (for example, an inability to compensate the losers).
In the first instance, freer trade is not warranted because it would leave society worse off. In the second case, freer trade
may be warranted, but only to the extent that the political failure is addressed (and compensation is provided). International agreements
and trade partners cannot reliably discriminate between these two cases. And even if they could, it is not clear they can provide
the adequate remedy (enable compensation, to continue the example) or avoid additional political problems (capture by other special
interests such as big banks or multinational firms).
Consider China in this light. Many analysts believe that China's industrial policies have played a key role in its transformation
into an economic powerhouse. If so, it would be neither in China's interests, nor in the interest of the world economy, to curb such
practices. Alternatively, it could be that these policies are economically harmful on balance, as others have argued. Even in that
case, however, the bulk of the costs are borne by the Chinese themselves. Either way, it makes little sense to empower trade negotiators
– and the special interests lurking behind them – to resolve fundamental questions of economic policy on which there is little agreement
even among economists.
Those who worry about the slippery slope of protectionism should take heart from the experience under the General Agreement on
Tariffs and Trade prior to the establishment of the World Trade Organization. Under the GATT regime, countries had much greater freedom
to pursue their own economic strategies. Trade rules were both weaker and less encompassing. Yet world trade expanded (relative to
global output) at a more rapid clip in the three and a half decades after World War II than it has under the post-1990 hyper-globalist
regime. Similarly, one can make a convincing case that, thanks to its unorthodox growth policies, China today is a larger market
for foreign exporters and investors than if it had stuck to WTO-compliant policies.
Finally, some may say that these considerations are irrelevant, because China has acceded to the WTO and must play by its rules.
But China's entry into the WTO was predicated on the idea that it had become a Western-style market economy, or would become one
soon. This has not happened, and there is no good reason to expect that it will (or should). A mistake cannot be fixed by compounding
it.
A global trade regime that cannot accommodate the world's largest trading economy – China – is a regime in urgent need of repair.
Nationalize the banks and all financial services from fancy hedge funds to scuzzy pay-day
loaners. Force, insofar as poss, repatriation of 'abroad' capital. Put capital controls in
place. ( -- > ..unemployment !)
Pass to a flat tax (Federal) of say 13% and make sure absolutely everyone pays it,
including Corps at 15% or so? (Corp. tax in the US is absurd, hard to discuss as it always is
in some kind of fin. landscape) .. Prison if need be. (> unemployment.) Let States be more
free (other topic) Big fortunes/profits are basically confiscated to the tune of 70-90 % in
the transition phase.
Break up Big Corps, particularly GAFAMs (Google, Apple, Facebk, Amazon, Microsft) into
smaller pieces, with the 'rationale' (it might fly ...), Competition has to be encouraged,
we can't have Monopolies!
Dismantle the 'foreign' military control (bases, etc. etc.) by 50% (again might fly.)
Audit the Pentagon, cut, cut, all the graft and scams have to go. (Unemployment again)
Quality controls of an independent type (one can dream) must be instored (see b's post)
Repatriate the personnel (> unemployment)
Social etc. Set up a 2 tier health system. Tier 1 is basic, good, even excellent health
care, nationalised (with some room for State characteristics), Tier 2 can be allowed to
subsist, private clinics, private insurance (again, this might fly.) This means that 90% of
private insurance has to go, the cos. must be terminated.
Dismantle Big Agri in favor of smaller, more 'lucrative' for their owners / managers,
farms. So, all present subisdies to farms are cut, abolished, and -- ppl have to pay more for
their food! (then what.. etc.)
My suggestions are perhaps not that great (badly tailored? too piece-meal, not adjusted to
collapse?) but this is the kind of thing that needs to be discussed immediately and decided
on, even if in a jerky and confrontational fashion.
The end of capitalism, in disguise. US pol structure does not allow for such, as the US
(and other West, the US is just a stellar ex.) are ruled by rapacious coproratist (typo)
oligarchs. Won't happen.
Noirette recommends that we "Nationalize the banks and all financial services from fancy
hedge funds to scuzzy pay-day loaners."
In Hudson's long interview with Siman he says, "...only a public bank can write down the
debts -- like student debts today -- without hurting an independent oligarchic financial
class."
I have not come to the part regarding how to cut the oligarchs loose.
To student debts and pay-day loan victims, one can add debts owed by small farmers and
those underwater mortgage holders who were abandoned by Obama.
I see MoA folk beginning to dig into Michael Hudson's 4-part interview with John Siman of
Naked Capitalism , which is excellent. But, please ensure you're beginning with the
first and going in order. IMO, going to Hudson's website is the best way to accomplish that.
This is the main page. Part 1: "The
Delphic Oracle as their Davos." Part 2: "Mixed economies and monopoly." Part 3: "The DNA of
Western civilization is financially unstable." Part 4: "Up in Arms." Part 4 is at page top.
"Today's neoliberal wasteland is basically a reaction against the 19thcentury reformers,
against the logic of classical British political economy. The hatred of Marx is ultimately
the hatred of Adam Smith and John Stuart Mill, because neoliberals realize that Smith and
Mill and Ricardo were all leading to Marx. He was the culmination of their free market views
-- a market free from rentiers and monopolists.
"That was the immediate aim of socialism in the late 19thcentury. The logic of classical
political economy was leading to a socialist mixed economy. In order to fight Marxism, you
have to fight classical economics and erase memory of how civilization has dealt with (or
failed to deal with) the debt and rent-extracting problems through the ages. The history of
economic thought and the original free-market economics has to be suppressed. Today's choice
is therefore between socialism or barbarism, as Rosa Luxemburg said."
What Hudson's providing is a political-economic template for a Beyond Sanders presidential
candidate. Sanders, ICYMI, introduced the Senate's version of
Medicare For All which is a fundamental component of the type of mixed economy Hudson's
advocating.
Trump's Kakistocracy Is Also a Hackistocracy: The invasion of hucksters has reached the
Federal Reserve.
By Paul Krugman
It's no secret that Donald Trump has appointed a lot of partisan, unqualified hacks to key
policy positions. A few months ago my colleague Gail Collins asked readers to help her select
Trump's worst cabinet member. It was a hard choice, because there were so many qualified
applicants.
The winner, by the way, was Wilbur Ross, the commerce secretary. That looks like an even
better call now: Ross's department has reportedly prepared a report declaring that imports of
European cars threaten U.S. national security. This is both ludicrous and dangerous. It gives
Trump the right to start a new phase in his trade war that would inflict severe economic
damage while alienating our allies -- and, as a result, undermine national security.
Until recently, however, one agency had seemed immune to the continuing hack invasion: the
Federal Reserve, the single institution most crucial to economic policymaking. Trump's Fed
nominees, have, by and large, been sensible, respected economists. But that all changed last
week, when Trump said he planned to nominate Stephen Moore for the Fed's Board of
Governors.
Moore is manifestly, flamboyantly unqualified for the position. But there's a story here
that goes deeper than Moore, or even Trump; it's about the whole G.O.P.'s preference for
hucksters over experts, even partisan experts.
About Moore: It goes almost without saying that he has been wrong about everything. I
don't mean the occasional bad call, which all of us make. I mean a track record that includes
predicting that George W. Bush's policies would produce a magnificent boom, Barack Obama's
policies would lead to runaway inflation, tax cuts in Kansas would produce a "near immediate"
boost to the state's economy, and much more. And, of course, never an acknowledgment of error
or reflection on why he got it wrong.
Beyond that, Moore has a problem with facts. After printing a Moore op-ed in which all the
key numbers were wrong, one editor vowed never to publish the man's work again. And a
blizzard of factual errors is standard practice in his writing and speaking. It's actually
hard to find cases where Moore got a fact right.
Yet Moore isn't some random guy who caught Trump's eye. He has long been a prominent
figure in the conservative movement: a writer for the Wall Street Journal editorial page,
chief economist of the Heritage Foundation, a fixture on the right-wing lecture circuit.
Why?
You might say that the G.O.P. values partisan loyalty above professional competence. But
that's only a partial explanation, because there are plenty of conservative economists with
solid professional credentials -- and some of them are pretty naked in their partisanship,
too. Thus, a who's who of well-known conservative economists rushed to endorse the Trump
administration's outlandish claims about the benefits from its tax cut, claims they knew full
well were unreasonable.
Nor has their partisanship been restrained and polite. Many of us are still mourning the
death of Alan Krueger, the Princeton economist best known for research -- since vindicated by
many other studies -- showing that increases in the minimum wage don't usually seem to reduce
employment. Well, the Nobel-winning conservative economist James Buchanan denounced those
pursuing that line of research as "a bevy of camp-following whores."
So conservatives could, if they wanted, turn for advice to highly partisan economists with
at least some idea of what they're doing. Yet these economists, despite what often seem like
pathetic attempts to curry favor with politicians, are routinely passed over for key
positions, which go to almost surreally unqualified figures like Moore or Larry Kudlow, the
Trump administration's chief economist.
Many people have described the Trump administration as a kakistocracy -- rule by the worst
-- which it is. But it's also a hackistocracy -- rule by the ignorant and incompetent. And in
this Trump is just following standard G.O.P. practice.
Why do hacks rule on the right? It may simply be that a party of apparatchiks feels
uncomfortable with people who have any real expertise or independent reputation, no matter
how loyal they may seem. After all, you never know when they might take a stand on
principle.
In any case, there will eventually be a price to pay. True, there is, wrote Adam Smith, "a
great deal of ruin in a nation." America isn't just an immensely powerful, wealthy,
technologically advanced, peaceful country. We're also a nation with a long tradition of
dedicated public service.
Even now -- as I can attest from personal interactions -- a great majority of those
working for the Treasury Department, the State Department and so on are competent,
hard-working people trying to do the best they can for their country.
But as top jobs systematically go to hacks, there is an inevitable process of corrosion.
We're already seeing a degradation of the way our government responds to things like natural
disasters. Well, there will be more and bigger disasters ahead. And the people in charge of
dealing with those disasters will be the worst of the worst.
"... The problem was that the marketing department has been totally divorced from production and works as instructed by the financiers in Chicago whose concern is only for the next quarter's profits. ..."
The safety violations and regulatory blindness in this case appear to be so flagrant that it
is difficult to believe that any engineers would not have advised against selling the
'plane.'
The problem was that the marketing department has been totally divorced from
production and works as instructed by the financiers in Chicago whose concern is only for the
next quarter's profits.
Had the corporation been publicly owned the compulsion to put a flawed and dangerous
'plane into the air would have been greatly mitigated -- one imagines that as soon as it was
deemed operational massive bonuses were paid out to key individuals. Which is incidentally
something that ought to be revealed if there is a proper trial.
So far as democratic control-workers management- is concerned is there any doubt that the
views and opinions of those who built and tested the Max would have made it impossible for
the psychopath financiers to sell the 'product' in an unsafe condition?
Sometime neoliberal economics act as the Thought Police. Peddling neoclassic economy bullshit
create a dreadful environments of a cult and there are enforces on each corner to ensure students
indoctrination.
Economists are ideologically biased - finds a survey of their views on modern economies
conducted by Mark Horowitz, Associate Professor of Sociology at Seton Hall University, New
Jersey, entitled Political Identity and Economists' Perceptions of Capitalist Crises.
"Surveying academic economists in the United States, we find the field quite skeptical
of the prospects of capitalist crises. Despite considerable consensus, political orientation
is a highly significant predictor of respondents' outlooks."
"economists are generally skeptical of the prospects of capitalist crises. Very few see
mass structural unemployment on the horizon due to automation (Q2) or incompatibility between
capitalism and secure or meaningful employment (Q4, Q5). Only a third or so anticipates
global financial contagion (Q1), while even fewer affirm a systemic tendency toward monopoly
(Q11). Finally, at least two-thirds believe the global economy will likely be capitalist in
200 years (Q8)".
Marx on 'vulgar political economy': "It was henceforth no longer a question, whether
this theorem or that was true, but whether it was useful to capital or harmful, expedient or
inexpedient, politically dangerous or not. In place of disinterested enquirers, there were
hired prize-fighters; in place of genuine scientific research, the bad conscience and the
evil intent of apologetic"
I
frequently refer to Gillian
Tett's Fools' Gold as an account of ethical mathematical practice. Tett explains how
J.P. Morgan came out of the 2008-2009 Financial Crisis because it used mathematics critically
rather than blindly accepting the outputs of "black boxes". I felt the approach Tett described
was oddly discordant with the attitude of mathematicians. During the crisis, I co-ordinated
a response from UK mathematicians, through the Council of Mathematical Sciences, to
criticism of the use of mathematics in finance, this information was also passed onto the UK
Science Minister of the time.
The standard response from (senior) UK mathematicians was along the lines that finance
hadn't used mathematics but abused it.
The solution was to have "more" and "better" mathematicians. This was underpinned by some
adopting a logical positivist line, attributed to Hume, that the role of mathematicians is to
describe the world as it is, not as it ought to be.
At the time I felt mathematicians were not examining the role of their discipline in the
crisis; they were not behaving ethically. This was the start of my journey that transformed
me from an "uncritical" (unethical?) mathematician to someone who feels mathematics is vital,
so long as it is critical.
"... Media consolidation itself has played an enormous role in driving up the cost of political campaigns. How did we get to this second Gilded Age and what lessons can we infer regarding our democratic prospects? ..."
"... Notre Dame University 's Philip Mirowski Never Let a Serious Crisis G to Waste has provided a careful and detailed analysis of this neoliberal movement in American politics. ..."
"... Adam Smith and JS Mill saw markets as non-coercive means to allocate resources and produce goods and services. Neoliberals regarded markets as perfect information processing machines that could provide optimal solutions to all social problems ..."
"... Market is miraculous and a boon to many, but paradoxically only a strong state can assure its arrival and maintenance. Sometimes it may appear that the market is yielding iniquitous or unsustainable outcomes, which my lead to premature or disastrous rejection of its wisdom ..."
"... The neoliberal deification of markets has many parents. This mindset encouraged and was encouraged by a revolt against democracy. The wealthy had always been concerned that a propertyless working class might vote to expropriate them, but neoliberalism gave them further reason to bypass democracy. Markets were seen as better indicators of truth than democratic elections, though that point was seldom expressed as directly ..."
"... Here is FA Hayek's oblique expression of this concern: "if we proceed on the assumption that only the exercises of freedom that the majority will practice are important, we would be certain to create a stagnant society with all the characteristics of unfreedom." ..."
Why "free" why not "fair". Neoliberals are as dangerious as Big brother in 1994. Actually
neoliberal state is as close to Big Brother regine described in 1994. We have total
surveillance, with technological capabiltiies which probably exceed anything rulers of 1984
world possessed, Russiagate as "hour of anger", permanent war for permanent people (and total
victory of "democracy") , and of course "[neoliberal] freedom is [debt[ slavery..." in
neoliberal MSM.
Fast forward from one Gilded Age to another. Citizens United, granting unions and
corporations the right to spend unlimited amounts of money to advocate for and against
political candidates, is often regarded as a singularly dangerous challenge to our democratic
norms, especially with its infamous assertion that money is speech. Less attention, however,
is pad to the context in which this decision occurred, including corporate consolidation in
most sectors of the economy, obscene levels of economic inequality, and near religious
reverence for deregulated markets.
Media consolidation itself has played an enormous role in
driving up the cost of political campaigns. How did we get to this second Gilded Age and what
lessons can we infer regarding our democratic prospects?
The post World War II decades saw white working class gains in income made possible by
unionization, the GI bill, and a federal commitment to full employment. Positive as these
gains were, they carried with them unintended consequences. Workers and employers, having
less fear of depression, periodically drove wages and prices up.
Bursts of inflation and an
unprecedented profit squeeze led to unemployment even in the midst of inflation, an
unprecedented and unexpected circumstance. Blacks had been left out of the full benefits of
the New Deal welfare state and raised demands not only for political equality but also for
economic opportunity, one of Reconstruction's forgotten promises.
These events provided an opening for a group of academics who had long despised the New
Deal welfare state. Notre Dame University 's Philip Mirowski Never Let a Serious Crisis G to
Waste has provided a careful and detailed analysis of this neoliberal movement in American
politics.
These neoliberals shared with their nineteenth- century predecessors a faith in markets,
but with an important difference. Adam Smith and JS Mill saw markets as non-coercive means to
allocate resources and produce goods and services. Neoliberals regarded markets as perfect
information processing machines that could provide optimal solutions to all social problems.
Hence a commitment not only to lift rent control on housing but also to privatize prisons,
water and sewer systems, and to deregulate all aspects of personal finance and treat
education and health care as commodities to be pursued on unregulated markets. An essential
part of this faith in markets is the post Reagan view of corporate consolidation.
Combinations are to be judged only on the basis of cheap products to the consumer.
Older
antitrust concerns about worker welfare or threat to democracy itself are put aside.
Corporate mergers and the emergence of monopoly are seen as reflections of the omniscient
market. In practice, however as we shall see, such a tolerant attitude is not applied to
worker associations.
Neoliberals differ from their classical predecessors in a second important way. Market is
miraculous and a boon to many, but paradoxically only a strong state can assure its arrival
and maintenance. Sometimes it may appear that the market is yielding iniquitous or
unsustainable outcomes, which my lead to premature or disastrous rejection of its wisdom. The
answer to this anger is more markets, but that requires a strong state staffed by
neoliberals. They would have the capacity and authority to enact and impose these markets and
distract the electorate and divert them into more harmless pursuits. Recognition of the need
for a powerful state stands in partial contradiction to the neoliberal's professed
deification of pure markets and was seldom presented to public gatherings. As Mirowski put
it, neoliberals operated on the basis of a dual truth, an esoteric truth for its top scholars
and theorists and an exoteric version for then public. Celebration of the spontaneous market
was good enough for Fox News, whereas top neoliberal scholars discussed how to reengineer
government in order to recast society.
The signs of neoliberalism are all around us. Worried about student debt? There is a
widely advertised financial institution that will refinance your loan. Trapped in prison with
no money for bail. There are corporations and products that will take care of that. Cancer
cures, money for funerals and burial expenses can all be obtained via the market. Any problem
the market creates the market can solve. The implications of this view have been ominous for
democracy and social justice.
The neoliberal deification of markets has many parents. This mindset encouraged and was
encouraged by a revolt against democracy. The wealthy had always been concerned that a
propertyless working class might vote to expropriate them, but neoliberalism gave them
further reason to bypass democracy. Markets were seen as better indicators of truth than
democratic elections, though that point was seldom expressed as directly.
Here is FA Hayek's
oblique expression of this concern: "if we proceed on the assumption that only the exercises
of freedom that the majority will practice are important, we would be certain to create a
stagnant society with all the characteristics of unfreedom."
The revolt against democracy has occurred on several different levels of the political
process. The question of who can vote is just as contested as during Reconstruction, and not
just in the South. As during Reconstruction, it does not take the form of explicit racial
appeals. The strategy includes further limiting the time polls are open, reduction in the
number of polling places, voter identification cards that take time and money to obtain. Who
can vote is also a function of the racist legacy of our history, with prohibitions on voting
by felons serving to exclude large numbers of potential voters, disproportionately
minorities. It should be mentioned more than it is that these techniques also work to the
disadvantage of poor whites. Political scientists Walter Dean Burnham and Thomas Ferguson
point out: "In Georgia in 1942, for example, turnout topped out at 3.4 percent (that's right,
3.4 percent; no misprint). Why is no mystery: the Jim Crow system pushed virtually all
African-Americans out of the system, while the network of poll taxes, registration
requirements, literacy tests and other obstacles that was part of that locked out most poor
whites from voting, too. Since the civil rights revolution, turnouts in the South have risen
fitfully to national levels, amid much pushback, such as the raft of new voter ID
requirements (though these are not limited to the South)."
Minorities, poor, and even substantial segments of the working class are further
disadvantaged by efforts to defund the labor opposition. Unions have been the one big money
source that Democrats had available, but as the party from Bill Clinton on increasingly
became a kind of neoliberalism light, embracing corporate trade agreements with a little bit
of job training assistance thrown in, unions lost members, many corporations forced
decertification elections. Democrats lost not only financial resources but also the ground
troops that had mobilized their voters.
One result of and partial driving force behind these changes is that both parties become
big money parties. Burnham and Ferguson-( December 2014)- The President and the Democratic
Party are almost as dependent on big money – defined, for example, in terms of the
percentage of contributions (over $500 or $1000) from the 1 percent as the Republicans. To
expect top down money-driven political parties to make strong economic appeals to voters is
idle. Instead the Golden Rule dominates: Money-driven parties emphasize appeals to particular
interest groups instead of the broad interests of working Americans that would lead their
donors to shut their wallets.
As David Stockman, President Reagan's Budget Director once all but confessed,
"in the
modern era the party has never really pretended to have much of a mass constituency. It wins
elections by rolling up huge percentages of votes in the most affluent classes while seeking
to divide middle and working class voters with various special appeals and striving to hold
down voting by minorities and the poor."
Challenging this bipartisan money driven establishment becomes even more difficult as
state level ballot access laws are notoriously hostile to third parties. Add to this the
private, deceptively named Presidential Debate Commission, which specializes in depriving
even candidates about whom large segment s of the population are curious access to the widely
watched debates. Unfortunately the celebrated voting reform proposal, HR1, though containing
some democratic initiatives such as early voting and automatic voter registration, makes it
own contribution to economic and political consolidation.
Bruce Dixon, editor of Black Agenda
Report, maintains that only two provisions of this bill are likely to become law and both are
destructive: "by raising the qualifying amount from its current level of $5,000 in each of 20
states to $25,000 in 20 states. HR 1 would cut funding for a Green presidential candidate in
half, and by making ballot access for a Green presidential candidate impossible in several
states it would also guarantee loss of the party's ability to run for local offices." Dixon
also predicts that some Democrats "will cheerfully cross the aisle to institutionalize the
Pentagon, spies and cops to produce an annual report on the threat to electoral security.
Dixon maintains:
"Democrats are a capitalist party, they are a government party, and this
is how they govern. HR 1 reaches back a hundred years into the Democrat playbook politicians
created a foreign menace to herd the population into World War 1, which ended in the Red
Scare and a couple of red summers, waves of official and unofficial violence and deportations
against US leftists and against black people. The Red Scare led to the founding of the FBI,
the core of the nation's permanent political police . Fifty years ago these were the same
civil servants who gave us the assassinations, the disinformation and illegality of
COINTELPRO, and much, much more before that and since then. HR 1 says let's go to the
Pentagon and the cops, let's order them to discover threats to the electoral system posed by
Americans working to save themselves and the planet."
Dixon is surely right that both parties are capitalist parties, but capitalism itself has
taken different forms. New Deal and neoliberal capitalism had far different implications for
working class Americans. The New Deal itself was heavily influenced by Norman Thomas and the
socialist tradition. In this regard, if what Paul Wellstone used to call the democratic wing
of the Democratic Party wishes to see its ideals translated into practice, it must resist
efforts to exclude third parties or to deny primary opponents an even playing field.
I am not claiming that there has been a carefully coordinated conspiracy among the
individuals and groups that supported these policies, but leaders did act out of a general
animus toward popular movements that further reinforced their reverence for corporate
markets, and the faith in markets drove the worries about popular movements.
One positive conclusion to be drawn is that if this attack on democracy exists on several
levels, activism might be fruitful in many domains and may have a spillover effect. Unions
are still not dead, and there is a fight now for the soul of the Democratic Party and that
fight might stimulate voter access and eligibility reforms. These in turn could reshape the
party's orientation and ideology. Even at the Federal level Dark money is worrisome to many
voters and could be an incentive to mobilize for better disclosure laws. There are ample
fronts on which to fight and good reason to keep up the struggle.
"... I believe that the current GLOBAL elites do understand exactly what they are doing and the potential consequences to the ongoing existence of private finance. ..."
"... The war that is being waged is an attempt to keep private finance in charge of our world ..."
"But current American elites have no concept of own actions having consequences."
I believe that the current GLOBAL elites do understand exactly what they are doing and the
potential consequences to the ongoing existence of private finance.
The war that is being waged is an attempt to keep private finance in charge of our world
and they are losing I am pleased to report
@Anon
You are no Christians. USAism and all radical Protestantism is abusing the surface of
Christianity for satanic anti-Christianity.
There is no Christianity but what is rooted in the old and everlasting Church of which
Christ is the Head in the Holy Spirit, as laid in apostle's hands and transferred by Church
fathers.
Christianity is genuinely collectivist, it has nothing to do with the perverted
individualism of Anglosaxon background and does not agree with the inherent nihilistic energy
of capitalism.
The future of fiscal
policy was intensely debated in the FT last week. In this Exchange, I want to examine what
is going on in the US and, in
particular, what is going on inside the Republican party. This matters for the US and, because
the US remains the world's most important economy, it also matters greatly for the world.
My reading of contemporary Republican thinking is that there is no chance of any attempt to
arrest adverse long-term fiscal trends should they return to power. Moreover, since the
Republicans have no interest in doing anything sensible, the Democrats will gain nothing from
trying to do much either. That is the lesson Democrats have to draw from the Clinton era's
successful frugality, which merely gave George W. Bush the opportunity to make massive
(irresponsible and unsustainable) tax cuts. In practice, then, nothing will be done.
Indeed, nothing may be done even if a genuine fiscal crisis were to emerge. According to my
friend,
Bruce Bartlett , a highly informed, if jaundiced, observer, some "conservatives" (in truth,
extreme radicals) think a federal default would be an effective way to bring public spending
they detest under control. It should be noted, in passing, that a federal default would surely
create the biggest financial crisis in world economic history.
To understand modern Republican thinking on fiscal policy, we need to go back to perhaps the
most politically brilliant (albeit economically unconvincing) idea in the history of fiscal
policy: "supply-side economics". Supply-side economics liberated conservatives from any need to
insist on fiscal rectitude and balanced budgets. Supply-side economics said that one could cut
taxes and balance budgets, because incentive effects would generate new activity and so higher
revenue.
The political genius of this idea is evident. Supply-side economics transformed Republicans
from a minority party into a majority party. It allowed them to promise lower taxes, lower
deficits and, in effect, unchanged spending. Why should people not like this combination? Who
does not like a free lunch?
How did supply-side economics bring these benefits? First, it allowed conservatives to
ignore deficits. They could argue that, whatever the impact of the tax cuts in the short run,
they would bring the budget back into balance, in the longer run. Second, the theory gave an
economic justification – the argument from incentives - for lowering taxes on politically
important supporters. Finally, if deficits did not, in fact, disappear, conservatives could
fall back on the "starve the beast" theory: deficits would create a fiscal crisis that would
force the government to cut spending and even destroy the hated welfare state.
In this way, the Republicans were transformed from a balanced-budget party to a tax-cutting
party. This innovative stance proved highly politically effective, consistently putting the
Democrats at a political disadvantage. It also made the Republicans de facto Keynesians in a de
facto Keynesian nation. Whatever the rhetoric, I have long considered the US the advanced
world's most Keynesian nation – the one in which government (including the Federal
Reserve) is most expected to generate healthy demand at all times, largely because jobs are, in
the US, the only safety net for those of working age.
True, the theory that cuts would pay for themselves has proved altogether wrong. That this
might well be the case was evident: cutting tax rates from, say, 30 per cent to zero would
unambiguously reduce revenue to zero. This is not to argue there were no incentive effects. But
they were not large enough to offset the fiscal impact of the cuts (see, on this, Wikipedia and a nice
chart from Paul Krugman).
Indeed, Greg Mankiw, no less, chairman of the Council of Economic Advisers under George W.
Bush, has responded to the view that broad-based tax cuts would pay for themselves, as follows:
"I did not find such a claim credible, based on the available evidence. I never have, and I
still don't." Indeed, he has referred to those who believe this as " charlatans and
cranks ". Those are his words, not mine, though I agree. They apply, in force, to
contemporary Republicans, alas,
Since the fiscal theory of supply-side economics did not work, the tax-cutting eras of
Ronald Reagan and George H. Bush and again of George W. Bush saw very substantial rises in
ratios of federal debt to gross domestic product. Under Reagan and the first Bush, the ratio of
public debt to GDP went from 33 per cent to 64 per cent. It fell to 57 per cent under Bill
Clinton. It then rose to 69 per cent under
the second George Bush . Equally, tax cuts in the era of George W. Bush, wars and the
economic crisis account for almost all the dire fiscal outlook for the next ten years (
see the Center
on Budget and Policy Priorities ).
Today's extremely high deficits are also an inheritance from Bush-era tax-and-spending
policies and the financial crisis, also, of course, inherited by the present administration.
Thus, according to the International
Monetary Fund, the impact of discretionary stimulus on the US fiscal deficit amounts to a
cumulative total of 4.7 per cent of GDP in 2009 and 2010, while the cumulative deficit over these years is
forecast at 23.5 per cent of GDP . In any case, the stimulus was certainly too small, not
too large.
The evidence shows, then, that contemporary conservatives (unlike those of old) simply do
not think deficits matter, as former vice-president Richard Cheney is reported to have told
former treasury secretary Paul O'Neill . But this is not because the supply-side theory of
self-financing tax cuts, on which Reagan era tax cuts were justified, has worked, but despite
the fact it has not. The faith has outlived its economic (though not its political)
rationale.
So, when Republicans assail the deficits under President Obama , are they to be taken
seriously? Yes and no. Yes, they are politically interested in blaming Mr Obama for deficits,
since all is viewed fair in love and partisan politics. And yes, they are, indeed, rhetorically
opposed to deficits created by extra spending (although that did not prevent them from enacting
the unfunded prescription drug benefit, under President Bush). But no, it is not deficits
themselves that worry Republicans, but rather how they are caused: deficits caused by tax cuts
are fine; but spending increases brought in by Democrats are diabolical, unless on the
military.
"[Y]ou should never raise taxes in order to cut taxes. Surely Congress has the authority,
and it would be right to -- if we decide we want to cut taxes to spur the economy, not to
have to raise taxes in order to offset those costs. You do need to offset the cost of
increased spending, and that's what Republicans object to. But you should never have to
offset the cost of a deliberate decision to reduce tax rates on Americans"
What conclusions should outsiders draw about the likely future of US fiscal policy?
First, if Republicans win the mid-terms in November, as seems likely, they are surely going
to come up with huge tax cut proposals (probably well beyond extending the already unaffordable
Bush-era tax cuts).
Second, the White House will probably veto these cuts, making itself even more politically
unpopular.
Third, some additional fiscal stimulus is, in fact, what the US needs, in the short term,
even though across-the-board tax cuts are an extremely inefficient way of providing it.
Fourth, the Republican proposals would not, alas, be short term, but dangerously long term,
in their impact.
Finally, with one party indifferent to deficits, provided they are brought about by tax
cuts, and the other party relatively fiscally responsible (well, everything is relative, after
all), but opposed to spending cuts on core programmes, US fiscal policy is paralysed. I may
think the policies of the UK government dangerously austere, but at
least it can act.
This is extraordinarily dangerous. The danger does not arise from the fiscal deficits of
today, but the attitudes to fiscal policy, over the long run, of one of the two main parties.
Those radical conservatives (a small minority, I hope) who want to destroy the credit of the US
federal government may succeed. If so, that would be the end of the US era of global dominance.
The destruction of fiscal credibility could be the outcome of the policies of the party that
considers itself the most patriotic.
In sum, a great deal of trouble lies ahead, for the US and the world.
Bruce Bartlett writes "I think my friend
Martin is a bit too hard on Reagan, who did try to cut spending and signed 11 major tax
increases into law to bring down the deficit. And Bush 41 initiated a budget deal in 1990
that eventually led to budget surpluses. It was Bush 43 and his willing accomplices among
the Republicans who controlled Congress that deserve the vast bulk of the blame."
This is my response: "Fair comment. But, as you have often noted, his followers have
repudiated president Reagan's willingness to raise taxes. Nor are they making any credible
commitments to large-scale cuts in public spending. It is also the case that, despite a
boom in the 1980s, the end of the Reagan and George H. Bush era saw much higher public debt
ratios than the beginning. I think you have to recognise that today's Republicans are
Reagan's children and, as is often the case, are more uncompromising than their
parents."
Mr. Wolf - Your comment is entirely
correct though perhaps incomplete. Implicit, and sometimes explicit, in the supply-side
argument was that low taxes wouldn't involve any public sacrifices. The Republicans
promised the benefits of the liberal state while arguing that the needed tax revenues
wouldn't be needed. This is what made it and continues to make it a successful political
strategy. This is an actual Big Lie.
Its worth delineating the other Big Lie of Republican political strategy, the the USA is
so powerful that it can do anything it wants on the international stage. Add in consistent
appeals to racial and religious bigotry (from which the personally decent Mr. Reagan was
not immune) and you have almost the whole Republican political strategy of the last 30
years. Very successful and almost all of it based on deception and appeals to the
electorate's worst tendencies.
Running up the debt in order to default
and cut spending is like having a heart attack in order to get serious about diet and
exercise. It is crazy, but they will do it, and then blame it on someone else.
I think you're assuming a lot about the
results of the November elections that are far from certain. In fact, it's highly, highly
unlikely that the Republicans will win the Senate, and not particularly likely they'll win
the House. They will certainly pick up seats in the House, maybe a lot, but there are only
a handful of Dem-held Senate seats that I would say today are pretty much lost for the
Democrats (North Dakota, Arkansas), while there are also up to 8 Republican-held seats that
could be in play. Democrats would have to lose 10 seats that they currently hold and not
win any seats currently held by Republicans (even though 5 of those are open and Vitter in
Louisiana is so scandal-plagued he may not survive). It's just about implausible the
Democrats will lose a net of 10 or more seats.
Even in the House, Democrats will have to lose almost all the contested seats, at a time
when the most recent generic ballot from Gallup shows Democrats nationally with an 8 point
advantage and most of the vulnerable Democratic incumbents have huge cash advantages over
their Republican challengers.
I agree with your interpretation of the political appeal of supply side economics, but I
think you're greatly overestimating the ability of the Republicans to win enough seats in
November to fully enact their fiscal will on the White House.
"Second, the White House will probably
veto these cuts"
I wish I could agree. Given what we have seem from President Obama this past year and a
half, I think he is just as likely to go along with them as part of some nebulous plan to
angle for concessions from the other side, or simply to burnish his bipartisan
credentials.
Thanks for saying out loud what has been
apparent: that Republicanism has become fundamentally destructive. I don't think there's
any doubt that the empire is coming to an end, as all empires do, with the unwillingness of
the populace to bear the costs and burdens. The tax revolt is, at its heart, a cancer
destroying American power and prosperity.
This is doubly unhealthy because the United States needs a healthy opposition. In its
absence, the Democrats are also becoming corrupt. Their electoral appeal has increasingly
become: "Vote for us. We're not insane." That's necessary, of course, but hardly
sufficient. So we end up with a health care bill with no cost containment, a financial
regulatory bill that does not address the speculation and institutional giantism that was
at the heart of the collapse, and a stimulus bill half the size that it should have been
and heavily tilted against hiring the unemployed in favor of tax cuts. The Republicans
would have done worse, but that is small comfort.
Where are you wrong? If anywhere, in having any doubts that we are on the path to
destruction, will no reason to think that we will turn back.
A wild card in the events you outline
could be the report of the bipartisan commission on reducing the long-term budget deficit.
Larry Summers mentioned it in his contribution to the austerity debate. If, and it's a big
if, this report is substantive enough, it might provide cover for Republicans, Democrats,
and the White House to tackle long-term deficits.
In addition, I also feel you are a bit generous in labeling the Democrats relatively
fiscally responsible. Certainly, the president's budget had rather high projected deficits
over the next decade (and beyond).
Ultimately, according to the CBO a lot comes down to health care costs, particularly
Medicare. Reforming Medicare and controlling the explosion of costs currently projected for
it is the key. Everything else is secondary.
At last you have it spot on. There will
have to be a crisis because Weston democracies will not vote for wage cuts. May be it could
be done if the elite took a big cut first but that will not happen as most of the elite do
not see the problem as their fault.
You recently replied to one of my emails about thestateBritainis in with the words
"I also don't understand this masochism" Well you surely must now
"So long as U.S. banks are required to accept U.S. government checks -- which is to say
so long as the Republic exists -- then the government can and does spend without borrowing,
if it chooses to do so Insolvency, bankruptcy, or even higher real interest rates are not
among the actual risks to this system."
The only real risk to the system is inflation. The need for any sovereign government
that can issue its own currency to balance its budget is merely a useful fiction, of
political importance but not a real economic constraint.
' Those radical conservatives (a small
minority, I hope) who want to destroy the credit of the US federal government may succeed.
If so, that would be the end of the US era of global dominance. The destruction of fiscal
credibility could be the outcome of the policies of the party that considers itself the
most patriotic. '
That prospect holds no fear for the majority of contemporary Republican thinking in the
party and throughout the conservative base. Withdrawal from NATO, UN and the global stage
is precisely the plan. The contemporary Republican party is now more than ever aligned with
the populist, reactionary and isolationist sentiments of conservative small town America.
It will take many years, but I suspect America is on a long slide to an ungovernable failed
state and eventual break-up of the union.
"... As usually happens in times of distress, the Germans became a people for whom resolve was valued more highly than prudence, daring more than caution, and righteousness more than discretion. In many ways, they were a people not so different from today's Americans. ..."
"... What was needed, the Germans thought, was a strong leader -- someone who would put an end to politics as usual; most of all, someone who could unite all the divisions in Germany and dispel the clamor. They found that leader in Adolf Hitler, and for a time, most Germans were glad they did. ..."
"... How would we react if things got worse? If we were to lose the war in Iraq, leaving a fundamentalist regime in place; if we endured several more major terrorist attacks; if the economy collapsed; if fuel prices reached $7 per gallon -- would we cling even more fiercely to our democratic ideals? Or would we instead demand greater surveillance, more secret prisons, more arrests for "conspiracies" that amount to little more than daydreams, and more quashing of dissent? ..."
"... Our history suggests the latter. We Americans have had our flights from democracy -- the internment of Japanese-Americans in World War II, the Red Scare and the McCarthy era, Watergate -- but we have always pulled back from the brink and returned to normal. ..."
Imagine this situation: Your country has had a military setback in a war that was supposed to be over after a few months of "shock
and awe." Because of that war, it has lost the goodwill and prestige of much of the international community.
The national debt has grown to staggering size. Citizens complain bitterly about the government, especially the legislative branch,
for being a bunch of do-nothings working solely for themselves or for special interest groups. In fact, the political scene has pretty
much lost its center -- moderates are attacked by all sides as the political discourse becomes a clamor of increasingly extreme positions.
It seems there are election campaigns going on all the time, and they are increasingly vicious. The politicians just want to argue
about moral issues -- sexuality, decadent art, the crumbling family and the like -- while pragmatic matters of governance seem neglected.
Sound familiar? That society was Germany of the 1920s -- the ill-fated Weimar Republic. But it also describes more and more the
political climate in America today.
Germans were worried about the future of their country. They suffered from all sorts of terror, as assassinations, coup attempts
and crime pulled their society apart. The left blamed the right; the right blamed the left, and the political center simply dried
up.
To get themselves out of the mess, Germans might have demanded government that carefully mended fences with its allies and enemies;
one that judiciously hammered out compromises among the various political parties and sought the middle path.
But we know that didn't happen. In Germany of the 1920s, as now in 21st-century America, appeals to reason and prudence were no
way to get votes in times of crisis. Much more effective were appeals to the anger and fear of the German people. A politician could
attract more votes by criticizing the government than by praising it, and a vicious negative campaign was usually more effective
than a clean one. One of the problems of democracy is that voters aren't always rational, and appeals like these could be very effective.
As usually happens in times of distress, the Germans became a people for whom resolve was valued more highly than prudence, daring
more than caution, and righteousness more than discretion. In many ways, they were a people not so different from today's Americans.
What was needed, the Germans thought, was a strong leader -- someone who would put an end to politics as usual; most of all, someone
who could unite all the divisions in Germany and dispel the clamor. They found that leader in Adolf Hitler, and for a time, most
Germans were glad they did.
Of course, America is not 1920s Germany, and we are certainly not on the verge of a fascist state. But neither have we experienced
the deep crises the Germans faced. The setbacks of the Iraq/Afghan war are a far cry from the devastating loss of the First World
War; we are not considered the scourge of the international community, and we don't need wheelbarrows full of money to buy a loaf
of bread. But even in these relatively secure times, we have shown an alarming willingness to choose headstrong leadership over thoughtful
leadership, to value security over liberty; to accept compromises to constitutional principles, and to defy the opinion of the rest
of the world.
How would we react if things got worse? If we were to lose the war in Iraq, leaving a fundamentalist regime in place; if we endured
several more major terrorist attacks; if the economy collapsed; if fuel prices reached $7 per gallon -- would we cling even more
fiercely to our democratic ideals? Or would we instead demand greater surveillance, more secret prisons, more arrests for "conspiracies"
that amount to little more than daydreams, and more quashing of dissent?
Our history suggests the latter. We Americans have had our flights from democracy -- the internment of Japanese-Americans in World
War II, the Red Scare and the McCarthy era, Watergate -- but we have always pulled back from the brink and returned to normal.
The time is coming for us to pull back from the brink again. This must happen before the government gets so strong that it can
completely demonize opposition, gain complete control of the media, and develop dossiers on all its citizens. By then it will be
too late, and we'll have ourselves to blame.
Brian E. Fogarty, a sociology professor at the College of St. Catherine in St. Paul, is the author of "
War, Peace, and the Social
Order ."
"... By Thomas Ferguson, Director of Research for the Institute of New Economic Thinking; Professor Emeritus, University of Massachusetts, Boston. Originally published at the Institute of New Economic Thinking website ..."
"... Kane, who coined the term "zombie bank" and who famously raised early alarms about American savings and loans, analyzed European banks and how regulators, including the U.S. Federal Reserve, backstop them. ..."
"... We are only interested observers of the arm wrestling between the various EU countries over the costs of bank rescues, state expenditures, and such. But we do think there is a clear lesson from the long history of how governments have dealt with bank failures . [If] the European Union needs to step in to save banks, there is no reason why they have to do it for free best practice in banking rescues is to save banks, but not bankers. That is, prevent the system from melting down with all the many years of broad economic losses that would bring, but force out those responsible and make sure the public gets paid back for rescuing the financial system. ..."
"... In 2019, another question, alas, is also piercing. In country after country, Social Democratic center-left parties have shrunk, in many instances almost to nothingness. In Germany the SPD gives every sign of following the French Socialist Party into oblivion. Would a government coalition in which the SPD holds the Finance Ministry even consider anything but guaranteeing the public a huge piece of any upside if they rescue two failing institutions? ..."
Running in the background, though, was a new, darker theme: That the post-2008 reforms had gone too far in restricting policymakers'
discretion in crises. The trio most responsible for making the post-Lehman bailout revolution -- Ben Bernanke, Timothy Geithner,
and Henry Paulson --
expressed their
misgivings in a joint op-ed :
But in its post-crisis reforms, Congress also took away some of the most powerful tools used by the FDIC, the Fed and the Treasury
the FDIC can no longer issue blanket guarantees of bank debt as it did in the crisis, the Fed's emergency lending powers have
been constrained, and the Treasury would not be able to repeat its guarantee of the money market funds.
These powers were critical in stopping the 2008 panic The paradox of any financial crisis is that the policies necessary to
stop it are always politically unpopular. But if that unpopularity delays or prevents a strong response, the costs to the economy
become greater.
We need to make sure that future generations of financial firefighters have the emergency powers they need to prevent the next
fire from becoming a conflagration.
Sotto voce fears of this sort go back to the earliest reform discussions. But the question surfaced dramatically in Timothy Geithner's
2016 Per Jacobsson Lecture, " Are We Safer? The Case for Strengthening
the Bagehot Arsenal ." More recently, the Group of Thirty
has advanced similar suggestions -- not too surprisingly, since Geithner was co-project manager of the report, along with Guillermo
Ortiz, the former Governor of the Mexican Central Bank, who introduced the former Treasury Secretary at the Per Jacobson lecture.
Aside from the financial collapse itself, probably nothing has so shaken public confidence in democratic institutions as the wave
of bailouts in the aftermath of the collapse. The redistribution of wealth and opportunity that the bailouts wrought surely helped
fuel the populist surges that have swept over Europe and the United States in the last decade. The spectacle of policymakers rubber
stamping literally unlimited sums for financial institutions while preaching the importance of austerity for everyone else has been
unbearable to millions of people.
Especially in money-driven political systems, affording policymakers unlimited discretion also plainly courts serious risks. Put
simply, too big to fail banks enjoy a uniquely splendid situation of "heads I win, tails you lose" when they take risks. Scholars
whose research INET has supported, notably
Edward Kane , have shown how the certainty of government bailouts advantages large financial institutions, directly affecting
prices of their bonds and stocks.
For these reasons INET convened a panel at a G20 preparatory meeting in Berlin on "
Moral Hazard Issues in Extended Financial Safety Nets ."
The Power Point presentations of the three panelists are presented in the order in which they gave them, since the latter ones sometimes
comment on Edward Kane
's analysis of the European banks. Kane, who coined the term "zombie bank" and who famously raised early alarms about American
savings and loans, analyzed European banks and how regulators, including the U.S. Federal Reserve, backstop them.
Peter Bofinger
, Professor of International and Monetary Economics at the University of Würzburg and an outgoing member of the German Economic Council,
followed with a discussion of how the system has changed since 2008.
Helene Schuberth
, Head of the Foreign Research Division of the Austrian National Bank, analyzed changes in the global financial governance system
since the collapse.
The panel took place as public discussion of a proposed merger between two giant German banks, the Deutsche Bank and Commerzbank,
reached fever pitch. The panelists explored issues directly relevant to such fusions, without necessarily agreeing among themselves
or with anyone at INET.
But the point Robert Johnson, INET's President, and I
made some years back , amid an earlier wave of talk about using public money to bail out European banks, remains on target:
We are only interested observers of the arm wrestling between the various EU countries over the costs of bank rescues,
state expenditures, and such. But we do think there is a clear lesson from the long history of how governments have dealt with
bank failures . [If] the European Union needs to step in to save banks, there is no reason why they have to do it for free best
practice in banking rescues is to save banks, but not bankers. That is, prevent the system from melting down with all the many
years of broad economic losses that would bring, but force out those responsible and make sure the public gets paid back for rescuing
the financial system.
The simplest way to do that is to have the state take equity in the banks it rescues and write down the equity of bank shareholders
in proportion. This can be done in several ways -- direct equity as a condition for bailout, requiring warrants that can be exercised
later, etc. The key points are for the state to take over the banks, get the bad loans rapidly out of those and into a "bad bank,"
and hold the junk for a decent interval so the rest of the market does not crater. When the banks come back to profitability,
you can cash in the warrants and sell the stock if you don't like state ownership. That way the public gets its money back .at
times states have even made a profit.
In 2019, another question, alas, is also piercing. In country after country, Social Democratic center-left parties have shrunk,
in many instances almost to nothingness. In Germany the SPD gives every sign of following the French Socialist Party into oblivion.
Would a government coalition in which the SPD holds the Finance Ministry even consider anything but guaranteeing the public a huge
piece of any upside if they rescue two failing institutions?
there needs to be an asset tax on/break up of the megas. End the hyper-agglomeration of deposits at the tail end.
not holding my breath though. (see NY state congressional delegation)
to be generous, tax starts at $300 billion. Even then it affects only a dozen or so US banks. But would be enough to clamp
down on the hyper-scale of the largest US/world banks.
The world would be better off with lot more mid-sized regional players.
Anyone who mentions Timmy Geithner without spitting did not pay attention during the Obama reign of terror. He and Obama crowed
about the Making Home Affordable Act, implying that it would save all homeowners in mortgage trouble, but conveniently neglected
to mention that less than 100 banks had signed up. The thousands of non-signatories simply continued to foreclose. Not to mention
Eric Holder's intentional non-prosecution of banksters. For these and many other reasons, especially his "Islamic State is only
the JV team" crack, Obama was one of our worst presidents.
Fergusons graph on DBK's default probabilities coincides with the ECB's ending its asset purchase programme and entering the
"reinvestment phase of the asset purchase programme". https://www.ecb.europa.eu/mopo/implement/omt/html/index.en.html
The worst of the euro zombie banks appear to be getting tense and nervous. https://www.youtube.com/watch?v=dKpzCCuHDVY
Maybe that is why Jerome Powell did his volte-face last month on gradually raising interest rates. Note that the Fed also reduced
its automatic asset roll-off. I'm curious if the other euro-zombies in the "peers" return on equity chart are are experiencing
volatility also.
Apparently the worst fate you can suffer as long as you don't go Madoff is Fuld. According to wikipedia his company manages
a hundred million which must be humiliating. It's not as humiliating as locking the guy up in prison would be by a very long stretch.
Greenspan famously lamented that there isn't anything the regulators can really do except make empty threats. This is dishonest.
The regulations are not carved in stone like the ten commandments. In China they execute incorrigible financiers all the time.
Everybody forgets (or at least does not mention) that Greenspan was a member of the Class of '43, the (mostly Canadian) earliest
members of the Objectivist Cult with guru Ayn Rand. Expecting him to act rationally is foolish. It may happen accidentally (we
do not know why he chose to let the economy expand unhindered in 1999), but you cannot count on it. In a world with information
asymmetry expecting markets to be concerned about reputation is ridiculous. To expect them to police themselves for long term
benefit is even more ridiculous.
I think Finance is currently about 13% of the S&P 500, down from the peak of about 18% or so in 2007. I think we will have
a healthy economy and improved political climate when Finance is about 8-10% of the S&P 500 which is about where I think finance
plays a healthy, but not overwhelming rentier role in the economy.
This commenter Libezkova was right: Trump folded. And probably he was a phony fighter with neoliberalism and globalization from
the very beginning. So voters were deceived exactly like they were with Obama.
Notable quotes:
"... It's hilarious that the progressive neoliberals like DeLong, Krugman, Drum, Yglesias etc have said exactly nothing about Trump's tweets at Congressional Republicans over the independent ethics committee. ..."
"... There is a propaganda technique where you describe straw-person characterizations then undermine them. When in fact the whole longwinded campaign depends on readers and listeners not bothering or too tired to focus and see the mischaracterizations in the straw. ..."
"... This whole thing is an apologia, for propaganda purposes, as I see it. We all need to take care. It takes a lot of money and effort to organize such propaganda exercises. Please take care in using and reusing these type things. ..."
"... Theoretically that might give Democrats a chance, but I think the Clintonized Party is too corrupt to take this chance. "An honest politician is one who, when he is bought, will stay bought." ;-) ..."
"... In any case, 2018 elections will be very interesting as I think that the process of a slow collapse of neoliberal ideology and the rise of the US nationalist movements ("far right") will continue unabated. ..."
"At every point of the race, Mr. Trump was doing better among white voters without a college degree than Mitt Romney did
in 2012 - by a wide margin. Mrs. Clinton was also not matching Mr. Obama's support among black voters."
"Mrs. Clinton's gains were concentrated among the most affluent and best-educated white voters, much as Mr. Trump's gains
were concentrated among the lowest-income and least-educated white voters."
Trump won the Republican primary and general election.
""Trump dominated - in the primary and general elections - those districts represented by Congress's most conservative members,"
Tim Alberta wrote in National Review (he is now at Politico):
They once believed they were elected to advance a narrowly ideological agenda, but Trump's success has given them reason to
question that belief.
Among these archconservatives, who in the past had been fanatical in their pursuit of ideological purity, the realization that
they can no longer depend on unfailing support from their constituents has provoked deep anxiety."
These archconservatives who say that Trump's flimsy mandate is just based on just 80,000 votes in the rustbelt are in for a
rude awakening. He won the primary. In Northern States. In Southern States. Everywhere.
It's hilarious that the progressive neoliberals like DeLong, Krugman, Drum, Yglesias etc have said exactly nothing about
Trump's tweets at Congressional Republicans over the independent ethics committee.
There is a propaganda technique where you describe straw-person characterizations then undermine them. When in fact the whole
longwinded campaign depends on readers and listeners not bothering or too tired to focus and see the mischaracterizations in the
straw.
This whole thing is an apologia, for propaganda purposes, as I see it. We all need to take care. It takes a lot of money
and effort to organize such propaganda exercises. Please take care in using and reusing these type things.
"Trump has converted the GOP into a populist, America First party" is an overstatement. He definitely made some efforts
in this direction, but it is premature to declare this "fait accompli".
If we consider two possibilities: "GOP establishment chew up Trump" and "Trump chew up GOP establishment" it is clear that
possibility is more probable.
Theoretically that might give Democrats a chance, but I think the Clintonized Party is too corrupt to take this chance.
"An honest politician is one who, when he is bought, will stay bought." ;-)
In any case, 2018 elections will be very interesting as I think that the process of a slow collapse of neoliberal ideology
and the rise of the US nationalist movements ("far right") will continue unabated.
This is the same process that we see in full force in EU.
Comey was a part of the coup -- a color revolution against Trump with Bremmen (possibly assigned by Obama) pulling the strings. That's right. This is a banana republic with nukes.
Notable quotes:
"... "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.
"... It may look like Russiagate was a failure, but it was actually a success. It deflected the left's attention from endemic corruption within the leadership of the Democratic party, which supposedly represents the left. It rechannelled the left's political energies instead towards the convenient bogeymen targets of Trump and Russian president Vladimir Putin. ..."
"... What Mueller found – all he was ever going to find – was marginal corruption in the Trump camp. And that was inevitable because Washington is mired in corruption. In fact, what Mueller revealed was the most exceptional forms of corruption among Trump's team while obscuring the run-of-the-mill stuff that would have served as a reminder of the endemic corruption infecting the Democratic leadership too. ..."
"... Further, in focusing on the Trump camp – and relative minnows like Paul Manafort and Roger Stone – the Russiagate inquiry actually served to shield the Democratic leadership from an investigation into the much worse corruption revealed in the content of the DNC emails. ..."
"... What should have been at the front and centre of any inquiry was how the Democratic party sought to rig its primaries to prevent party members selecting anyone but Hillary as their presidential candidate. ..."
"... Trump faces opposition from within the establishment not because he is "anti-establishment" but because he refuses to decorate the pig's snout with lipstick. He is tearing the mask off late-stage capitalism's greed and self-destructiveness ..."
"... The corporate media, and the journalists they employ, are propagandists – for a system that keeps them wealthy. When Trump was a Republican primary candidate, the entire corporate media loved him because he was TV's equivalent of clickbait, just as he had been since reality TV began to usurp the place of current affairs programmes and meaningful political debate. ..."
"... The "[neo]liberal" corporate media shares the values of the Democratic party leadership. In other words, it is heavily invested in making sure the pig doesn't lose its lipstick. By contrast, Fox News and the shock-jocks, like Trump, prioritise making money in the short term over the long-term credibility of a system that gives them licence to make money. They care much less whether the pig's face remains painted. ..."
"... Just as too many on the left sleep-walked through the past two years waiting for Mueller – a former head of the FBI, the US secret police, for chrissakes! – to save them from Trump, they have been manipulated by liberal elites into the political cul-de-sac of identity politics. ..."
"... The "[neo]liberal" elites exploited identity politics to keep us divided by pacifying the most maginalised with the offer of a few additional crumbs. Trump has exploited identity politics to keep us divided by inflaming tensions as he reorders the hierarchy of "privilege" in which those crumbs are offered. In the process, both wings of the elite have averted the danger that class consciousness and real solidarity might develop and start to challenge their privileges. ..."
"... Were the US to get its own Corbyn as president, he or she would undoubtedly face a Mueller-style inquiry, and one far more effective at securing the president's impeachment than this one was ever going to be. ..."
Here are three important lessons for the progressive left to consider now that it is clear the inquiry by special
counsel Robert Mueller into Russiagate is never going to
uncover collusion between Donald Trump's camp and the Kremlin in the 2016 presidential election.
Painting the pig's face
The left never had a dog in this race. This was always an in-house squabble between different wings
of the establishment. Late-stage capitalism is in terminal crisis, and the biggest problem facing our corporate elites is how to
emerge from this crisis with their power intact. One wing wants to make sure the pig's face remains painted, the other is
happy simply getting its snout deeper into the trough while the food lasts.
Russiagate was never about substance, it was about who gets to image-manage the decline of a turbo-charged,
self-harming neoliberal capitalism.
The leaders of the Democratic party are less terrified of Trump and what he represents than they are of us
and what we might do if we understood how they have rigged the political and economic system to their permanent advantage.
It may look like Russiagate was a failure, but it was actually a success. It deflected the left's attention
from endemic corruption within the leadership of the Democratic party, which supposedly represents the left. It rechannelled the
left's political energies instead towards the convenient bogeymen targets of Trump and Russian president Vladimir Putin.
Mired in corruption
What Mueller found – all he was ever going to find – was marginal corruption in the Trump camp. And that was
inevitable because Washington is mired in corruption. In fact, what Mueller revealed was the most exceptional forms of corruption
among Trump's team while obscuring the run-of-the-mill stuff that would have served as a reminder of the endemic corruption infecting
the Democratic leadership too.
An anti-corruption investigation would have run much deeper and exposed far more. It would have highlighted
the Clinton Foundation, and the role of mega-donors like James Simons, George Soros and Haim Saban who funded Hillary's campaign
with one aim in mind: to get their issues into a paid-for national "consensus".
Further, in focusing on the Trump camp – and relative minnows like Paul Manafort and Roger Stone – the
Russiagate inquiry actually served to shield the Democratic leadership from an investigation into the much worse corruption revealed
in the content of the DNC emails. It was the leaking / hacking of those emails that provided the rationale for Mueller's investigations.
What should have been at the front and centre of any inquiry was how the Democratic party sought to rig its primaries to prevent
party members selecting anyone but Hillary as their presidential candidate.
So, in short, Russiagate has been two years of wasted energy by the left, energy that could have been spent
both targeting Trump for what he is really doing rather than what it is imagined he has done, and targeting the Democratic leadership
for its own, equally corrupt practices.
Trump empowered
But it's far worse than that. It is not just that the left wasted two years of political energy on
Russiagate. At the same time, they empowered Trump, breathing life into his phony arguments that he is the anti-establishment president,
a people's president the elites are determined to destroy.
Trump faces opposition from within the establishment not because he is "anti-establishment" but because he
refuses to decorate the pig's snout with lipstick. He is tearing the mask off late-stage capitalism's greed and self-destructiveness.
And he is doing so not because he wants to reform or overthrow turbo-charged capitalism but because he wants to remove the last,
largely cosmetic constraints on the system so that he and his friends can plunder with greater abandon – and destroy the planet more
quickly.
The other wing of the neoliberal establishment, the one represented by the Democratic party leadership, fears
that exposing capitalism in this way – making explicit its inherently brutal, wrist-slitting tendencies – will awaken the masses,
that over time it will risk turning them into revolutionaries. Democratic party leaders fear Trump chiefly because of the threat
he poses to the image of the political and economic system they have so lovingly crafted so that they can continue enriching themselves
and their children.
Trump's genius – his only genius – is to have appropriated, and misappropriated, some of the language of the
left to advance the interests of the 1 per cent. When he attacks the corporate "liberal" media for having a harmful agenda, for serving
as propagandists, he is not wrong. When he rails against the identity politics cultivated by "liberal" elites over the past two decades
– suggesting that it has weakened the US – he is not wrong. But he is right for the wrong reasons.
TV's version of clickbait
The corporate media, and the journalists they employ, are propagandists – for a system that keeps them
wealthy. When Trump was a Republican primary candidate, the entire corporate media loved him because he was TV's equivalent of clickbait,
just as he had been since reality TV began to usurp the place of current affairs programmes and meaningful political debate.
The handful of corporations that own the US media – and much of corporate America besides – are there both
to make ever-more money by expanding profits and to maintain the credibility of a political and economic system that lets them make
ever more money.
The "[neo]liberal" corporate media shares the values of the Democratic party leadership. In other
words, it is heavily invested in making sure the pig doesn't lose its lipstick. By contrast, Fox News and the shock-jocks, like Trump,
prioritise making money in the short term over the long-term credibility of a system that gives them licence to make money. They
care much less whether the pig's face remains painted.
So Trump is right that the "liberal" media is undemocratic and that it is now propagandising against him. But
he is wrong about why. In fact, all corporate media – whether "liberal" or not, whether against Trump or for him – is undemocratic.
All of the media propagandises for a rotten system that keeps the vast majority of Americans impoverished. All of the media cares
more for Trump and the elites he belongs to than it cares for the 99 per cent.
Gorging on the main course
Similarly, with identity politics. Trump says he wants to make (a white) America great again, and uses the
left's obsession with identity as a way to energize a backlash from his own supporters.
Just as too many on the left sleep-walked through the past two years waiting for Mueller – a former head
of the FBI, the US secret police, for chrissakes! – to save them from Trump, they have been manipulated by liberal elites into the
political cul-de-sac of identity politics.
Just as Mueller put the left on standby, into waiting-for-the-Messiah mode, so simple-minded, pussy-hat-wearing
identity politics has been cultivated in the supposedly liberal bastions of the corporate media and Ivy League universities – the
same universities that have turned out generations of Muellers and Clintons – to deplete the left's political energies. While we
argue over who is most entitled and most victimised, the establishment has carried on raping and pillaging Third World countries,
destroying the planet and siphoning off the wealth produced by the rest of us.
These liberal elites long ago worked out that if we could be made to squabble among ourselves about who was
most entitled to scraps from the table, they could keep gorging on the main course.
The "[neo]liberal" elites exploited identity politics to keep us divided by pacifying the most maginalised
with the offer of a few additional crumbs. Trump has exploited identity politics to keep us divided by inflaming tensions as he reorders
the hierarchy of "privilege" in which those crumbs are offered. In the process, both wings of the elite have averted the danger that
class consciousness and real solidarity might develop and start to challenge their privileges.
The Corbyn experience
3. But the most important lesson of all for the left is that support among its ranks for the Mueller inquiry
against Trump was foolhardy in the extreme.
Not only was the inquiry doomed to failure – in fact, not only was it designed to fail – but it has set a precedent
for future politicised investigations that will be used against the progressive left should it make any significant political gains.
And an inquiry against the real left will be far more aggressive and far more "productive" than Mueller was.
If there is any doubt about that look to the UK. Britain now has within reach of power the first truly progressive
politician in living memory, someone seeking to represent the 99 per cent, not the 1 per cent. But Jeremy Corbyn's experience as
the leader of the Labour party – massively swelling the membership's ranks to make it the largest political party in Europe – has
been eye-popping.
I have documented Corbyn's travails regularly in this blog over the past four years at the hands of the British
political and media establishment. You can find many examples
here.
Corbyn, even more so than the small, new wave of insurgency politicians in the US Congress, has faced a relentless
barrage of criticism from across the UK's similarly narrow political spectrum. He has been attacked by both the rightwing media and
the supposedly "liberal" media. He has been savaged by the ruling Conservative party, as was to be expected, and by his own parliamentary
Labour party. The UK's two-party system has been exposed as just as hollow as the US one.
The ferocity of the attacks has been necessary because, unlike the Democratic party's success in keeping a
progressive leftwinger away from the presidential campaign, the UK system accidentally allowed a socialist to slip past the gatekeepers.
All hell has broken out ever since.
Simple-minded identity politics
What is so noticeable is that Corbyn is rarely attacked over his policies – mainly because they have
wide popular appeal. Instead he has been hounded over fanciful claims that, despite being a life-long and very visible anti-racism
campaigner, he suddenly morphed into an outright anti-semite the moment party members elected him leader.
I will not rehearse again how implausible these claims are. Simply look through these previous
blog posts
should you be in any doubt.
But what is amazing is that, just as with the Mueller inquiry, much of the British left – including prominent
figures like Owen Jones and the supposedly countercultural Novara Media – have sapped their political energies in trying to placate
or support those leading the preposterous claims that Labour under Corbyn has become "institutionally anti-semitic". Again, the promotion
of a simple-minded identity politics – which pits the rights of Palestinians against the sensitivities of Zionist Jews about Israel
– was exploited to divide the left.
The more the left has conceded to this campaign, the angrier, the more implacable, the more self-righteous
Corbyn's opponents have become – to the point that the Labour party is now in serious danger of imploding.
A clarifying moment
Were the US to get its own Corbyn as president, he or she would undoubtedly face a Mueller-style inquiry, and
one far more effective at securing the president's impeachment than this one was ever going to be.
That is not because a leftwing US president would be more corrupt or more likely to have colluded with a foreign
power. As the UK example shows, it would be because the entire media system – from the New York Times to Fox News – would be against
such a president. And as the UK example also shows, it would be because the leaderships of both the Republican and Democratic parties
would work as one to finish off such a president.
In the combined success-failure of the Mueller inquiry, the left has an opportunity to understand in a much
more sophisticated way how real power works and in whose favour it is exercised. It is moment that should be clarifying – if we are
willing to open our eyes to Mueller's real lessons.
The American aviation company has recently been immersed in a scandal after the crash of two
737 MAX 8 airliners in a span of less than six months. An official investigation into the
catastrophes is ongoing, but some reports suggest that Boeing's automatic anti-stall system and
a faulty sensor could be behind them. Boeing has won a three-year contract with the US Navy
according to which it will upgrade 78 F/A-18 Super Hornets from Block II modifications to Block
III, a company
statement reads. The upgrades will include an enhanced network capability, longer range,
reduced radar signature, an advanced cockpit system, and an enhanced communication system for
the bomber jets. It will also extend the jets' service life from 6,000 hours to 10,000 hours.
The aviation company will commence work on meeting the orders in the $4 billion contract
"early in the next decade". The company noted that the contract saves some $395 million in
taxpayer money, as it is a multi-year contract and thus the price for the work carried out
during this period is fixed and will not be determined on a year-by-year basis.
The signing of the contract comes at a difficult time for Boeing, as its popular 737 MAX
planes have wound up at the centre of an investigation after two aircraft in the series crashed
in a span of less than six months. The crashes led to a global grounding of the planes, with
the US being one of the last countries to do so. Although a probe into the reasons behind
crashes is still ongoing, investigators have said that after seeing data from the black boxes,
there are certain similarities between the two cases.
The crashes have also forced the US military to start reviewing the training procedures for
its pilots of large cargo and transport planes, including the president's Air Force One, citing
the need to make sure they can handle emergency situations.
I'm gratified that there seems to be general acceptance of the core secular stagnation
argument. "Normal" policy settings of real interest rates in the 2 percent range, balanced
primary budgets and stable financial markets are a prescription for stagnation and
underemployment. Such economic success as the industrial world has enjoyed in recent decades
has reflected a combination of very low real rates, big budget deficits, private leveraging up
and asset bubbles.
No one from whom I have heard doubts the key conclusion that a combination of meaningfully
positive real interest rates and balanced budgets would likely be a prescription for sustained
recession if not depression in the industrial world.
Notice that this is a much more fundamental argument than the suggestion that the some
effective lower bound on interest rates may impede stabilizing the economy. The argument is
that because of chronic private sector tendency towards oversaving, economies may be prone to
underemployment and financial stability absent policy responses which are themselves
problematic.
This is an argument much more in the spirit of Keynes, the early Keynesians, and today's
Post-Keynesians than the New Keynesians who have set the terms for much of contemporary
macroeconomic discourse both in academia and in the world's central banks.
The central feature of New Keynesian models is an idea that economies have an equilibrium to
which they naturally revert independent of policies pursued. Good central bank policy achieves
a desired inflation target (assumed to be feasible) while minimizing the amplitude of
fluctuations around that equilibrium.
In contrast contemporary experience, where inflation has been below target almost throughout
the industrial world for a decade and is expected by markets to remain below target for
decades, and where output is sustained only by large budget deficits or extraordinary monetary
policies, suggest that central banks acting alone cannot necessarily attain inflation targets
and that misguided policy could easily not just raise the volatility of output but also reduce
its average level.
While there seems to be little doubt that real interest rates–short and long, ex ante
and ex post -- have declined very substantially even as (other things equal) budget deficits
and expanded social security programs should have increased them, there remains debate about
how to analyze these trends. Lukasz and I argue that adjustment to balance saving and
investment is the best way understand declining real rates. DeLong wonders about changing risk
premiums and Wolf cites BIS work arguing that low rates reflect the monetary policy regime.
There is no reason why there needs to be only one cause of low real rates so these factors may
enter. But as I expect we will illustrate in the revised version of the paper, the largest part
of the low frequency variation in ex ante real returns is accounted for by a downward trending
factor common to all asset prices. This is illustrated for the US in the figure below. So risk
premiums or factors specific to Treasuries are likely not high order.
Figure: Decline in US real asset returns
Granting that secular stagnation is a problem, there is the question of policy response. The
right policy response will be the one that assures that full employment is maintained with a
minimum of collateral problems. Sandbu argues against the notion of secular stagnation in part
because he thinks it may lead in unconstructive directions like protectionism and because he
believes that stagnation issues can be feasibly and relatively easily addressed by lowering
rates. Wolf, relying on the BIS, is alarmed by the toxic effects of very low rates on financial
stability in the short run and economic performance in the long run, and prefers fiscal
stimulus. Leonhardt prefers a broad menu of measures to absorb saving and promote
investment.
I am not certain of the right approach and I wish there was more evidence to bring to bear
on the question. I can certain see the logic of the "zero is just another number" view, that
holds that the current environment poses no new fundamental issues but just may require
technical changes to make more negative interest rates possible. I am skeptical because (i) I
am not sure how large the stimulus effect of rates going more negative is because of damage to
banks, reduced interest income for consumers, and because capital cost is already not the
barrier to investment; (ii) I wonder about the quality of any investment that was not made at a
zero rate but was made at a negative rate; and (iii) I suspect that a world of significantly
negative nominal rates if sustained will be a world of leveraging, risk seeking and bubbles. I
have trouble thinking about behavior in situations where people and firms are paid to
borrow!
I am inclined to prefer more reliance on reasonably managed fiscal policies as a response to
secular stagnation: government borrowing at negative real rates and investing seems very
attractive in a world where there are many projects with high social returns. Moreover, we are
accustomed to thinking in terms of debt levels but it may be more appropriate to think in terms
of sustained debt service levels. With near zero rates these are below average in most
industrial countries. The content of fiscal policies is crucial. Measures which run up
government debt without stimulating demand like large parts of the Trump tax cut are ill
advised. In contrast measures which promote investment and raise the tax base down the road are
much more attractive.
There are of course other measures beyond stabilization policies like fighting monopolies,
promoting a more equal income distribution, and strengthening retirement security for which the
desire to maintain macroeconomic stability provides an additional rationale.
Thirty-five Congressional mandates sit unanswered, on everything from minimum seat space to secondary barriers protecting
cockpits. The top job at the Federal Aviation Administration has been open for 14 months. Enforcement fines against major U.S.
airlines have dropped 88% in the past two years, even as three-hour tarmac delays have more than doubled.
The Transportation Department under Secretary Elaine Chao has seemingly been delayed on a number of issues important to
travelers. Even with airlines begging for rules on
emotional-support
animals
, and both Republicans and Democrats expressing concerns about swollen fees, shrunken seating and punitive airline
policies, the DOT has been loath to issue new regulations.
Ethiopian Airlines' Boeing 737 MAX 8 Crash: Three Things to Know
An investigation has been launched after an Ethiopian Airlines Boeing 737 MAX 8 crashed shortly after takeoff on
Sunday, killing all on board. WSJ aerospace reporter Robert Wall discusses the possible focus of the investigation,
and more. Photo: Getty Images
Now Ms. Chao's department, which includes the FAA, faces its toughest regulatory challenge: safety concerns on the
Boeing
737
MAX.
Two
fatal crashes
of the new airplane in the past five months have led several nations and some airlines to ground the jet.
So far, the FAA, siding with Boeing and U.S. airlines,
says
the plane is safe
and a software fix is coming by the end of April. Sales of Boeing planes have been important to
President Trump's trade and employment objectives. But pressure is mounting, and if investigators find the same system is
responsible for both crashes, it will be increasingly difficult for the FAA and Ms. Chao to leave a plane with a fatal flaw in
the air.
Consumer advocates say the Transportation Department has been invisible.
Inside U.S. Airlines' Decisions to Keep Flying the 737 MAX
Southwest, United and American faced worries from passengers and employees after the Ethiopian Airlines crash.
They say data, not economics, drove their choices.
CLICK TO READ STORY
What You Need to Know About Flying On a Boeing 737 MAX
After the crash of Ethiopian Airlines Flight 302, the second for this type of plane in five months, here's what
we know about that jet, and what we don't.
CLICK TO READ STORY
Before You Buy Plane Tickets, Remember These Four Things
When to buy, which way to fly and other money-saving travel tips for airline travel.
CLICK TO READ STORY
The Best U.S. Airports 2018
Which airports have the fewest delays, the shortest lines and the fastest Wi-Fi? The WSJ ranked where they
succeed and fail, using 14 statistical categories and a survey of over 4,800 WSJ readers.
CLICK TO READ STORY
Your Rock-Solid Case for Flying Business Class for Work
Corporate travel departments are getting less stingy with travel perks for employees who travel constantly -- at
least for now.
CLICK TO READ STORY
THE MIDDLE SEAT
"There doesn't seem to be any meaningful enforcement going on," says John Breyault, vice president at the National Consumers
League. "The DOT under Sec. Chao seems to be even less willing to engage in serious consumer protection efforts than it did
under President Obama's watch, which is a pretty low bar."
The DOT declined to answer specific questions for this story. It offered a general statement saying it has improved its
website in the past year and is giving consumers more information by including performance of regional partners with
big-airline operating statistics. A DOT spokeswoman says it plans to issue rules on service animals later this year and plans
to allow airlines to use electronic payment methods when compensating travelers for bumping them involuntarily from flights.
With its response, the department included a list of seven accomplishments under Ms. Chao, who also oversees surface
transportation. None dealt with airline travel.
Airlines and many travelers applaud the Trump administration's aversion to regulation and willingness to let consumer choice
discipline unpopular business decisions. Deregulating fares and schedules in 1978, after all, led to a boom in
affordable,
convenient travel
.
In keeping with the push to reduce regulation, Ms. Chao's DOT
stopped
a number of rule-making efforts
in progress at the end of the Obama administration. Among them: imposing requirements on
disclosure of baggage and other fees at ticket purchase, as well as a review of how fees in the airline industry were
affecting competition.
Transportation Secretary Elaine Chao lists seven accomplishments during her administration, none of which deal with
air travel.
PHOTO:
JIM
LO SCALZO/EPA/SHUTTERSTOCK
Airlines applauded those moves. "There is a reluctance to regulate unless there's a market failure or some other type of
safety or real unfair and deceptive practice that's going on," says Sharon Pinkerton, senior vice president for legislative
and regulatory policy at Airlines for America, the industry's Washington, D.C., lobbying group.
"We're thankful for that, frankly," she added, "that their philosophy isn't to regulate every little thing."
The Transportation Department is the only stop for passenger rights since Congress exempted air travel in 1978 from any state
or local regulation.
Recent changes in air travel have led to a host of new issues:
* Airlines have repeatedly asked DOT to adopt the definition of service animals in the Americans With Disabilities Act, which
requires specific training for support animals.
Cabins
are full of untrained pets
wearing service-animal vests to avoid high airline fees or shipping in crates in baggage
compartments.
"We just think there should be one rule for the entire country," says Ms. Pinkerton of A4A. "There's no reason to have a more
lenient approach to emotional-service animals in an environment like an airplane."
*
Congress passed a law sponsored by Democrats and Republicans that requires DOT to establish
minimum
standards for seat size
and legroom on planes and make each carrier post the amount of space available for each passenger
on its website. The deadline is in October. Airlines and advocates say they've seen no action so far.
*
Last year Congress also required that DOT
hire
a consumer advocate
to help travelers resolve service complaints, report on how DOT is handling complaints and recommend
improvements to enforce aviation consumer protection rules. The position remains open.
*
DOT hasn't conducted compliance inspections at airline headquarters in more than two years, the Government
Accountability Office
reported
in November
. Compliance inspections, done routinely in past years, involve checking airline customer-service policies and
passenger complaints received by airlines. They also make sure airlines are reporting data properly to DOT.
In its response to the GAO, the department said it has a "robust and multifaceted program" to investigate airlines and enforce
consumer protection requirements.
*
An aviation
consumer-protection
advisory committee
that is supposed to have one passenger advocate among four members has no one with any consumer
aviation experience. The designated consumer advocate appointed by the Trump administration comes from a think tank favoring
free markets over regulation, where she works on agriculture and trade issues.
A Fine Distinction
Airlines have seen far fewer Transportation Department fines in the first two years of the Trump Administration.
They've also experienced more long domestic tarmac delays over that time.
DOT enforcement fines against U.S. major airlines
million
$5
4
3
2
1
$560,000
0
2017
2016
2018
Domestic three-hour tarmac delays
200
181
150
100
50
0
2018
2016
2017
*2018 tarmac delays are through November only
Sources: WSJ compilation of DOT filings (fines); Bureau of Transportation Statistics (delays)
The tarmac delay rule is an example of one public policy that actually worked. Flights stranded at airports with passengers
held on board with no food, water and in some cases limited working bathrooms became a major issue. In 2007,
more
than 1,600 domestic U.S. flights
had tarmac delays of more than three hours, according to the Bureau of Transportation
Statistics. Some stretched to
10
hours or more
. In 2010, the Transportation Department enacted a rule to levy heavy fines on airlines for tarmac delays of
more than three hours on domestic flights and four hours on international flights.
Airlines adjusted
, investing in better tracking of flights on the ground and more resources to get people off stranded
planes. Though airlines warned of massive cancellations if the rule was imposed, cancellations went down. So did tarmac
delays: From 2011 to 2016, there were fewer than 100 a year on domestic flights.
But 2017 and 2018 saw three-hour tarmac delays more than double. At the same time, DOT enforcement against U.S. major airlines
declined sharply.
In 2016, DOT levied a total of $4.7 million in fines against U.S. major carriers for all issues, not just tarmac delays. In
2017, that number dropped to $2.7 million, then to $560,000 in 2018. Only one fine, $1.5 million against Frontier Airlines in
2017, was for domestic tarmac delays. DOT did fine several foreign airlines for delays longer than four hours. And it hit
American and Delta with tarmac delay fines last month, picking up the pace a bit.
Airlines say the increase in tarmac delays in 2017 and 2018 was a result of an
increase
in severe weather
the past two years, not lax DOT enforcement.
Yves here. This post focuses on an important slice of history in what "freedom" has meant in
political discourse in the US. But I wish it had at least mentioned how a well-funded, then
extreme right wing effort launched an open-ended campaign to render US values more friendly to
business. They explicitly sought to undo New Deal programs and weaken or end other social
safety nets. Nixon Supreme Court Justice Lewis Powell codified the strategy for this initiative
in the so-called Powell Memo of 1971.
One of the most effective spokesmen for this libertarian program was Milton Friedman, whose
bestseller Free to Choose became the foundation for a ten-part TV series.
America is having a heated debate about the meaning of the word socialism . We'd be
better served if, instead, we were debating the meaning of freedom .
The
Oregonian reported last week that fully 156,000 families are on the edge of homelessness in
our small-population state. Every one of those households is now paying more than 50 percent of
its monthly income on rent, and none of them has any savings; one medical bill, major car repair
or job loss, and they're on the streets.
While socialism may or may not solve their problem, the more pressing issue we have is an
entire political party and a huge sector of the billionaire class who see homelessness not as a
problem, but as a symptom of a "free" society.
The words freedom and liberty are iconic in American culture -- probably more so than with
any other nation because they're so intrinsic to the literature, declarations and slogans of our
nation's founding.
The irony -- of the nation founded on the world's greatest known genocide (the systematic
state murder of tens of millions of Native Americans) and over three centuries of legalized
slavery and a century and a half of oppression and exploitation of the descendants of those
slaves -- is extraordinary. It presses us all to bring true freedom and liberty to all
Americans.
But what do those words mean?
If you ask the Koch brothers and their buddies -- who slap those words on pretty much
everything they do -- you'd get a definition that largely has to do with being "free" from
taxation and regulation. And, truth be told, if you're morbidly rich, that makes a certain amount
of sense, particularly if your main goal is to get richer and richer, regardless of your
behavior's impact on working-class people, the environment, or the ability of government to
function.
On the other hand, the definition of freedom and liberty that's been embraced by so-called
"democratic socialist" countries -- from Canada to almost all of Europe to Japan and Australia --
you'd hear a definition that's closer to that articulated by Franklin D. Roosevelt when he
proposed, in January 1944, a " second Bill
of Rights " to be added to our Constitution.
FDR's proposed amendments included the right to a job, and the right to be paid enough to
live comfortably; the right to "adequate food and clothing and recreation"; the right to start a
business and run it without worrying about "unfair competition and domination by monopolies"; the
right "of every family to a decent home"; the right to "adequate medical care to achieve and
enjoy good health"; the right to government-based "protection from the economic fears of old age,
sickness, accident, and unemployment"; and the right "to a good education."
Roosevelt pointed out that, "All of these rights spell security." He added, "America's own
rightful place in the world depends in large part upon how fully these and similar rights have
been carried into practice for our citizens. For unless there is security here at home there
cannot be lasting peace in the world."
The other nations mentioned earlier took President Roosevelt's advice to heart. Progressive
"social democracy" has kept Europe, Canada, and the developed nations of the East and South
Pacific free of war for almost a century -- a mind-boggling feat when considering the history of
the developed world since the 1500s.
Just prior to FDR winning the White House in the election of 1932, the nation had been
treated to 12 years of a bizarre Republican administration that was the model for today's GOP. In
1920, Warren Harding won the presidency on a campaign of "more industry in government, less
government in industry" -- privatize and deregulate -- and a promise to drop the top tax rate of
91 percent down to 25 percent.
He kept both promises, putting the nation into a sugar-high spin called the Roaring '20s,
where the rich got fabulously rich and working-class people were being beaten and murdered by
industrialists when they tried to unionize. Harding, Coolidge, and Hoover (the three Republican
presidents from 1920 to 1932) all cheered on the assaults, using phrases like "the right to work"
to describe a union-free nation.
In the end, the result of the "
horses and sparrows " economics advocated by Harding ("feed more oats to the horses and
there'll be more oats in the horse poop to fatten the sparrows" -- that generation's version of
trickle-down economics) was the Republican Great Depression (yes, they called it that until after
World War II).
Even though Roosevelt was fabulously popular -- the only president to be elected four times --
the right-wingers of his day were loud and outspoken in their protests of what they called
"socialist" programs like Social Security, the right to unionize, and government-guaranteed job
programs including the WPA, REA, CCC, and others.
The Klan and American Nazis were assembling by the hundreds of thousands nationwide -- nearly
30,000 in Madison Square Garden
alone -- encouraged by wealthy and powerful "economic royalists" preaching "freedom" and "
liberty ." Like the Kochs' Freedomworks , that generation's huge and well-funded
(principally by the DuPonts' chemical fortune) organization was the Liberty League .
Roosevelt's generation had seen the results of this kind of hard-right "freedom" rhetoric in
Italy, Spain, Japan and Germany, the very nations with which we were then at war.
Speaking of "the grave dangers of 'rightist reaction' in this Nation," Roosevelt told America in that same speech that: "[I]f
history were to repeat itself and we were to return to the so-called 'normalcy' of the 1920s --
then it is certain that even though we shall have conquered our enemies on the battlefields
abroad, we shall have yielded to the spirit of Fascism here at home."
Although right-wingers are still working hard to disassemble FDR's New Deal -- the GOP budget
for 2019 contains massive cuts to Social Security, as well as to Medicare and Medicaid -- we got
halfway toward his notion of freedom and liberty here in the United States:
You're not free if
you're old and deep in poverty, so we have Social Security (although the GOP wants to gut it).
You're not free if you're hungry, so we have food stamps/SNAP (although the GOP wants to gut
them). You're not free if you're homeless, so we have housing assistance and homeless shelters
(although the GOP fights every effort to help homeless people). You're not free if you're sick
and can't get medical care, so we have Medicare, Medicaid, and Obamacare (although the GOP wants
to gut them all). You're not free if you're working more than 40 hours a week and still can't
meet basic expenses, so we have minimum wage laws and the right to unionize (although the GOP
wants to gut both). You're not free if you can't read, so we have free public schools (although
the GOP is actively working to gut them). You're not free if you can't vote, so we've passed
numerous laws to guarantee the right to vote (although the GOP is doing everything it can to keep
tens of millions of Americans from voting).
The billionaire class and their wholly owned Republican politicians keep trying to tell us
that "freedom" means the government doesn't provide any of the things listed above.
Instead, they tell us (as Ron Paul famously did in a GOP primary debate years ago) that, if we're
broke and sick, we're "free" to die like a feral dog in the gutter.
Freedom is homelessness, in the minds of the billionaires who own the GOP.
Poverty, lack of education, no access to health care, poor-paying jobs, and barriers to voting
are all proof of a free society, they tell us, which is why America's lowest life expectancy,
highest maternal and childhood death rates, lowest levels of education, and lowest pay
are almost all in GOP-controlled states .
America -- particularly the Democratic Party -- is engaged in a debate right now about the
meaning of socialism . It would be a big help for all of us if we were, instead, to have
an honest debate about the meaning of the words freedom and liberty .
Let us not forget the other propaganda arm of Republican party and big money- Fox news. They
spew the freedom nonsense while not adhering to any definition of the word.
I worked in the midwest as an Engineer in the 90s to early 2000s and saw plants being
gutted/shifted overseas, Union influence curtailed and mid level and bottom pay stay flat for
decades; all in the name of free market.
Sadly the same families that are the worst affected vote Republican! But we know all this
and have known it for a while. What will change?
The intro to this post is spot on. The Powell memo outlined a strategy for a corporate
coup d'eta. Is was completely successful. Now that the business class rules America, their only
vision is to continue the quest and cannibalize the country and enslave its people by any means
possible. What tools do they use to achieve these ends? -- debt, fear, violence and pandering
to human vanity as a motivator. Again, very successful.
Instead of honest public debate- which is impossible when undertaken with liars and thieves,
a good old manifesto or pamphlet like Common Sense is in order. Something calling out concrete
action that can be taken by commoners to regain their social respect and power. That should
scare the living daylights out of the complacent and smug elite.
Its that, or a lot of public infrastructure is gong to be broken up by the mob- which
doesn't work out in the long run. The nations that learn to work with and inspire their
populations will prosper- the rest will have a hard time of it. Look no further than America's
fall.
This piece raises some important points, but aims too narrowly at one political party,
when the D-party has also been complicit in sharing the framing of "freedom" as less
government/regulation/taxation. After all, it was the Clinton administration that did welfare
"reform", deregulation of finance, and declared the end of the era of "big government", and
both Clinton and Obama showed willingness to cut Social Security and Medicare in a "grand
bargain".
If in place of "the GOP," the author had written, "The national Democratic and Republican
parties over the past fifty years," his claim would be much more accurate. To believe what he
says about "the GOP," you have to pretend that Clinton, and Obama, and Pelosi, and Schumer, and
Feinstein simply don't exist and never did. The author's implicit valorization of Obamacare is
even more disheartening.
But perhaps this is the *point* of the piece after all? If I were a consultant to the DNC
(and I make less than $100,000/yr so I am clearly not), I would advocate that they commission,
underscore, and reward pieces exactly like this one. For the smartest ones surely grasp that
the rightist oligarchic policy takeover has in fact happened, and that it has left in its wake
millions of disaffected, indebted, uneducated, uninsured Americans.
(Suggesting that it hadn't was the worst idiocy of Clinton's 2016 campaign. It would have
been much better had she admitted it and blamed it on the Republican Senate while holding dear
old Obama up as a hamstrung martyr for the cause. I mean, this is what everybody at DailyKos
already believes, and the masses -- being poor and uneducated and desperate -- can be brought
around to believe anything, or anyway, enough of them can be.)
I would advocate that the DNC double down on its rightful claims to Roosevelt's inheritance,
embrace phrases like "social democracy" and "freedom from economic insecurity," and shift
leftward in all its official rhetoric. Admit the evisceration of the Roosevelt tradition, but
blame it all on the GOP. Maybe *maybe* even acknowledge that past Democratic leaders were a
little naive and idealistic in their pursuit of bipartisanship, and did not understand the
truly horrible intentions of the GOP. But today's Democrats are committed to wresting back the
rights of the people from the evil clutches of the Koch Republicans. This sort of thing.
Would my advice be followed? Or would the *really* smart ones in the room demure? If so, why
do you think they would?
In short, I read this piece as one stage in an ongoing dialectic in the Democratic Party in
the run-up to the 2020 election wherein party leaders try to determine how leftward its
"official" rhetoric is able to sway before becoming *so* unbelievable (in light of historical
facts) that it cannot serve as effective propaganda -- even among Americans!
Team Blue elites are the children of Bill Clinton and the Third Way, so the echo chamber was
probably terrible. Was Bill Clinton a bad President? He was the greatest Republican President!
The perception of this answer is a key. Who rose and joined Team Blue through this run? Many
Democrats don't recognize this, or they don't want to rock the boat. This is the structural
problem with Team Blue. The "generic Democrat" is AOC, Omar, Sanders, Warren, and a handful of
others.
Can the Team Blue elites embrace a Roosevelt identity? The answer is no. Their ideology is
so wildly divergent they can't adjust without a whole sale conversion.
More succinctly, the Third Way isn't about helping Democrats win by accepting not every
battle can be won. Its about advancing right wing politics and pretending this isn't what its
about. If they are too clear about good policy, they will be accused of betrayal.
This article makes me wonder if the GOP is still a political party anymore. I know, I know,
they have the party structure, the candidates, the budget and all the rest of it but when you
look at their policies and what they are trying to do, the question does arise. Are they doing
it because this is what they believe is their identity as a party or is it that they are simply
a vehicle with the billionaires doing the real driving and recruiting? An obvious point is that
among billionaires, they see no need to form their own political party which should be telling
clue. Certainly the Democrats are no better.
Maybe the question that American should ask themselves is just what does it mean to be an
American in the year 2020? People like Norman Rockwell and his Four Freedoms could have said a
lot of what it meant some 60 years ago and his work has been updated to reflect the modern era
( https://www.galeriemagazine.com/norman-rockwell-four-freedoms-modern/
) but the long and the short of it is that things are no longer working for most people anymore
-- and not just in America. But a powerful spring can only be pushed back and held in place for
so long before there is a rebound effect and I believe that I am seeing signs of this the past
few years.
" a second Bill of Rights under which a new basis of security and prosperity can be
established for all -- regardless of station, race, or creed.
Among these are:
The right to a useful and remunerative job in the industries or shops or farms or mines of
the nation;
The right to earn enough to provide adequate food and clothing and recreation;
The right of every farmer to raise and sell his products at a return which will give him and
his family a decent living;
The right of every businessman, large and small, to trade in an atmosphere of freedom from
unfair competition and domination by monopolies at home or abroad;
The right of every family to a decent home;
The right to adequate medical care and the opportunity to achieve and enjoy good health;
The right to adequate protection from the economic fears of old age, sickness, accident, and
unemployment;
The right to a good education.
All of these rights spell security."
America is having a heated debate about the meaning of the word socialism. We'd be better
served if, instead, we were debating the meaning of freedom.
I agree, and we should also be having a debate about capitalism as it actually exists. In
the US capitalism is always talked about in rosy non-specific terms (e.g. a preference for
markets or support for entrepreneurship) while anybody who says they don't necessarily support
capitalism has to answer for Stalin's gulag's or the Khmer Rouge. All the inequalities and
injustices that have helped people like Howard Schultz or Jeff Bezos become billionaire
capitalists somehow aren't part of capitalism, just different problems to be solved somehow but
definitely not by questioning capitalism.
Last night I watched the HBO documentary on Elizabeth Holmes and Theranos and I couldn't
help but laugh at all these powerful politicians, investors, and legal giants going along with
someone who never once demonstrated or even explained how her groundbreaking innovation
actually worked. $900 million was poured into that company before people realized something
that a Stanford professor interviewed in the documentary saw when she first met Holmes.
Fracking companies have been able to consistently raise funding despite consistently losing
money and destroying the environment in the process. Bank balance sheets were protected while
working people lost everything in the name of preserving American capitalism. I think it's good
to debate socialism and capitalism, but there's not really any point if we aren't going to be
talking about Actually Existing Capitalism rather than the hypothetical version that's trotted
out anytime someone suggests an alternative.
There was a great comment here on NC a little while ago, something to the effect of
"capitalism has the logic of a cancer cell. It's a pile of money whose only goal is to become a
bigger pile of money." Of course good things can happen as a side effect of it becoming a
bigger pile of money: innovation, efficiencies, improved standard of living, etc. but we need
government (not industry) regulation to keep the bad side effects of capitalism in check (like
the cancer eventually killing its host).
Shoot, must have missed that comment but it's a good metaphor. Reminds me of Capital vol. 1,
which Marx starts with a long and dense treatment of the nature of commodities and
commodification in order to capture this process whereby capitalists produce things people
really do want or need in order to get at what they really want: return on their
investment.
I also agree but I think we need to have a the same heated debate over what capitalism
means. Over the years I have been subjected to (exposed) to more flavors of socialism than I
can count. Yet, other than an introductory economics class way back when, no debatable words
about what 'capitalism' is seems to get attention. Maybe it's time to do that and hope that
some agreeable definition of 'freedom' falls out.
of course maybe socialism is the only thing that ever really could solve homelessness, given
that it seems to be at this point a worldwide problem, although better some places than others
(like the U.S. and UK).
This article lets the Dems off the hook. They have actively supported the Billionaire
Agenda for decades now; sometimes actively (like when they helped gut welfare) and sometimes by
enabling Repubs objectives (like voter suppression).
At this point in time, the Dem leadership is working to deep six Medicare for All.
With 'friends' like the Dems, who needs the Repubs?
1) In the history, a mention of the attempted coup against FDR would be good. See The
Plot to Seize the White House by Jules Archer. ( Amazon link )
2) For the contemporary intellectual history, I really appreciated Nancy MacLean's
Democracy in Chains . ( Amazon
link ) Look her up on youtube or Democracy Now . Her book got a bit of press and she
interviews well.
This post seems heavily slanted against the GOP and does not take into account how
pro-business the Democrats have become. I tenuously agree with Yves intro that much of the
current pro business value system campaign in the US was started with the political far right
and the Lewis Powell Memo. And that campaign kicked into high gear during the Reagan
Presidency.
But as that "pro business campaign" gained steam, the Democratic Party, IMO, realized that
they could partake in the "riches" as well and sold their political soul for a piece of the
action. Hartman's quote about the billionaire class should include their "wholly owned
Republicans and Democrat politicians".
As Lambert mentions (paraphrasing), "The left puts the working class first. Both liberals
and conservatives put markets first, liberals with many more layers of indirection (e.g.,
complex eligibility requirements, credentialing) because that creates niches from which their
professional base benefits".
As an aside, while the pro-business/capitalism on steroids people have sought more
"freedom", they have made the US and the world less free for the rest of us.
Also the over focusing on freedom is not uniquely GOP. As Hartman mentions, "the words
freedom and liberty are iconic in American culture -- probably more so than with any other
nation because they're so intrinsic to the literature, declarations and slogans of our nation's
founding." US culture has taken the concept of freedom to an extreme version of
individualism.
That is not surprising given our history.
The DRD4 gene is a dopamine receptor gene. One stretch of the gene is repeated a variable
number of times, and the version with seven repeats (the "7R" form) produces a receptor protein
that is relatively unresponsive to dopamine. Being unresponsive to dopamine means that people
who have this gene have a host of related traits -- sensation and novelty seeking, risk taking,
impulsivity, and, probably most consistently, ADHD. -- -- Seems like the type of people that
would value extreme (i.e. non-collective) forms of freedom
The United States is the individualism poster child for at least two reasons. First
there's immigration. Currently, 12 percent of Americans are immigrants, another 12 percent are
children of immigrants, and everyone else except for the 0.9 percent pure Native Americans
descend from people who emigrated within the last five hundred years.
And who were the immigrants?' Those in the settled world who were cranks, malcontents,
restless, heretical, black sheep, hyperactive, hypomanic, misanthropic, itchy, unconventional,
yearning to be free, yearning to be rich, yearning to be out of their, damn boring repressive
little hamlet, yearning. -- -- Again seems like the type of people that would value freedom in
all aspects of life and not be interested in collectivism
Couple that with the second reason -- for the majority of its colonial and independent
history, America has had a moving frontier luring those whose extreme prickly optimism made
merely booking passage to the New World insufficiently, novel -- and you've got America the
individualistic.
The 7R variant mentioned above occurs in about 23 percent of Europeans and European
Americans. And in East Asians? 1 percent. When East Asians domesticated rice and invented
collectivist society, there was massive selection against the 7R variant. Regardless of the
cause, East Asian cultural collectivism coevolved with selection against the 7R variant.
So which came first, 7R frequency or cultural style? The 4R and 7R variants, along with the
2R, occur worldwide, implying they already existed when humans radiated out of Africa 60,000 to
130,000 years ago. A high incidence of 7R, associated with impulsivity and novelty seeking, is
the legacy of humans who made the greatest migrations in human history.
So it seems that many of the people who immigrated to the US were impulsive, novelty
seeking, risk takers. As a counterpoint, many people that migrated to the US did not do so by
choice but were forced from their homes and their countries by wars.
The point of this long comment is that for some people the concept of freedom can be taken
to extreme -- a lack of gun control laws, financial regulation, extremes of wealth, etc. After
a brief period in the 1940's, 1950's, and early 1960's when the US was more collective, we
became greedy, consumerist, and consumption oriented, aided by the political and business
elites as mentioned in the post.
If we want the US to be a more collective society we have to initially do so in our
behaviors i.e. laws and regulations that rein in the people who would take the concept of
freedom to an extreme. Then maybe over an evolutionary time period some of the move impulsive,
sensation seeking, ADHDness, genes can be altered to a more balance mix of what makes the US
great with more of the collective genes.
IMO, if we do not begin to work on becoming a collective culture now, then climate change,
water scarcity, food scarcity, and resource scarcity will do it for us the hard way.
In these days of short attention spans I apologize for the long comment. The rest of my day
is busy and I do not have more time to shorten the comment. I wanted to develop an argument for
how the evolutionary and dysfunctional forms of freedom have gotten us to this point. And what
we need to do to still have some freedom but also "play nice and share in the future sandbox of
climate change and post fossil fuel society.
"Monopoly" is such an ugly term. We prefer to call it "market power" these days, because of
course it's a good thing if the job creators and their enterprises have more power to do all
the good things they do for us.
It's clearly class warfare, if not racism, to use the term of abuse, "monopoly", when you
mean "market power".
Empire disintegrated because of natural tendency to over-expand. This tendency is almost
impossible for elite to resist, especially neoliberal elite as among them there is a growing and
more and influential strata of "imperial servants".
The collapse of the US empire is intrinsically linked to the collapse of neoliberalism.
The USA has now increasingly dysfunctional political system incapable of wise foreign policy.
The current generation of US political leaders are all poisoned by the dream of ruling the globe
which was a real possibility after the collapse of the USSR and which they were unable to resist.
Iraq, Libya, Afghanistan and Venezuela in different way way demonstrated the the US empire tend
to commit costly blunders. First of all engaging the empire in unwinnable wars with unexpected
blowbacks.
Notable quotes:
"... Professor Richard Wolff reveals the unexpected truth about imperialism on the Thom Hartmann program! ..."
Two hundred years after the birth of Karl Marx and fifty years after the last Western
upsurge of revolutionary ferment in 1968, the term "monopoly capitalism" might seem like a
relic of outmoded enthusiasms. But economists are increasingly coming to the view that
monopolies, and associated market failures, have never been a bigger problem.
and the conclusion
The problems of monopoly and inequality may seem so large as to defy any response. But we
faced similar problems when capitalism first emerged, and Western countries came up with the
responses that created the broad-based prosperity of the mid twentieth century. The internet,
in particular, has the potential to enhance freedom and equality rather than facilitate
corporate exploitation. The missing ingredient, so far, has been the political will.
"Monopoly" is such an ugly term. We prefer to call it "market power" these days, because of
course it's a good thing if the job creators and their enterprises have more power to do all
the good things they do for us. It's clearly class warfare, if not racism, to use the term of
abuse, "monopoly", when you mean "market power".
Of all the examples to choose, airlines would seem to be a bad one. They come and go with
rapidity, and airlines are now being used as an example of how to reform banks.
Running the modern air industry needs lots of infrastructure and lots of regulations, so
would seem to be an obvious place to have monopoly airlines. The critical thing that has
happened has been the splitting of the infrastructure from the market-facing entities. So the
booking systems, airport handling, and other services are all done by firms who don't
directly face the paying customer. Pretty much anyone can set up an airline, and they
can become quite
big
Banking regulation is going in the direction of the airline industry. The idea being to
split up the major systems and financial risk repositories from the market-facing companies.
Hence, again, anyone can set up a bank.
One significant issue behind the growth in monopolies is regulation. The debate in the UK
over the EU has included much discussion of regulation, much of it from a Remain/pro EU angle
being that more regulation is a costless good. But there is an obvious and well-known cost,
that regulation acts as a barrier to new entrants, and hence destroys innovation and creates
conditions for monopolies, cartels, and oligopolies. It is surely no coincidence that the EU,
an organisation that cannot look at any object without trying to regulate it, is sliding into
recession and has effectively zero productivity increase this century. If you regulate what
you have now, you just make the status quo your future. In the end, you just end up like the
CBI, reduced to demanding
more and more cheap labour to fuel your dinosaur members' wishes for more profit.
So. Split the resource-heavy stuff from the market-facing stuff, and try to avoid
regulating your economy into a coma.
A significant fraction of the population can't keep track of their actual cost structures
and will, cheerful and unknowing, sell at a loss. Unless you can exclude them from the market
-- unless you have some mechanism for excluding people from the market -- the clearing price
will be below the cost price: no market that does not have exclusion mechanisms can possibly
be profitable.
That is to say: a profitable sector of industry requires exclusion mechanisms and all
profit relies on rent .
The question we have to ask is, then: how do we distribute rent opportunities? We used to
be able to use transport costs to create rent "naturally", but we can't do that any more: at
least with monopoly some things still get made and some people still make
money.
[honestly? I think uniform tariff barriers coupled with socialism [or
socialism-approximating structures like dirigisme among firms with
effectively-universally-held shares] are the only real solution.]
Um. "Monopoly" triggers thoughts of a scotty dog and a flat iron. Regarding the minimum wage,
I'm encouraged to see oligopsony mentioned, not just because I love rare words; it's only
recently than in such discussions the more common word "monopsony" was used. But how else to
explain how Walmart greeters and burger flippers, despite their disparate productivity and
different employers, are paid the same meager wage?
It says something about our common discourse, by which I mean American politics, that
people preach as though market power was as unimaginable as ethical conduct, the first of
which is tacitly assumed and the second generally acknowledged as nonexistent.
@Dipper I'm sure you'll sympathize when I observe that Australia is different from other
places (a point you've often made about Britain), at least with respect to airlines.
We've only had one successful entry on a substantial scale in the history of commercial
aviation (when Virgin Blue displaced Ansett in 2001). Against that, there has been a long
string of failed attempts to break up the duopoly (now consisting of two full-service
airlines each with a low-cost subsidiary).
So, in an Australian publication, airlines are on obvious example.
You argue that what has been missing is political will, but at the same time you acknowledge
that new versions of the old solutions for these problems must be found. I would focus more
on the latter than the former. Yes, the EU is creating stronger privacy protection now, but
one of the main impacts will be to strengthen existing large players. Do we really want to
move to a regulated monopoly model so quickly? These new markets have been evolving rapidly
over the past 15 years and models of the internet economy that made sense even 10 years ago
are now out-dated. I think we still need to figure out what people need out of these new
provided services and how to get there. It seems a lot harder than simply breaking up the
producers and distributers of basic commodities.
And here i was thinking Dipper would try to make his weak case with the strongest arguments-
Ryanair or Easyjet*. Virgin Atlantic, really? While airlines in Europe are probably not the
most obvious easy to comprehend example for monopoly or oligopoly one could pick, those terms
are still quite accurate as a description of the current situation in most submarkets.
*The crux with those two is that there are and were a gazillion other discount carriers,
but non of those are sucesfull, Ryanair in particular in contrast produces an insane return
on equity.
Have you read 'Game of Mates' about cronyism among the elite in Australia ? Kind of
interesting and eye opening(at least for an outsider like me) Might be of interest if you
havent.
"Corporations must be in the service of the nation, not the other way around." Bingo! As
long as corporations have the constitutional rights of "persons," they will continue to
pummel those of us for whom constitutional rights were intended. Please urge your congress
critter to sign on to cosponsor the We the People Amendment and implore your senators to
introduce companion legislation in the U.S. Senate:
Note: Tulsi Gabbard and Ilhan Omar are original co-sponsors in the 116th Congress, but not
yet AOC, so if anyone from her district is reading, give her office a call !
P.S. For those of you who had concerns about it, a section 3 has been added to the
original resolution: "Nothing contained in this amendment shall be construed to abridge the
freedom of the press."
Strictly speaking, this was unnecessary: the press has, and has always had, its first
amendment rights BECAUSE it is the PRESS, not because of its corporate form. But people's
inability to make that distinction caused so much angst that the sentence, redundant as it
is, was added to the proposed amendment.
HealthcareHot TopicsPoliticsUS/Global Economics Brad DeLong got
a huge amount of attention by saying it was time for neoliberals such as Brad DeLong to pass
the baton to those to their left. Alarmingly, he seems to have written this first on twitter.
Zach Beuchamp rescued it from tawdry twitter to now very respectable blogosphere with
an interview.
One interesting aspect is that Brad has very little criticism of 90s era Brad's policy
proposals. Basically, the argument is that Democrats must stick together, because Republicans
are purely partisan and no compromise with them is possible. I absolutely agree with Brad on
this.
But I also want to look at criticisms of Clinton/Obama center left policy as policy.
Brad tries to come up with 2 examples
I could be confident in 2005 that [recession] stabilization should be the responsibility
of the Federal Reserve. That you look at something like laser-eye surgery or rapid
technological progress in hearing aids, you can kind of think that keeping a market in the
most innovative parts of health care would be a good thing. So something like an
insurance-plus-exchange system would be a good thing to have in America as a whole.
It's much harder to believe in those things now. That's one part of it. The world appears
to be more like what lefties thought it was than what I thought it was for the last 10 or 15
years.
Now monetary vs fiscal policy is only considered right vs left because of the prominence and
fanaticism of Milton Friedman. Is see no connection between laser eye surgery, hearing aids,
and private health insurance. Medicare for all is not a National Health Service (note I am not
conceding that a national health service would be bad for medical innovation). Brad did not
advocate insurance/plus/exchange system in 1993. He (and Bentson, Summers and Rubin) advocated
a payroll tax financed system not the Clinton-Clinton and Magaziner mess. I think he is
stretching to get a second example.
I think the first isn't really left vs right and the second is and always was a bad
political calculation. IIRC Obama certainly said that he thought single payer was better policy
but politically impossible. That was the general line on the center left wonkosphere. I think
the case for insurance-plus-exchange was at most a bad political argument disguised as a bad
policy argument.
In another twitter thread (no not the one where he says twitter is a horrible medium for
serious discussion) Paul Krugman comments
I want to focus on two of his tweets
Last point: wages. Here's where research has convinced me and others that wages are much
less determined by supply and demand, much more determined by market power, than we used to
believe. This implies a much bigger role for "predistribution" policies like minimum wage
hikes 10/
Pro-union policies, and more than we used to think. "Let the market do its thing, but
spend more on education/training and a bigger EITC" no longer sounds like wisdom 11/
I listed this as the one economist's mea culpa based on empirical evidence which came to my
mind. A lot of center left economists used to oppose minimum wage increases and were convinced
by empirical evidence (mostly by Card and Krueger) that this is actually good policy. But I
don't see any problem with the EITC. Rather, economics 101 based arguments against the minimum
wage and unions have been undermined by evidence*.
I think Krugman's problem with "a bigger EITC" is political. It appears on the Federal
budget so deficit hawks won't allow a really huge increase. In contrast, people can think firms
pay the minimum wage, so increasing it sounds like a cheap way to help the working poor.
More generally, I don't see any reason to abandone redistribution (like the EITC). In fact,
I think that is both excellent policy and political dynamite. I note that Bill Clinton and
Barack Obama campaigned promising to raise taxes on the rich and cut taxes on everyone else.
Also they won. Other Democrats didn't promise that and they lost. A more progressive income tax
is a relatively market respecting policy long supported by left of center economists. Oh and
also Alexandria Ocasio Cortez. I don't think there is any evidence against the Clinton 1993 tax
increase combined with EITC increase.
The fact that it is totally obvious that it is good politics (rejected absolutely by the
Republican party and supported by most self identified Republicans) doesn't mean that it is too
obvious to stress. It means debating redistribution vs predistribution is a distraction
(which
one here is not like the others) ?
I personally have criticisms of Bill Clinton type neoliberalism after the jump
OK so what can I add ?
I could bring up a really bad Clinton administration policy proposal based on neoliberalism:
financial deregulation, and, in particular, Clinton's last act signing the commodity futures
modernization act. This was absolutely policy based on pro free market beliefs of people who
cared about fighting poverty (Rubin himself was a relative skeptic compared to other people and
the Clinton Treasury whom I will not name and criticize).
I won't discuss welfare reform or the Clinton crime bill. Both were opposed by the center
left wonks. That was politics not policy.
But there was strong support among neoliberal wonks for reinventing government, that is for
outsourcing and replacing public provision of services with vouchers. There clearly was a
strong view that the private sector is more efficient than the public sector. There was I think
sincere support for reducing the number of Federal employees.
I think there is now strong evidence that the public sector is often more efficient than the
private sector. Part of the case was politics disguised as policy. Voters hate the bloated
Federal Bureacuracy (based on total fantasy about its size and cost). There is a theoretical
argument that civil servants don't work because it is very hard to fire them. In fact, they do
work. This is a failure of vulgar economics 101 in which people are assumed to care only about
consumption and leisure.
In contrast there are huge problems with contracting out to private firms. The incentives
civil servants face is enough to overcome the laziness of people less lazy than me (almost
everyone) but it is nothing compared to the incentives private contractors have to take
advantage of the government. What I always say is that a large state is costly, but the cost
depends on the surface area -- it is very costly for the state for modestly paid civil servants
negotiate with businessmen and highly paid private managers (before going out the revolving
door). Reinventing government makes it more costly. The key example is not a Clinton reform
(although Clinton reluctantly signed the bill) Medicare Advantage was supposed to cause
Medicare to wither on the vine because the Centers for Medicare and Medicaid Services (CMS)
couldn't compete with private insurance. By 2010 defenders of private insurance (crucially
including Joe Lieberman) were absolutely determined to prevent the CMS from competing with
private insurance, because they knew private insurance companies couldn't survive the
competition.
Also school vouchers have been shown to have large negative
effects on achievement.
I'd say considerable evidence of positive long term effects of welfare programs has
accumulated. The assumption based on economimics 101 that welfare reduces pre-transfer income
by distorting incentives has not fared so well. The evidence tends to suggest direct benefits.
I promised not to discuss this one, because I am sure that welfare reform was based on
political calculations not bad policy analysis (it was not a policy of the Rubin wing of the
party -- Rubin advised Clinton to veto the bill).
Now on another topic. How about winning elections. Isn't that important too ?
In the interview, Brad discusses policy and parliamentary (in the USA Congressional)
politics. He could also argue about electoral politics and say Democrats have to move left to
win elections. In any case I will argue that.
Brad's argument is distantly related to the mobilize the base vs capture the center
political strategies. He doesn't stress this in the twitter thread or the interview, but he
could discuss voters and how few genuinely indpendent voters there are. Like me, he can vividly
recall the 80s when lots of smart Democrats (and also Robert Waldmann) argued that the party
had to move rightward to recapture the center. I recall reading something by Robert Kuttner
about what the party needed was left populism and this was blocked by the power of money in the
Democratic party (think Bernie Sanders back when Sanders was mayor of Burlington). When I first
read that, I thought it was crazy. Now I think it is totally right. Also note that, by
promoting the internet, Al Gore saved the party from centrists like Al Gore. Now candidates and
candidate-candidates can raise huge amounts of money with small donations and don't have to get
along with and flatter rich people. Obama proved this 8 years before Sanders proved it
again.
There are fewer swing voters and much less ticket splitting than their used to be. This
means that elections are determined mainly by whether young people vote. Sneering and
Alexandria Ocasio Cortez is not good political strategy (also unwise unless one is a smart as
she is and few people are).
* I have to say what I think of unions there was a liberaltarian argument that unions help
insiders and create inequality (and support racial segregation). Also it was argued that unions
prevented productivity growth by featherbeading and generally being rigid. These claims were
never supported by evidence (empirically oriented labor economists like Richard Friedman always
contested them}. In any case, the extreme decline of unions in the USA provides strong evidence
that unions weren't the problem. They declined at the same time that there was a huge increase
in inequality (there has also been an increase in racial wage differentials). Also their
decline correlated with a marked decline in the rate of productivity growth. This is crude
evidence, but detailed evidence long contradicted the case against unions. I think part of the
shift is new evidence and part of the shift is more respect for evidence vs theory among
economists. On the other hand, it's a whole lot easier to raise taxes on the rich and cut taxes
on the non rich than to bring unions back.
"... Making matters worse, America's low tax-to-GDP ratio – just 27.1% even before the Trump tax cut – means a dearth of money for investment in the infrastructure, education, health care, and basic research needed to ensure future growth. These are the supply-side measures that actually do "trickle down" to everyone. ..."
"... The policies for combating economically damaging power imbalances are straightforward. Over the past half-century, Chicago School economists , acting on the assumption that markets are generally competitive, narrowed the focus of competition policy solely to economic efficiency, rather than broader concerns about power and inequality. The irony is that this assumption became dominant in policymaking circles just when economists were beginning to reveal its flaws. The development of game theory and new models of imperfect and asymmetric information laid bare the profound limitations of the competition model. ..."
"... The law needs to catch up. Anti-competitive practices should be illegal, period. And beyond that, there are a host of other changes needed to modernize US antitrust legislation. Americans' need the same resolve in fighting for competition that their corporations have shown in fighting against it. ..."
Rising inequality and slow growth are widely recognized as key factors behind the spread of public discontent in advanced economies,
particularly in the United States. But these problems are themselves symptoms of an underlying malady that the US political system
may be unable to address.
The world's advanced economies are suffering from a number of deep-seated problems. In the United States, in particular,
inequality is at its highest since 1928 ,
and GDP growth remains woefully tepid compared to the decades after World War II.
After
promising
annual growth of "4, 5, and even 6%," US President Donald Trump and his congressional Republican enablers have delivered only
unprecedented deficits. According to the Congressional Budget Office's
latest projections , the federal budget deficit will reach $900
billion this year, and will surpass the $1 trillion mark every year after 2021. And yet, the sugar high induced by the latest deficit
increase is already fading, with the International Monetary Fund
forecasting US growth
of 2.5% in 2019 and 1.8% in 2020, down from
2.9% in 2018.
Many factors are contributing to the US economy's low-growth/high-inequality problem. Trump and the Republicans' poorly designed
tax "reform" has exacerbated existing deficiencies in the tax code, funneling even more income to the highest earners. At the same
time, globalization continues to be poorly managed, and financial markets continue to be geared toward extracting profits (rent-seeking,
in economists' parlance), rather than providing useful services.
But an even deeper and more fundamental problem is the growing
concentration of market power , which allows dominant firms to exploit their customers and squeeze their employees, whose own
bargaining power and legal protections
are being weakened . CEOs and senior executives are increasingly extracting higher pay for themselves at the expense of workers
and investment.
For example, US corporate executives made sure that the vast majority of the benefits from the tax cut went into dividends and
stock buybacks, which exceeded a record-breaking
$1.1 trillion in 2018 . Buybacks raised share prices and boosted the earnings-per-share ratio, on which many executives' compensation
is based. Meanwhile, at 13.7% of GDP , annual investment
remained weak, while many corporate pensions went underfunded.
Evidence of rising market power can be found almost anywhere one looks. Large markups are contributing to high
corporate profits . In sector after sector,
from little things like cat food to big things like telecoms, cable providers, airlines, and technology platforms, a few firms now
dominate 75-90% of the market, if not more; and
the problem is even more pronounced at the level of local markets.
As corporate behemoths' market power has increased, so, too, has their ability to influence America's money-driven politics. And
as the system has become more rigged in business's favor, it has become much harder for ordinary citizens to seek redress for mistreatment
or abuse. A perfect example of this is the spread of arbitration clauses in labor contracts and user agreements, which allow corporations
to settle disputes with employees and customers through a sympathetic mediator, rather than in court.
Multiple forces are driving the increase in market power. One is the growth of sectors with large network effects, where a single
firm – like Google or Facebook – can easily dominate. Another is the prevailing attitude among business leaders, who have come to
assume that market power is the only way to ensure durable profits. As the venture capitalist Peter Thiel famously
put it , "competition
is for losers."
Some US business leaders have shown real ingenuity in creating market barriers to prevent any kind of meaningful competition,
aided by lax enforcement of existing competition laws and the failure to update those laws for the twenty-first-century economy.
As a result, the share of
new firms in the US is declining.
None of this bodes well for the US economy. Rising inequality implies falling aggregate demand, because those at the top of the
wealth distribution tend to consume a smaller share of their income than those of more modest means.
Moreover, on the supply side, market power weakens incentives to invest and innovate. Firms know that if they produce more, they
will have to lower their prices. This is why investment remains weak, despite corporate America's record profits and trillions of
dollars of cash reserves. And besides, why bother producing anything of value when you can use your political power to extract more
rents through market exploitation? Political investments in getting lower taxes yield far higher returns than real investments in
plant and equipment.
1
Making matters worse, America's low tax-to-GDP ratio – just
27.1% even before the Trump tax cut –
means a dearth of money for investment in the infrastructure, education, health care, and basic research needed to ensure future
growth. These are the supply-side measures that actually do "trickle down" to everyone.
The policies for combating economically damaging power imbalances are straightforward. Over the past half-century,
Chicago School economists , acting on the assumption that markets are generally competitive, narrowed the focus of competition
policy solely to economic efficiency, rather than broader concerns about power and inequality. The irony is that this assumption
became dominant in policymaking circles just when economists were beginning to reveal its flaws. The development of game theory and
new models of imperfect and asymmetric information laid bare the profound limitations of the competition model.
The law needs to catch up. Anti-competitive practices should be illegal, period. And beyond that, there are a host of other changes
needed to modernize US antitrust legislation. Americans' need the same resolve in fighting for competition that their corporations
have shown in fighting against it.
The challenge, as always, is political. But with US corporations having amassed so much power, there is reason to doubt that the
American political system is up to the task of reform. Add to that the globalization of corporate power and the orgy of deregulation
and crony capitalism under Trump, and it is clear that Europe will have to take the lead.
"... Yes, Minister was a neoliberal attack on government as such. It set the "entrepreneurial" political hero/leader against the corrupt "civil service". ..."
"... Following this line of reasoning, it seems to me that the US military establishment has been in decline ever since the Pentagon was built and the temporary Navy Dept. buildings erected on the National Mall were razed ..."
"... Being that the Pentagon opened in 1943 and the buildings on the Mall were razed in 1970, which roughly coincides with our costly imperial adventures in Korea and Vietnam, I think Parkinson's Law #6 is dead on here. ..."
Years ago, while working in an Australian state public service department, we considered 'Yes Minister' to be a documentary,
and used it amongst ourselves as training material.
Yes, Minister was a neoliberal attack on government as such. It set the "entrepreneurial" political hero/leader against the
corrupt "civil service". It made the latter the "deep state", thereby tainting forever the welfare state as an evil hidden conspiracy
that (mysteriously) pandered to the meritocratically worthless. If that is what you mean by "Deep State" then you can have it.
It is now known that a perfection of planned layout is achieved only by institutions on the point of collapse . [P]erfection
of planning is a symptom of decay. During a period of exciting discovery or progress there is no time to plan the perfect headquarters.
The time for that comes later, when all the important work has been done. Perfection, we know, is finality; and finality is
death.
Following this line of reasoning, it seems to me that the US military establishment has been in decline ever since the Pentagon
was built and the temporary Navy Dept. buildings erected on the National Mall were razed.
Being that the Pentagon opened in 1943
and the buildings on the Mall were razed in 1970, which roughly coincides with our costly imperial adventures in Korea and Vietnam,
I think Parkinson's Law #6 is dead on here.
That's what neoliberal bottomfeeders like Summers, Krugman and Dejong should read and
memorize
Notable quotes:
"... Neoclassical economics became important in large measure to show that markets delivered efficient outcomes, and efficiency was seen as tantamount to socially desirable. That's before considering that highly efficiency almost always comes at the expense of safety and robustness, and that efficient solutions may not be equitable. ..."
"... So, maybe the proper distinction to be made is between "trustworthy" experts and "untrustworthy" ones. The question then become what makes experts trustworthy -- not, I should stress, intrinsically trustworthy, but rather perceived by the public to be so. ..."
"... The third point is that trust in expertise seems to be quite generally declining. This is partly perhaps because education is more widespread, which makes possession of an education appear in itself less authoritative. It is also partly because of the rapid dissemination of information. It is partly because of the easy formation of groups of the disaffected and dissemination of conspiracy theories. The internet and the new social media it has spawned have turned out to be powerful engines for the spreading of disinformation aimed at manipulation of the unwary. ..."
Yves
here. Even though Martin Wolf's post makes many important observations, I feel the need to take
issue with his conclusion. Economists have been and continue to be enormously successful as
experts. PhDs in economics make roughly twice as much as those in other social sciences.
Economists are the only social scientists to have a seat at the policy table. And they continue
to do so, despite their colossal failure in the global financial crisis, with no serious change
in the discipline and no loss of reputation of any prominent economists.
Neoclassical economics became important in large measure to show that markets delivered
efficient outcomes, and efficiency was seen as tantamount to socially desirable. That's before
considering that highly efficiency almost always comes at the expense of safety and robustness,
and that efficient solutions may not be equitable.
The importance of economists as policy advisers grew in the post World War II era, after the
USSR managed the impressive feat of industrializing in the 20th century. US officials were
concerned that a command and control economy could beat a messy, consumer oriented capitalist
one, and turned to economists to give guidance on how to achieve high growth rates so as to
produce enough guns and butter.
As for the specific impetus for Wolf's article, it appears to be due to voters ignoring the
dire warnings made by the Remain campaign during the Brexit referendum campaign that Brexit
would have large economic costs. But based on reports after the vote came in, that repudiation
came not just because the public might well have good reason not to believe economists as a
result of the crisis, but how the Remain campaign carried itself in the debates. That side
apparently made arrogant-seeming, data heavy arguments, while the Leavers made stirring appeals
about sovereignty .a UK version of MAGA.
"I think people in this country have had enough of experts."
-Michael Gove
Michael Gove, winner of the Brexit referendum (though loser in the game of politics, having
failed to become leader of his party, and so, maybe, no true expert either) hit the nail on the
head. The people of this country have, it seems, had enough of those who consider themselves
experts, in some domains. The implications of this rejection of experts seem enormous. That
should be of particular significance for economists, because economists were, after all, the
"experts" against whom Mr. Gove was inveighing.
Yet it is not really true that the people of this country have had enough of experts. When
they fall ill, they still go to licensed doctors. When they fly, they trust qualified pilots.
When they want a bridge, they call upon qualified engineers. Even today, in the supposed
"post-fact" world, such people are almost universally recognized as experts.
So, maybe the proper distinction to be made is between "trustworthy" experts and
"untrustworthy" ones. The question then become what makes experts trustworthy -- not, I should
stress, intrinsically trustworthy, but rather perceived by the public to be so.
One might make three, admittedly speculative, points about this distinction between experts
deemed by the public to be deserving of trust and those who are not.
The first is that some forms of expertise appear simply to be more solidly based than others
in a body of theory and/or evidence, with recognizable successes to their credit. By and large,
doctors are associated with cures, pilots with keeping airplanes in the sky and engineers with
bridges that stay up. Such successes -- and there are many other comparable fields of expertise
-- self-evidently make people with the relevant expertise appear trustworthy.
The second is that some forms of expertise are more politically contentious than others.
Nearly everybody, for example, agrees that curing people, flying airplanes and building bridges
are good things. Social and political arrangements -- and economics is inescapably about social
and political arrangements -- are always and everywhere contentious. They affect not only how
people think the human world works, but also how it ought to work. These forms of expertise are
about values.
The third point is that trust in expertise seems to be quite generally declining. This is
partly perhaps because education is more widespread, which makes possession of an education
appear in itself less authoritative. It is also partly because of the rapid dissemination of
information. It is partly because of the easy formation of groups of the disaffected and
dissemination of conspiracy theories. The internet and the new social media it has spawned have
turned out to be powerful engines for the spreading of disinformation aimed at manipulation of
the unwary.
It might be encouraging for economists that they are not the only experts who are
mistrusted. Consider the anti-vaccination movement, hostility to evolutionary theory, or
rejection of climate science. All these are the products of doubts fueled by a combination of
core beliefs and suspicion of particular forms of expertise. The anti-vaccination movement is
driven by parents' concerns about their children. The hostility to evolution is driven by
religion. The rejection of climate science is clearly driven by ideology. Every climate denier
I know is a free marketeer. Is this an accident? No. The desire to believe in the free market
creates an emotional justification for denying climate science. In principle, after all, belief
in free markets and in the physics of the climate system have absolutely nothing to do with
each other.
So economists are in good company with other forms of politically or socially contentious
expertise. But they have a special difficulty. Not only are they engaged in an essentially
controversial, because political, arena, and so also an inherently ideological one, but they
suffer to a high degree from the first point I made above: their "science", if science it is,
just does not look to the public to be solidly based. It does not work as well as the public
wants and economists have claimed. Economists claim a certain scientific status. But much of it
looks to the outsider more like "scientism" -- the use of an incomprehensible intellectual
apparatus to obscure ignorance rather than reveal truth.
This does not mean that economists don't know useful things. It is quite clear that they do.
Markets are extraordinary institutions, for example. Economists' elucidation of markets or of
the principle of comparative advantage is a great intellectual achievement. Yet suspicion of
economics and economists is both long-standing and understandable.
The problem became far more serious after the financial crisis. The popular perception is
that the experts -- macroeconomists and financial economists -- did not appreciate the dangers
before the event and did not understand the longer-run consequences after it. Moreover, the
popular perception seems to be in large part correct. This has damaged the acceptance of the
expertise of economists to a huge extent.
So how, in this suspicious contemporary environment, might economists persuade the public
they are experts who deserve to be listened to?
I decided to ask my colleagues this question. One answered that:
1. Good economists have a clear (if incomplete) understanding of how the world works. This
is a pre-requisite to making it a better place.
2. Economists have a sense of scale. They understand the difference between big and small
and how to make that distinction. This is vital for policy.
3. Economics is all about counterfactuals. It understands the relevant comparators even if
they are difficult to work out.
4. Economists are experts on incentives and motivations and empirically try to measure
them rather than relying on wishful thinking.
5. Generally, good economists are expert in understanding the limits of their knowledge
and forecasting abilities.
Another colleague added:
The general public usually associate economists with:
-A small set of macroeconomic forecasts (growth, inflation mainly), and
-A belief that markets always produce perfect outcomes
And they attribute failure to them if either:
-point forecasts (inevitably) prove wrong, or
-markets produce some bad outcomes
Whereas the expertise of economists is really in the building blocks that enable you to
construct sensible forecasts and to understand how people are likely to behave and respond to
a given set of circumstances/policies. This structure for understanding the world allows
economists to take on board new developments, understand whether they reflect a rejection of
their existing theories or merely a (possibly tail) outcome that was consistent with their
"model," and push forward their understanding of the world from there. Rather than throwing
away all existing wisdom when circumstances change somewhat.
I agree with these propositions. Properly understood, economics remains very useful. One
realizes this as soon as one is engaged with someone who knows nothing at all about the
subject. But I still have four qualifications to make.
First, a large part of what economists actually do, namely forecasting, is not very soundly
based. It would be a good idea if economists stated that loudly, strongly, and repeatedly.
Indeed, there should be ceaseless public campaigning by the professional bodies, emphasizing
what economists don't know. Of course, that would not -- as economists might predict -- be in
their interests.
Second, in important areas of supposed economic expertise, the analytical basis is really
weak. This is true of the operation of the monetary and financial systems. It is also true of
the determinants of economic growth.
Third, economists are not disinterested outsiders. They are part of the political process.
It is crucial to remember that certain propositions favor the interests of powerful people and
groups. Economists can find themselves easily captured by such groups. "Invisible hand"
theorems are particularly open to such abuse.
Finally, the division between economic aspects of society and the rest is, in my view,
analytically unsound. The relationship between, say, economics and sociology or anthropology is
not like that between physics and chemistry. The latter rests upon the former. But economics
and anthropology lie side by side. I increasingly feel that the educated economist, certainly
those engaged in policy, must also understand political science, sociology, anthropology, and
sociology. Otherwise, they will fail to understand what is actually happening.
If I am right, the challenge is not just to purify economics of exaggerated claims, though
that is indeed needed. It is rather to recognize the limited scope of economic knowledge. This
does not mean there is no such thing as economic expertise: there is. But its scope and
generality are more limited than many suppose.
Michael Gove was wrong, in my view, about expertise applied in the Brexit debate. But he was
not altogether wrong about the expertise of economists. If we were more humble and more honest,
we might be better recognized as experts able to contribute to public debate.
With this in mind, what should be the goal of an education in economics at the university
level? A part of the answer will come from developments within the field. In time, the
incorporation of new ideas and techniques may make the academic discipline better at addressing
the intellectual and policy challenges the world now confronts.
Another part of the answer, however, must come from asking what an undergraduate education
ought to achieve. The answer should not be to produce apprentices in a highly technical and
narrow discipline taught as a branch of applied mathematics. For the great majority of those
who learn economics, what matters is appreciation of both a few core ideas and of the
complexity of the economic reality.
At bottom, economics is a field of inquiry and a way of thinking. Among its valuable core
concepts are: opportunity cost, marginal cost, rent, sunk costs, externalities, and effective
demand. Economics also allows people to make at least some sense of debates on growth,
taxation, monetary policy, economic development, inequality, and so forth.
It is unnecessary to possess a vast technical apparatus to understand these ideas. Indeed
the technical apparatus can get in the way of such an understanding. Much of the understanding
can also be acquired in a decent, but not inordinately technical, undergraduate education. That
is what I was fortunate enough to acquire in my own years studying philosophy, politics and
economics at Oxford in the late 1960s. Today, I believe, someone with my background in the
humanities would never become an economist. I am absolutely sure I would not have done so. It
might be arrogant to make this claim. But I think that would have been a pity -- and not just
for me.
In addition, it would be helpful to expose students to some of the heterodox alternatives to
orthodox economics. This can only be selective. But exposure to the ideas of Hyman Minsky, for
example, would be very helpful to anybody seeking to understand the macroeconomic implications
of liberalized finance.
The teaching of economics to undergraduates must focus on core ideas, essential questions,
and actual realities. Such a curriculum might not be the best way to produce candidates for PhD
programs. So be it. The study of economics at university must not be seen through so narrow a
lens. Its purpose is to produce people with a broad economic enlightenment. That is what the
public debate needs. It is what education has to provide.
I am afraid a worse problem with economists is that they don't seem interested in anyone's
opinions except their own.
They even hold ecology in disdain, not having any interest in learning what is, in fact,
the foundational system of their own 'science.' The booms and busts of capitalism show
familiar patterns to ecologists. Why, ecologists even have equations for them!
But I guess ecology is just too simple for the attentions of economists : Stupid animals.
They don't even use money! What kind of economy can that be?
So economists look for models everywhere except where to find them. The hubris of
humanity, not needing to give due attention to the economies of 'animal' societies.
To Yves. Well, I nearly lack the heart to respond, but I feel I must. Taking yesterday's
NC's lessons of looking at a human facing and having eye contact to remain human online, I
now do both – a human sits next to me. I read aloud to her.
Ok, you are a strong advocate of becoming a certified economist. Because 1.they make a lot
of money and 2. only they sit at the policy table.
Further claims made in your preamble: in no particular order of importance: something
about efficient outcomes that may not be equitable; command & control and guns and
butter; and sadly an analysis of Brexit voters in either camp.
(One exception to all that I say is those using MMT, certified, with a degree or not.
Again something I first learned about on NC.)
Yesterday, somewhere in the NC collective was the notion that the above mentioned
economists tell tho' we may be so out of balance with the world that our extinction as a
species is a legitimate issue to discuss, that in the end there ain't any money to not only
not fix the problem but not even deal with it. And these guys/gals you laud? I and others
have argued this gang provided the intellectual nonsense that put us where we are now.
What is your point that Econ grads make the most amount of money compared to what?
Philosophy majors? True or not I still say it's a waste of a life. Not the knowing, but the
being of one. I don't see what value there is for civilization in general but specifically
that just because they make a lot of money, it's good?
All social science grads you say v Econ grads make more money. I doubt that. Seems every
school district requires a PhD in Education, and a PhD in Business is very lucrative (not
saying useful, just pays well).
The policy table. I'm truly baffled as to what you refer. If they are the only ones at
said table then it follows they are the only ones at it. In my long life I'm trying to think
were we ever let an economist have the final say, or even a moderate say in any political,
governmental, or military policy. Some input yes, but deterministic, no. If they were sitting
at their own table, when asked they came to table with those that had the votes, give their
opinion and then left. Sociological impact statements had far bigger influence on policy. And
policy is no more then the data we can agree on to make decisions.
Sure, many governments, NGOs, multinationals all have jobs for economists but in someway
this is self serving, not a necessity. Kuhn's book on "The Structure of Scientific
Revolutions", does a good job of explain how authority gets established, vested, and in the
end becomes useless. That it exists is not an argument that it is necessary or good. That
there needs to be some way to define and explain things economic I no have issue with, that
outside of MMT that is has been, using system theory I don't see it.
As to efficient outcomes that may not be equitable that speaks for itself. It doesn't. No
'may not' about it, said with respect.
As to command & control and guns and butter, seems like a long time ago. A long time
ago, using science to help in making decisions was new and it took awhile to get it right, or
at least to get it working.
(Small note, I have dual US & UK citizenships)
An analysis of Brexit voters in either camp. I can tell you why I voted the way I did but
I need to make an appeal to Stephen Pinker's, "The Blank Slate". Either I have the free will
to make a decision and accept responsibility for it or I don't. I believe I do and did. I
voted to leave and yes their are economic impacts, as well as social, political, historical,
psychological, and philosophical. As did in electing Trump. As did the 1776 revolution, as in
the US Civil War, almost anything. Money is not everything nor the only thing. And the future
isn't what it used to be. The Long Emergency is here.
Hayek liked banding around watery terms like freedom and liberty its when he stopped being
an economist [political theory in times past] and jointed the ranks of ideologues .
Boy are you shooting the messenger. I'm not saying the way the economics discipline has
become influential is a good thing, but that is the way it is. How economics operates as a
discipline is great for economists, so why should they change? So what if their prescription
fail way too often? For instance, there haven't been any bad consequences to anyone who
didn't see the crisis coming and (even worse) advocated bank deregulation, starting with
Larry Summers (but he had plenty of company).
And you are simply wrong about the influence economists have. In the US, CBO budget
scoring is fundamental to how Congress views various proposed programs, even though we have
described how the CBOs methods are crap and the CBO operates as an a big enforcer of deficit
hysteria (as in they play a politicized role). The Fed and other central banks, the most
powerful single government economic actors, are all run by monetary economists. The IMF,
another very powerful institution, has deeply embraced and implements neoliberal policies,
namely, balanced budgets and squeezing labor (labor "reforms"). In the US, economists in op
eds and even in Congressional testimony (see Bernanke for instance) argue for balanced
budgets and argue the supposed necessity of cutting Social Security and Medicare and NEVER
mention cutting military spending. They are acting not just as enforcers of overall spending,
but by advocating what to cut, are influencing priorities.
Back in my former life as an economist-in-training, I ran into ecological economics as a
branch of natural resource economics. It was completely backwards – the extent
ecological theory was brought in didn't extend beyond simple predator-prey-plant models, and
the goal was to find the macroeconomic general equilibrium of biomass in the ecosystem.
That was probably just the most striking example of the institutional close-mindedness I
saw back among the economists.
Mr Wolf says, among the important concepts are "externalities" Like everything that
supports economic activity. Economics reduces the real world to "externalities" and simple
equations about things measured in crude tokens – money. How good can it be then.
Also, "Such a curriculum might not be the best way to produce candidates for PhD programs"
– is that a goal in itself? Like, the world needs a certain amount of economics PhDs
produced? What for?
Prof. Michael Hudson, Prof. Richard Wolff and others have long ago explained what's wrong
with mainstream economics, but that can't be said in FT.
This reminds me of the party press during the Perestroika in the 80ies talking about
reform in a similar soft and obfuscatory of the truth way, full of wishful recommendations,
striking a demurely optimistic tone supposed to convey integrity. It was bullshit and when
the real things started happening, everybody forgot about it, because it had no depth and no
bearing on real life.
It seems obvious to most people that not all values are commensurable with each other. For
instance, things like literary and artistic quality, friendships, and human lives cannot
defensibly be measured in dollar terms. However, this is just what economics attempts to do.
Hence, environmental economics simply aims to put a dollar value on environmental quality (or
degredation). Hence, the entirety of my Labor Economics course was focused on how you place a
monetary value on a human life, when the human happens to die because of their job.
So, I tend to agree with you. The whole discipline is of questionable value, so long as
economists refuse to accept some very basic truths and incorporate much more than money into
their analyses.
That comment strikes me as strange because one of the weaknesses of classical economic
models was the fact that how money works was not part of their inquiry.
In trying to judge the abilities of an expert, the best that most people can do is to see
the results on what they practice. If a doctor has a reputation of getting his patients
drug-addicted, then you would not go to them. If an engineer built a building but the roof
constantly leaked, you would think twice about giving them another contract. But let us think
about how well economists are judged. You might say that a lot of people in the UK discounted
their advice during Brexit but it has been noted that a lot of the Leave campaign was based
in depressed areas. Why were so many areas depressed? Because the people knew that the
government was using the advice of economists as to which areas to prioritize for resources.
And usually that meant London and its outer areas – which voted Remain.
People are fully aware of what happens too when WTO economists go into a country –
social services are cut, public transport is cut way back, the cost of living for the poor
skyrocket while the rich seem to be protected. And take a look at the economic state of the
United States. Wages have flatlined since the 70s, infrastructure is falling into disrepair,
whole swathes of the country are abandoned to their own devices, de-industrialisation is a
fact, etc, etc etc but the point is that the people that were giving all the advice to have
this done were economists like Ken Rogoff and his wonky austerity study. It may have been the
politicians that pulled the trigger but it was economists that were loading the gun.
if you want a breed of economists more grounded in reality, then I would suggest having them
work in a fulfillment center for a week to show the the consequences of what happens when you
get priorities wrong. Certainly they need to study the work of economists like Hyman Minsky
and Susan Strange who had gone out of fashion before the crash but the long and short of it
is to see what works and what does not work. I do not mean to be insulting here but as far as
I can see, modern economic theory has really been a theory for the top 20% and not for the
rest of the population. And now we are seeing the result up close and personal and until this
changes, people will not feel the need to take the advice of economist, even when they
should. Martin Wolf is fortunate in having also a humanities background but how true is that
nowadays?
The sentence " So, maybe the proper distinction to be made is between "trustworthy"
experts and "untrustworthy" ones " is important. Unfortunately, in the article I miss a key
aspect in making that distinction.
I seem to notice that the "trustworthy" areas of expertise in general tend to be removed
from political ideas or preferences. Left or right, liberal or conservative, democrat or
republican, it does not affect the way in which trustworthy experts go about their business.
It does not influence the way in which a doctor cures patients, a pilot flies a plane or an
engineer constructs a bridge. However, as soon as we start discussing things like the
economy, talk is full of "liberal" or "left" economists as opposed to "conservative" or
"right" economics. I have never heard of one bridge being more at risk of collapse because it
was designed by a liberal engineer versus a conservative one, or the other way round. When
discussing the strength of a bridge political leanings simply do not come into play, it is
not a factor like the strength of the steel used. But for all economic debate, these leanings
often seem to be the essence of the discussion.
Given the general public's intensifying distrust of politicians and all things political,
it does not surprise me that disciplines tainted by political colouring (like economics) are
considered "untrustworthy" compared to disciplines where political colouring is not a factor
(like the aforementioned doctors, pilots and engineers).
Since economics *is* in fact very interwoven with politics, I think the general public
will always treat economists the same way they treat politicians, that is with a healthy dose
of distrust. And who can blame them?
Yes, ability vs integrity.
And you can take 10 of the most honest and well meaning people, dedicated to the public good
and advancement of learning, employ them in a structure set up to profit first and ask
questions second, and the whole is going to be not the same as the sum of the parts.
I'd say an unhealthy dose of distrust is more likely and more common.
People tend to treat conventional econospeak as so much blah, blah, blah and then turn
around and credit or discredit what has been said on the basis of the tone with which it was
said.
Economists working for the kleptocracy get a lot of mileage out of sounding serious, while
talking complete rubbish. And, sadly, many economists working the left, get away with lame
one-liners and a rudderless iconoclasm.
I had an e-mail exchange with Mr. Wolf many years ago – before the 2008 crash
– where he basically told me that we live in the best of all possible worlds and that
nothing needs to change – he has changed his tune since then, I suppose to try to avoid
looking like a complete idiot and also to try to deflect criticism on to others. Maybe he has
öearned something in the meantime, but maybe he is just faking for the sake of
appearences.
I think he is faking it. It's the party line. It is the beginning of the neoliberal
Perestroika (see also Brad DeLong).
I quite like to look at it this way – it is very clarifying (as I lived in the
Perestroika) and I recommend it. Don't for a moment trust the Perestroika – it is
half-measures at best and purposeful deception at worst.
" The answer should not be to produce apprentices in a highly technical and narrow
discipline taught as a branch of applied mathematics ." With apologies to Mr. Richter,
economics is taught more like a branch of mathematical sophistry, and that is slighting the
original sophists.
I was an undergraduate studying applied mathematics at the time and place, present day
neoclassical economics was being developed, published and starting to be taught. I can think
of just one economics-and-finance classmate who continued to study mathematics beyond first
year calculus – which everyone had to take.
Our introductory numerical analysis professor was scathing about his colleagues at the
other side of the Quads. He made it quite plain that we could not skip the rigor and "try to
prove something like an economist". Pretty much all the econ students dropped his course when
they discovered that. The specific problem they could not address, can be simply stated. If
you know a number but don't know its error, you don't know the number. The difficulty the
great mass of economists have with just that, excludes economics as a branch of applied
mathematics.
pretty much the sum total of neoclassical economics is trying to work out the
counterfactual of how the economy would work if everyone had more-or-less complete
information to work with.
introduce genuine uncertainty, and pretty much the whole apparatus turns topsy-turvy and
all the "laws" of economics disappear or become highly contingent on circumstances unlikely
to obtain.
"Fixing" economics must start with a wholesale divestment from the idea of this profession
being a "science", said divestment openly promoted by economists themselves. All manner of
hardwired, warped thinking, to say nothing of obstinacy in changing one's views when
confronted with contradictory evidence, results from people believing that they're scientists
practising a real science. When such thinking seeps into the subconscious, the obstinacy is
locked into place and even events of the scale of the GFC aren't enough to shake loose the
erroneous biases held by the mainstream profession.
How else would an entire profession place so much faith in the predictive powers of its
models if not having such faith resting on a (supposed) firm foundation of science? An
engineer designing a beam for a bridge has justifiable faith in continuum mechanics (a real
science) as a sound foundation for their work, economics is devoid of such sound foundations
and its time the profession loudly and publicly declared this in an unprecedented act of
intellectual honesty.
Additionally, we see weak to non-existent culpability enforcement when policy
recommendations put on the table by economists wreck lives (as they have over decades), this
in stark contrast with e.g. an engineer designing a bridge that collapses and kills hundreds.
In other words, economists have outsized influence in matters of policy out of proportion
with the amount of actual skin they have in the game. On the other side, this "economics is a
science" narrative disarms a public already deficient in the marginal capacity for
independent, critical thinking to question anything economists say, said public including
politicians who, as aptly put by the Rev Kev, pull the trigger of a policy gun loaded by
economists.
>. . . economics is devoid of such sound foundations and its time the profession loudly
and publicly declared this in an unprecedented act of intellectual honesty.
Not one economist, with their ass planted firmly on their throne at the policy table, will
admit to that. The operating principle is venality.
Now that they have lost the respect of the peasants, I don't want them to matter again.
What I would like to see is mass firings of eclownomists, so they can experience life as
lived by the peasants, just once. It may even free up resources to pay people to actually do
good things instead of perpetuating one failure after another, and being grossly rewarded for
those failures.
I think he gets the wrong end of the stick here: "Consider the anti-vaccination movement,
hostility to evolutionary theory, or rejection of climate science."
No doubt there are occasions when vaccinations can do serious harm: a niece of mine was
excused a standard vaccination because of a contra-indication in her family medical
history.The anti-vaxers, though, seem to have elevated some small kernel of truth into a
stupid all-encompassing doctrine without giving the matter enough critical thought.
The anti-evolutionists seem to have failed to devote any critical thought to the matter at
all.
But the sceptics about "climate science" have deployed critical thinking to identify this
new religion as being composed largely of incompetence, dishonesty, and hysteria. It's the
likes of old Wolfie who are lacking in critical thought on this issue. Maybe he's one of
those people who is uneducated in science, and so too easily swayed by chaps shouting
excitedly about models, measurements, and so forth.
It's very odd. Goebbels Warming is now old enough that you can check the historical record
of its predictions of dreadful tipping points, of the disappearance of snow from Britain, of
the flooding of this and that Pacific island group, and so on. All false. So why should
anyone rational believe a word of it? After all, almost from the beginning its proponents
believed that the science was settled – it was inarguable. In which case why have their
predictions proved so lousy?
Consult a poet: humankind cannot bear very much reality.
Consult an economist: incentives matter.
So, Yves, you are saying ("Economists are the only social scientists to have a seat at the
policy table," etc.) that economists are like weathermen. They still have a time slot on the
evening news and are respected, even though their accuracy is abysmal. They make a lot of
money doing this.
Basically, this is because we expect very little of economists and because they have
stopped using ordinary language professionally, they have the status equivalent to someone
actually helpful.
I think economics has become an asocial science with too many economists willing to
provide some sort of academic cover for whatever the plutocrats want to do.
I think the analogy to meteorologists is interesting. As an engineer, I have some
perspective on this.
In engineering design, frequent failure of what we design is generally undesirable. So we
have our analytical tools based on both scientific theory and empirical data, and then apply
a factor of safety (sometimes called factor of ignorance, but more accurately is a
recognition that there is a probabilistic distribution of outcomes and the factors of safety
shift the design towards success instead of high probability of failure).
Airline pilots operate similar to engineers in that they aren't flying close to the edge
of the airplane's flight characteristics. Instead they stay in a zone quite a ways away from
what the airplane could potentially do. This is one of the reasons that airplane travel is
very safe, especially compared to car travel.
Meteorologists are trying to make predictions of the most likely scenario which means they
are trying to hit the center of the distribution of the potential outcomes. As a results,
they frequently are shown to have "missed" in that some other lower probability event
occurred instead. Over the past couple of decades, we have gotten used to seeing weather
forecasts with probabilities or ranges of outcomes.
I think the public presentation of economics has two separate problems, but both undermine
economics credibility.
First, economics is a field that is trying to predict the most likely event and the range
of potential outcomes, similar to the weather forecasts, but does not present the predictions
this way. So people don't cut economists slack because their public presentations don't
recognize the range of potential outcomes and the frank recognition of the inaccuracy of
their predictions that we are used to with the weather people, especially once they get past
24 hrs of predictions.
Second, many of the economists that make public predictions are funded by interest groups.
When we see a lawyer on TV, we know that he is being paid by a client to be an advocate and
that is his job as a lawyer. So we may disregard what he has to say but we understand the
context he is speaking in. However, the economists don't say who they are being paid by and
so they are presumed to be independent experts when they are sometimes not. I believe this is
a fundamental ethical issue within the economics profession.
So when the economics predictions (e.g. effects of tax cuts) fail to be accurate, it needs
to be parsed out if it was simply a lower probability event or if the predictions were
intentionally biased to begin with. None of this is well-addressed by the economics
profession, which greatly undermines credibility.
Economists also use the term 'efficiency' to denote pareto optimality, which causes much
confusion.
Especially when communicating with both analytical people of a hard-sciencey or
engineering background (efficiency = a context specific figure,
some-measure-of-output/some-measure-of-input, strict limits in how far you can generalize),
and business people (efficient = low cost)
economists also routinely distinguish the allocative efficiency they focus upon
almost exclusively from the kinds of technical or managerial efficiency that most of the rest
of the world focuses upon, but they rarely admit that their focus is so narrow and does not
generalize to encompass common sense notions of cost and efficiency -- it is almost as if
they want to avoid the critical examination engineering enables while providing double-talk
as cover for business people trying to privatize the profits while socializing the costs.
Let me start by saying that I object to the term "Dismal Science" for economics.
This is not because of the "dismal" part, it's because of the "science" part.
That being said, the devaluing of expertise is due in large part to something not
mentioned by Mr. Wolf: corruption, particularly for the field of macroeconomics.
We have seen this repeatedly in the past few decades, where nominally independent
researchers have been found to slant their research to accommodate the results desired by
their patrons. (The sad state of pharma and medical research come to mind as well)
In fact, ACCORDING TO THEIR OWN "RATIONAL ACTOR" THEORIES , academics in general, and
economists in particular,will behave in ways that will most strongly benefit themselves, and
not in ways that serve the truth or reality. (Studies have shown that economists
are the most selfish academics )
I believe that if you discuss the devaluation of knowledge and expertise without
discussing the pervasive corruption in western society, you are ignoring the proverbial
elephant in the room.
Economic Science is very optimistic that what they characterize as "economic growth" in
using up the world's resources in its pursuit, is a "good thing".
Economists are selling a limitless planet on which humans will always "pull the rabbit out
of the hat", to solve any resource issue, including climate change and overpopulation.
That being said, I view the economic profession, as largely practiced by its well-paid
members, as a mechanism to justify what the political and business elite want to do.
The elite are simply getting what they pay to hear.
I worked on simulation software for integrated circuits. My friend studied economics with
all the famous people. When I described to him what I did if there seemed to be a discrepancy
between what my simulator said and how the integrated circuit behaved in real life or the
intuition that an electrical engineer had about how it would behave in real life he was
amazed. I was amazed that he was amazed. How could you possibly believe a simulator that
necessarily has bugs in it, if you don't track down discrepancies to understand which is
right, your intuition or the simulator?
Sometimes, I had to be very inventive to find another way to make a complex calculation in
a way that would test out if the simulator was right. If economics students are taught the
math, but not how to check their work, and the necessity of checking their work, then they
shouldn't be in positions to make policy recommendations.
Many economists avoid operational modeling of the processes of the actual, institutional
economy. And, that which does take place in narrowly conceived research by specialists is
never allowed to feed back on the methods or theories embodied in the core doctrines.
One way mainstream macroeconomics defeats its own feeble efforts at empiricism is to set
the problems in a frame of time-series regression analysis of highly aggregated data:
national GDP and its high-level components year-by-year or quarter-by-quarter.
The behavior of tens or hundreds of millions of people reduced to statistics for largely
formless accounting conventions relating to a single somewhat amorphous entity (a country)
over time. History, however it happens, only ever happens one way, so there's always zero
degrees of freedom in the aggregate time-series.
There is so little information left in the data, even the most clever econometricians
would need a thousand years of data to "test" the most basic hypotheses. It is absurd to
approach the task in the way they do.
Is it necessarily as difficult a task as they make it, to learn something useful
about the way the economy works?
The problems of statistical aggregation and time-series are not rooted in the object of
study -- the actual political economy -- so much as they are created by the conceptual
apparatus.
In short form, economists have an analytic theory -- in form and epistemic status,
something akin to Euclid's geometry. A geometry is not itself a map of the world and no one
doing geometry confuses geometry with cartography or land surveying, but most economists do
not understand that their theory is not itself a model of the actual political economy.
Someone like Paul Krugman actually thinks he has "a map" of the political economy in, say,
IS/LM . No student of geometry expects to find a dimensionless point in the bathroom or an
isoceles triangle growing in the garden. Yet, economists regularly purport to casually
observe perfectly competitive markets in equilibrium or the natural interest rate.
I think economists could do as well as, say, meteorologists or geologists in developing an
empirically grounded understanding of the observable political economy, if they focused their
attention on concrete and measurable mechanisms of the institutional economy and stopped
talking meaninglessly about formless "markets" that have no existence.
This article reminds me of why I stopped reading The Economist after the GFC. The
Economist was quite explicit in advocating for a weak regulatory environment. I remember
articles talking about how great it was for the Office of Thrift Supervision to regulate
banks alongside others like the Fed because regulatory competition was good. After the GFC
they were writing articles about how they opposed this all along.
It's not just that so many economists are wrong. It's that many times their models and
predictions are wrong and they claim that it is either not what they argued for or
'externalities' intervened. Of course they never mentioned such externalities before. Many
just outright conjure up unicorns. There were no shortage of economists claiming that the
housing bubble was not a problem and the economy will grow to the point where things just
naturally level off. Of course there was no accountability for those peddling these
falsehoods.
Perhaps it's changed since I started out as an econ. major in the mid '70's, but what
disillusioned me was the total disregard for actual human behavior. Real people do NOT always
behave rationally or honestly. Emotions/psychology do figure greatly in real people making
"economic" decisions – just ask anyone who makes their living based on selling
something.
Every economic model should be prefaced with "In an ideal world " (or perhaps more
honestly "In an economist's construct of an ideal world )
How many brand name economists up and quit in disgust 11 years ago when the powers that be
decided to go against everything they stood for, and bailed out those that deserved to go
down in financial flames?
A parenthetical lifted from Randy Wray's post responding to DeLong on MMT:
an exasperated Wynne Godley came into my office a couple of decades ago and announced
that every [mainstream model] he had looked at was incoherent
That's the base problem, imho: economists are very successful as "experts" in a
sociological sense, slotting into the role with firm claims on salary, status and ritual
respect, as Yves Smith observed, but economics as a civic doctrine and a common frame of
reference for political discourse is incoherent and economics as a scholarly discipline or
"social science" fails methodological or epistemic standards.
There is a history of imperviousness to absolutely devastating critiques that isn't
explained. Is that persistent "wrongness" related to professional success or only a
by-product of an unfortunate pedagogy? Who puts the dogmatism into a dogma . . . and keeps it
there?
(disclosure: i was a professional economist myself many years ago -- neither ambitious nor
particularly successful, but I did attend ruling class schools for what that was worth)
Prof. Richard Werner has a fantastic talk (at the Russian Academy of Sciences) about,
among other things, "the unresolved puzzles of modern economics" – to me the most
striking there was how he dispenses with concept of "equilibrium".
He talks about the "puzzles" ~30 min in.
It is enough to see that and know that mainstream economists are little more than the high
priests of the peculiar modern religion guiding our society.
"The teaching of economics to undergraduates must focus on core ideas, essential
questions, and actual realities."
Sadly Mr. Wolf suffers from the same delusions that so many mainstream economist suffer.
They think they have actually considered "actual realities".
Yet the foundations of mainstream economics ignores these ACTUAL REALITIES
– Assumes Loanable Funds yet the Bank of England & the Bundesbank both publicly
published research say endogenous money is correct. Loans create Deposits. They are clueless
as to how finance works. I recall the infamous intro to econ question "If I double you income
and double prices for beer, how much beer can you now purchase?" The standard econ answer is
the same amount of beer. But in the real world the correct answer is you don't know. The
professor never told you how large the fixed debt payments of the person were which most
definitely impacts the amount of disposable income you have to buy beer. But then again most
economists would likely fail any advanced accounting class. Long gone are the days when
undergraduate economics students in economics had to take 2 or 3 semesters of accounting.
Even my alma mater which is definitely heterodox in faculty and has MMT / UMKC taught faculty
only require 1 these days. You need a strong foundation in accounting to be stock flow
consistent in your modeling of a highly monetary modern economy.
– Assumes upward sloping supply curve is the market norm. At least 3 economic studies
have attempted to measure this on large cross industry scales and every time concludes that
over 1/2 of all businesses face downward sloping cost curves (natural monopoly stuff, and we
wonder why industry concentration is the norm) and another 1/3 face flat cost curves. An
upward sloping supply curve, for those not taking advanced or graduate level economics IS the
assumed upward sloping marginal cost curve of the industry or nation if you're crazy enough
to apply it at the macro level.
There are dozens more piss pore assumptions that underpin mainstream economics. In this
day and age far more EMPIRICAL, real word data can be used to confirm what really makes an
economy work, but sadly what we teach in college is garbage where the ACTUAL REALITIES are
ignored.
a logical definition of wealth is absolutely needed for the basis of economics if it is
to be a science."
Frederick Soddy, WEALTH, VIRTUAL WEALTH AND DEBT,
2nd edition, p. 102
Economists and financiers seem to be incapable of understanding we live on a finite planet.
Nor do they seem to be able to get beyond equating money with wealth. It is much easier to
just put a price on something like a Beethoven symphony (or call it 'priceless') than to
attempt a definition of wealth. But for most of us the ingredients of a definition are much
simpler. Topping the list has to be energy. You can't create it but you can dissipate it,
i.e. render it useless, by for example manufacturing useless junk that falls apart quickly
enough for people who run or own the business to make a lot of money.
Or if your customers can no longer afford the junk because you have automated or
off-shored their jobs, you can sell guns and bombs to your wholly owned government – to
use in blowing up people who stand in the way of your accumulating more of the money created
by your bankers, financiers and politicians. Then there is the basic intelligence required to
run the machinery and discern better – i.e. more energy and resource efficient –
ways of doing things. With real wealth creation comes power. The Chinese may have figured
this out. The West's 1%, its economists, bankers and politicians don't appear to have a
clue.
Did Kenneth Rogoff apologise for his hit on Iceland and his subsequent dismay defense in
Ferguson's "Inside Job"? At least one of the Chicago boys (Jonathan Sachs) has resiled from
the opinions of Friedman and rejoined the human race but only after a raft of countries were
ground down by the mill of the moneymen. Chile and Poland seem to have survived at horrible
social cost but what of the others?
The plaint is partly true. When governments were advised by economists, they replaced the
wishes of the electorate. The economist brought along their army of lawyers who instantly
appeared as mercenary terrorists to browbeat and coerce officials with various threats to do
as the moneymen asked and cease attending to the people. This is still the state of play in
UK and USA and those core paper-issuers drag the 'also rans' along with carrots and
sticks.
I believe the fault lies in lazy officials who seldom run trials on new ideas in limited
areas but drop the entire country into one speculative foray after another. Its a shame that
its not mentioned. There is no good reason why the whole country has to be volunteered for
these new scheme. Why has the UK Treasury shut down every competing form of banking to the
high street banks – the trust banks, coop bank, post office bank, municipal banks,
mutuals – all thrown away as infringers of the BoE's monopoly. The country needs an
Oliver Cromwell or Napoleon to lead it not the present bunch of ragamuffins and
hooligans.
That brings me to the second problem the disastrous state of the representation. It is
mainly due to the control factions have brought to bear on the selection of candidates for
office. That has to stop and the way to do it to have primary assemblies of every 200-300
people who select one of their number to represent them. He's a school friend or neighbor and
a known quantity. Several primary assemblies select a chap to represent them and so on up
this new structure of democracy to the top.
The business community have sought to keep everyone's nose to the grindstone with
statistics justifying under payment by understating inflation. That has to stop. The
economics trade belongs with astrology and weather forecasting until it acknowledges the
fundamentals that drive prices.
It seems to me from my citizen's non-professional perspective that the only real
economists are experts in resource extraction, manufacturing and end use of same.
IOW, a forester, mining, petroleum, construction engineer and even a naval admiral,
sitting around a table, all beholden to and obeying the supreme chairmanship of an ecologist,
would be a better and less destructive thing for the world than a bunch of money only maximum
value extraction Wall Streeters controlling the engineers mentioned above.
Can there even be an economy without resource extraction? It seems like most new economic
schemes are attempting this with humans bodies, credit ratings and bank accounts being the
last available commodity.
The economists got Ricardo's theory of comparative advantage, but they missed this:
"The interest of the landlords is always opposed to the interest of every other class
in the community" Ricardo 1815 / Classical Economist
What does our man on free trade mean?
He was an expert on the small state, unregulated capitalism he observed in the world around
him. He was part of the new capitalist class and the old landowning class were a huge problem
with their rents that had to be paid both directly and through wages.
Disposable income = wages – (taxes + the cost of living)
Employees get less disposable income after the landlords rent has gone.
Employers have to cover the landlord's rents in wages reducing profit.
Ricardo is just talking about housing costs, employees all rented in those days.
Employees get their money from wages and so the employer pays through wages.
Look at the US cost of living: The cost of living = housing costs + healthcare costs + student loan costs + food +
other costs of living
Employees get their money from wages, so it is the employer that pays through wages,
reducing profit and driving off shoring from the US.
Maximising profit requires minimising labour costs; i.e. wages.
China, Asia and Mexico look good, the US is awful.
(This is Michael Hudson's argument in a slightly different from)
There are some fundamental problems with today's economics, like this and the fact it
doesn't look at money, debt or banks.
Also, it hasn't worked out financial markets are not like other markets.
The supply of stocks stays fairly fixed and central banks can create a "wealth effect" by
just adding liquidity. More money is now chasing a fairly fixed number of financial assets
and the price (e.g. stock market) goes up.
The media and the establishment are focused on Trump and his personality. They don't want
to delve into the zeitgeist that allowed him to defeat two political dynasties. That's what
they should be focused on.
It's a similar zeitgeist that caused Brexit. That elected Salvini and 5 Star in Italy.
That's behind Gilets Jaunes who are now in their 18th week of protests in France. China going
more totalitarian by the day under Chairman Xi.
The Party of Davos have ruled for 40-50 years. We've got unprecedented wealth inequality.
We've got endless wars with no benefit for the Deplorables. All they have are opioids. More
dying of that than automobile accidents. Health care, tuition, rents all rising. A double
standard in tthe application of the law. Hypocrisy oozing from every pore of the ruling
elites. Bribing their way to elite colleges while espousing meritocracy.
Is this what Howe & Strauss mean by the Fourth Turning?
In Europe it was right-wing governments who were largely responsible for introducing elements
of a welfare state as a means of protecting capitalism and preventing the spread of
socialism. Most real socialists opposed the welfare state efforts as they regarded them as a
smoke screen.
If the 1% in the United States wish to enjoy the fruits of capitalism long term, they should
do the same otherwise it'll be 1848 all over again. So yes, ""history repeats itself--the
first as tragedy and then as farce", it's just that Marx was referring to larger events over
a longer time frame than consecutive presidential elections.
I remember that this was particularly true of Bismark. We already have a mixed economy in th
US. Social Security, hospital emergency rooms, a graduated progressive income tax systems,
local arrangements for giving low income people a break on property taxes both for real
estate taxes and taxes on cars, etc. I suppose you are aware that people with higher incomes
pay the great bulk of income taxes in the US? Are you familiar with the EITC
https://en.wikipedia.org/wi... what kind of change do you want to make, a guaranteed
government provided income? Forgiveness of college load debt? What?
One Born Every MinuteOne of many legacies left by the late cultural theorist, Stuart
Hall, in Representation: Cultural Representations and Signifying Practices was to emphasise
that to understand "the effects and consequences of representation" we must consider
"historical specificity". That is, he writes, "the way representational practices operate in
concrete historical situations, in actual practice". With this in mind, we want to consider
some cultural trends that have surfaced in British austerity culture and how they are entangled
with neoliberal rationalities and philosophies. Our aim is to explore whether we are seeing the
emergence of a specific discursive formation that we might call 'austerity neoliberalism'. To
suggest this is not only to draw links between austerity and neoliberalism – they are
there to be sure – but, more than this, to raise questions about whether they are being
put to work in contemporary capitalism in a way that is mutually reinforcing, coming to
constitute a novel formation – like Hall's idea of 'authoritarian populism'.
Neoliberalism is a contested term. Gill & Scharff describe it as "a mode
of political and economic rationality characterised by privatisation, deregulation and a
rolling back and withdrawal of the state from many areas of social provision". In its place is
the market – market exchange seen as an ethic in itself, capable of
guiding human action , and spreading out across social life so that it reconfigures
relations between " governing and governed, power and
knowledge, sovereignty and territoriality ". Our own interests have focussed on the role
and force of neoliberalism in remaking subjectivity in ways that construct the individual, as
Lisa
Duggan and
Wendy Brown suggest, as a calculating, entrepreneurial and 'responsibilised' subject,
wholly responsible for their own life outcomes. We are interested not simply in how this
construction erases structural inequalities and exculpates brutal social and economic forces,
but also in how it materialises new ways of being in the world – that diminish what it is
to be human.
There are clear links between neoliberalism and austerity. As Tracy Jensen and others,
such as
Kim Allen et al. , comment, the "objectives of 'austerity' align neatly with those of
neo-liberalism: to discipline labour, to reduce the role of state and to redistribute income,
wealth and power from labour to capital". Britain has seen vast changes to the socio-economic
landscape thrust forward under the rationale that austerity measures are needed to pull the
country out of recession and place it on the road to recovery. We have seen a devastating
increase in social inequality. Increasing changes to welfare provisions like the bedroom tax
and cuts to disability and sickness benefits, harsh benefits sanctions and reorganisations and
cut backs to state-led services at the same time as rises in
homelessness , food
bank usage and deprivation
have emerged.
However as some scholars have argued, austerity is not only an economic programme of 'fiscal
management', but also a site of ideological and 'discursive struggle' – and this struggle
plays out across government, public sites and popular culture in particular ways with very real
material outcomes. As Tracey Jensen and Imogen Tyler point out in a special issue on 'Austerity
Parenting' in 2012, the "public narrative of austerity" increasingly upholds the individual
as responsible for their own social and economic status, as well as accountable for their own
locality, a bustling economy and increasing independence from the state. Some have explored the
emerging importance of thrift , nostalgia or gendered domestic
entrepreneurship to show how austerity is shaping current formations of the self in the
cultural sphere. Other examples of this are studies on the
'stay-at-home mother' , the 'recessionista' and the book,
Gendering the
Recession .
We want to briefly consider three other useful ways of thinking together 'austerity' and
'neoliberalism'. First, and continuing our psychosocial focus, we wish to draw attention to the
increasing emphasis on 'character' in contemporary Britain. As Anna Bull and Kim Allen have put it in a recent
call for paper s, "A growing number of policy initiatives and reports have asserted the
importance of nurturing character in children and young people – with qualities such as
'grit', 'optimism', 'resilience', 'zest', and 'bouncebackability' located as preparing young
people for the challenges of the 21st century and enabling social mobility." Resilience, in
particular, has become the neoliberal trait par excellence for surviving austerity. As
Mark Neocleous argues :
"Good subjects will 'survive and thrive in any situation', they will 'achieve balance'
across several insecure and part-time jobs, they have 'overcome life's hurdles' such as facing
retirement without a pension to speak of, and just 'bounce back' from whatever life throws,
whether it be cuts to benefits, wage freezes or global economic meltdown."
In turn, looking at the parenting and family policy that emerged under the coalition
government there has been an emphasis on how character can solve the ills of 'poor parenting',
which constructs working-class families as 'bad' parents in need of monitoring and
disciplining. Tracey Jensen argues that
the preoccupation with 'tough love' in social policy places increased prominence upon parents'
character to realise children's social mobility. This, she asserts, " names the crisis
of social immobility as one of parental indulgence, failure to set boundaries, moral laxity and
disciplinary incompetence", seeing the responsibility of class inequalities placed on an
individual's shoulders.
New forms of surveillance are also a key part of austerity neoliberalism. Austerity has seen
a rolling back of the state furthering neoliberal mentalities, such as the increasing
withdrawal of welfare support and
pushing of individuals on welfare into work . This rolling back of the welfare state has
occurred as the state attempts increasingly to observe its citizens and intervene into private
life across multiple domains (schools, health, obesity, etc.). Val Gillies explores how, following New
Labour's cue, the coalition government gradually increased its intervention into the family at
ever-earlier stages. For example, she notes how under the Family Nurse Partnerships certain
pregnant women whose unborn child is considered 'at risk' of social exclusion are assigned
nurses who will teach them parenting skills to ensure social exclusion of the unborn child does
not occur. As Gillies, among others , suggests, these
types of surveillance mechanisms and interventional practices often target the most
marginalised in society, retaining and reifying longheld inequalities around gender, class and
'race'.
Lastly, austerity neoliberalism has seen a simultaneous idealisation and dismantling of the
state in the cultural realm. Recent research on televisual
birth explores how Channel 4's award-winning show, One Born Every Minute , obscures
the current context and effects of austerity by emphasising the importance of individual
narratives of conflict and resolution through the mothers, families and midwives featured. On
the one hand, the NHS/state is idealised but, on the other hand, there is a systematic failure
to engage with how austerity has impacted on maternal care, midwifery and maternity wards. This
one example of recent "
spectacular dramatizations of the paradoxes of the political present " sees nurses and
midwives depicted through a soft-focus image of self-sacrifice, care and romance, seen as
'angels', whose virtues are put to work to obscure a healthcare system that often seems to be
at breaking point. This idealisation of hospital life and silence around austerity effects
works to distract attention away from the material effects of austerity, cloaking them in a
rosy glow in which 'love' and 'goodness' can seemingly compensate for a crumbling NHS.
In all three examples – the new cultural obsession with 'character', the
intensification of surveillance, and the romanticisation of welfare and healthcare workers
– we see not simply austerity at work, nor simply the impact of neoliberalism, but a
distinctive formation where the two become mutually reinforcing. The UK has been through
periods of austerity in the recent past – not least in the 1920s and 1930s and in the
post-war period. However difficult these periods were (e.g. marked by considerable economic
hardship and rationing), what is significant is that they were shaped by entirely different
ideological and cultural framings – not by neoliberalism. It is the systematic and
patterned framing of austerity measures through an individualizing neoliberal discourse that
distinguishes the current formation as one of austerity neoliberalism. Austerity does not
necessarily have to be neoliberal and neoliberalism does not have any necessary connection to
austerity. But taken together they represent a toxic combination, one that attacks us body and
soul.
Friday, 21 October 2016Neoliberalism and austerity I like to treat
neoliberalism not as some kind of coherent political philosophy, but more as a set of
interconnected ideas that have become commonplace in much of our discourse. That the private
sector entrepreneur is the wealth creator, and the state typically just gets in their way. That
what is good for business is good for the economy, even when it increases monopoly power or
involves rent seeking. Interference in business or the market, by governments or unions, is
always bad. And so on. As long as these ideas describe the dominant ideology, no one needs to
call themselves neoliberal.
I do not think austerity could have happened on the scale that it did without this dominance of
this neoliberal ethos. Mark Blyth has described austerity as the
biggest bait and switch in history. It took two forms. In one the financial crisis, caused by
an under regulated financial sector lending too much, led to bank bailouts that increased
public sector debt. This leads to an outcry about public debt, rather than the financial
sector. In the other the financial crisis causes a deep recession which - as it always does -
creates a large budget deficit. Spending like drunken sailors goes the cry, we must have
austerity now.
In both cases the nature of what was going on was pretty obvious to anyone who bothered to find
out the facts. That so few did so, which meant that the media largely went with the austerity
narrative, can be partly explained by a neoliberal ethos. Having spent years seeing the big
banks lauded as wealth creating titans, it was difficult for many to comprehend that their
basic business model was fundamentally flawed and required a huge implicit state subsidy. On
the other hand they found it much easier to imagine that past minor indiscretions by
governments were the cause of a full blown debt crisis.
You might point out that austerity was popular, but then so was bashing bankers. We got
austerity in spades, while bankers at worst got lightly tapped. You could say that the Eurozone
crisis was pivotal, but this would be to ignore two key facts. The first is that austerity
plans were already well laid on the political right in both the UK and US before that crisis.
The second is that the Eurozone crisis went beyond Greece because the ECB failed to act as
every central bank should: as a sovereign lender of last resort. It changed its mind two years
later, but I do not think it is overly cynical to say that this delay was partly strategic.
Furthermore the Greek crisis was made far worse than it should have been because politicians
used bailouts to Greece as a cover to support their own fragile banks. Another form of bait and
switch.
While in this sense austerity might have been a useful distraction from the problems with
neoliberalism made clear by the financial crisis, I think a more important political motive was
that it appeared to enable the more rapid accomplishment of a key neoliberal goal: shrinking
the state. It is no coincidence that austerity typically involved cuts in spending rather than
higher taxes: the imagined imperative to cut the deficit was used as a cover to cut government
spending. I call
it deficit deceit. In that sense too austerity goes naturally with neoliberalism.
All this suggests that neoliberalism made 2010 austerity more likely to happen, but I do not
think you can go further and suggest that austerity was somehow bound to happen because it was
necessary to the 'neoliberal project'. For a start, as I said at the beginning, I do not see
neoliberalism in those functionalist terms. But more fundamentally, I can imagine governments
of the right not going down the austerity path because they understood the damage it would do.
Austerity is partly a problem created by ideology, but it also reflects incompetent governments
that failed to listen to good economic advice.
An interesting question is whether the same applies to right wing governments in the UK and US
that used immigration/race as a tactic for winning power. We now know for sure, with both
Brexit and Trump, how destructive and dangerous that tactic can be. As even the neoliberal
fantasists who voted Leave are finding out, Brexit is a major setback for neoliberalism. Not
only is it directly bad for business, it involves (for both trade and migration) a large
increase in bureaucratic interference in market processes. To the extent she wants to take us
back to the
1950s, Theresa May's brand of conservatism may be very different from Margaret Thatcher's
neoliberal philosophy.
You excellently encapsulate neoliberalism with the motto " That what is good for
business is good for the economy, even when it increases monopoly power or involves rent
seeking. " -I'd add that it CAN be good for an individual country's economy in a zero-sum
way because terms of trade can be so much improved if a country provides lucrative
investment opportunities due to rent seeking being streamlined. It may be bad for the
global economy and yet good for us at the expense of people elsewhere. We import real
goods in exchange for foreign oligarchs holding stakes in our inflating land prices.
Sorry Mr or Mrs Ms Stone what good for business is bad for all economies,simply what
you do to one side of the equation you must do to the other,by favouring on side of the
equation you must corrupt the other side ,Hence stagnation,QE,Nirp,Zirp,negative.rates
/bonds etc etc,nothing they do will fix the problem until they trade fairly,the two side
of the equation are intrinsically too each other,even Helicopter money unless it is
targeted at those who have lost out in this what is good for business then it will
achieve nothing it can't
You forgot the financiers funding the Tory Party in the 2010 and 2015 elections, so
using philosophical conservatism's hatred of those on benefits and immigrants to deflect
from investment bankers and hedge funds' once in 300 years incompetence.
Then, in 2015, contrary to financiers' wishes, a referendum is promised for 2016, and
subsequently lost.
Will the financiers keep funding the UKIP-Tories?
Will the Leave group fund the UKIP-Tories instead?
Will May keep talking about the 'national interest' as she, in Bentham's phrase,
'chains the living to the dead' with a Brexit the under-50s and better educated never
wanted?
Will the woman I saw puzzling over the drop in the exchange rate on the Friday after
the vote ever go on holiday abroad again?
You aren't supposed to ask awkward questions like that. The important thing about the
word "neoliberalism" is that it sounds technical and has no less than SEVEN syllables -
which is impressive. Using the word cows your opposition into submission...:-)
I worry that neoliberalism amounts to a cashing out and unraveling of the broad based
prosperity previously built up by social democracy. Current account deficits are
willingly funded by investors using rent seeking opportunities to extract from the UK
population. But when its all wrung dry that's the end of it.
YESS a crisis in capitalism. That's why I have always been astounded at the claims
that "Obama is a socialist" "The US government is taking over the economy" post 2008
crisis. Yes, government stepped in to protect capital as much as it was able to do
so.
I find criticisms of neo-liberalism by mainstream economists odd and incredibly
hypocrticial. When neo-liberals were king, such as during the 1990s, and they could show
that free trade and free and deregulated markets (goods financial and labour markets)
were so good, economists were only too happy to show how this was exactly what their
theories showed.
Now when it is less fashionable, they say, well we knew that all the time. Well why
weren't you saying this during the 1990s and up to 2007?
Anonymous Understand where any cycle is,is very important in real terms there was a
vast potential untapped locked into Western economies,which for sometime worked because
that is what the economy need to re-balance & go forward,however some felt that that
was a linear utopia when it was a cylindrical & was already turning into a strain on
the other side of the equation,with previous downturns,that if they realised what was
going on would have stopped it.
However because they were taught the earth was flat they never understood the gravity of
their actions.All they ever did was re-balance the economies of the seventies only to
push them into being un-balanced in the other direction by the 90's & since then it's
been downhill all the way.
I am quite unclear what Mrs May's "brand of conservatism" is.
I have seen it persuasively argued that the party's basic purpose for the last century
has been to keep Labour out of office.
Considering how varied the approaches of successive post-WWII Tory administrations have
been it seems fair to characterize their policies as eclectic.
I have an idea what MacMillan and Thatcher stood for; what does May stand for?
I have no idea.
Culture, culture, culture. We have to build an anti-neoliberal culture. How? Unions,
unions, unions.
Full scale re-unionization (I don't say "massive" which implies extraordinary -- what
is extraordinary is 5% union density in private business; that's like 20/10 BP) will
create a broad and deep consensus for (let's call it what it is) normal, grownup
economics.
[cut-and-paste]
States can add to federal labor protections but not subtract (e.g., minimum wage). In the
absence of actually working protection of organizing (not just organizers) states should
feel free to impose certification elections where labor market warping is found.
Union busting should be a felony (taken at least as seriously as taking a movie in the
movies ;-]) -- but mandating elections could be the most direct remedy for union
blocking.
Intimidating union organizing is illegal everywhere -- and nowhere/nowhere
practicably. If caught firing an organizer, then, at most you must rehire her. Doesn't
matter if you fully compensate her income loss and never fire her again -- you got away
with the real bank robbery money; you barred the certification election.
Remedy that would make the clearest economic logic: a finding of union busting should
lead to a mandatory certification election. Most would expect this sanction needs to take
place at the federal level (NLRB preemption). This could be possible if Hillary pulls
enough reps and senators with her. Perfect issue to attract Donald's AND BERNIE'S blue
collar workers.
I believe this sanction could be done at the state level because the federal setup
protects organizers (in theory if not so much in reality) but offers no protection for
the act of organizING itself (except for categorizing it as illegal). If there is no
DIRECT protection for organizing to preempt (not in any SUBSTANTIVE way), then I would
argue that the states could mandate an election (upon the finding union blocking).
There may even be a tricky (as in convoluted) First Amendment argument: the federal
setup cannot constitutionally void state protection of the First Amendment right to
associate commercially by the imposition of a setup that provides no (as in zero)
protection of it's own.
This is just an aside. I am not an economist. I took a bunch of economics classes in
college but I didn't do particularly well because at least then I wasn't so great at
graphical reasoning not to mention higher mathematics.
But I definitely learned about the difference between macro and micro economics, and
about Keynesian economics and how the government "should" "step in" and spend when the
economy is failing.
I understand the general neoliberalism paradigm.
But somehow there is a major failure in economics understanding/education if it is the
case that most of us who took some classes in it (especially all those VSPs and the
educated people who read newspapers etc.) would reflexively support the application of
microeconomic responses ("austerity," "getting your household finances in order" the
household being the national government) to macroeconomic problems.
"the financial crisis, caused by an under regulated financial sector lending too
much"
I can't believe there is still so much ignorance about what happened and is
happening.
Do you think totally unregulated banks could have leveraged their equity over 50
times? Of course not! They did so because regulators concocted the risk weighted capital
requirements with which 2004 Basel II allowed banks to leverage their equity, and the
support they received from society, 62.5 times to 1, if the asset only had an AAA to AA
rating.
And frankly to talk about neoliberalism, and not of non-transparent statism, when
since the Basel Accord in 1988, the risk weight for the sovereign were set at 0% and for
We the People at 100%, is ludicrous.
Below an aide memoire on some of the monstrosities of such regulations.
objections.
http://perkurowski.blogspot.com/2016/04/here-are-17-reasons-for-why-i-believe.html
You wrote above: ..... the Eurozone crisis went beyond Greece because the ECB failed
to act as every central bank should: as a sovereign lender of last resort.....
I would put it differently. The European crisis was caused by net importing countries
within the Eurozone, like Greece, and to less extent Portugal and Spain, that financed
their imports by taking loans from the exporting countries. Most of this loans went to
consumption and white elephant projects. This had to blow up one day. So it happened in
2009. The question is after it became obvious that it can't go on forever, what next?
Should be the debts annulated, and creating a precedent, that there is no obligation to
repay the debts? Or should be cleare to certain extent, that debts have to be repaid even
if partly, and when the time of repayment comes, it will be very tough.
I'd argue that neoliberalism is fairly coherent and very authoritarian, an element
you've omitted from your description. David Harvey describes it well. I'd agree with the
rest of your analysis though. Austerity was more opportunistic than instrumental: a case
of not letting a good crisis go to waste; a form of scorched-earth policy. You're also
right about May which is why I predict she'll be out of office in a year's time: she
isn't a neoliberal and the party donors won't like that. It would appear that she's been
a very dark horse all these years.
I think you've got the wrong end of the stick: it is the pro-state control lot that
are keen on monopolies. Liberals (neo and otherwise) are keen on markets and
competition.
The area where liberals like monopolies is in the support of property ownership,
particularly intellectual property. A patent is a 20-year, legally enforceable monopoly
on an invention. This is provided in exchange for sharing the knowhow and protects the
incentive to innovate.
"Liberals" are a fan of private armies then? There is a reason the government has a
monopoly on monopoly. So that the elected bodies are the 'big man' in the country, not
anybody else.
It's not the sector the company/organisation is in that is the issue. It's down to how
old and moribund the organisational structure is.
As to patents, the state can fund whatever research is required, and then issue the
results on an open patent.
There is no need for private sector like large pharma companies and private
intellectual property. In fact as certain things (giving example of drug development
again as it is a good one) gets more and more risky inevitably it will have to be
socialised.
Liberals have always identified a role for the state and other public institutions.
So, no, private armies have never been part of a liberal political philosophy.
I am sure that writers, film-makers, musicians etc would disagree with the notion that
there is no need for private intellectual property. Creativity is rather hard, copying it
is quite easy.
All patents are 'open' to read and learn from, that is the point. Again, invention is
hard and copying is easy.
Of course, if you really want to experience state economic control, you are free to leave
our liberal democracy, though there are few places you could move to. When people have
the choice, state control over everything really isn't popular.
(New Politics Vol. XV No. 3, Whole Number 59) [PDF][Print]
Ask anyone what
neoliberalism means and they'll tell you it's an economic system that corresponds to a
particular economic philosophy. But any real-world economic system has a corresponding
political system to promote and sustain it. Milton Friedman, who has become known as the father
of neoliberal thinking, claims in his text Capitalism and Freedom that "the role of the
government is t o do something that the market cannot do for itself, namely, to determine,
arbitrate, and enforce the rules of the game."* While neoliberalism's advocates like to claim
that the political system that corresponds to their economic preference is a democratic,
minimal state, in practice, the neoliberal state has demonstrated quite the opposite
tendency.
This essay will begin by sketching out the core tenets of neoliberal theory, tracing its
history from the classical liberal tradition of the Enlightenment. I will then present some
hypotheses on how relations between the neoliberal state and society operate, contrasting the
state theories of Ralph Miliband and Nicos Poulantzas to create a framework that shows how
the neoliberal state is a product and enforcer of anti-democratic practices . I will
argue that the implementation of neoliberal economic policy, and the subsequent evolution of
the neoliberal state, has historically been completed through anti-democratic methods. Further,
in an effort to produce social relations that are more favorable to the accumulation of
capital, austerity is employed as a tool to move further toward a market society, creating a
larger, more interventionist state and promoting authoritarianism.
Neoliberalism in Theory
The term neoliberal is often convoluted, confused, and misinterpreted, especially in the
American context where the center-left Democratic Party has traditionally held the title of
liberal. The original liberals, or classical liberals as they are usually called, were those
Enlightenment-era thinkers of Western European origin who desired to limit the authority of the
feudal state and defended individual rights by restricting the power of the state, the crown,
the nobility, and the church. The "neo" prefix serves as a romantic symbol, an attempt at
establishing a (sometimes forced) common ground with historical figures like Adam Smith and the
classical liberals, who challenged the tendencies of the monarchy to interfere in the economy
for its own gain, producing inefficiency. Neoliberal economic thinkers are famously known for
deriding government intervention in the economy, precisely because they trace their foundation
to a period when markets were seen not just as a source of better economic outcomes, but as a
weapon to challenge concentrated political power.
This revamping of liberalism appeared in the twentieth century at a time when its proponents
believed they were facing a similar struggle against the expanded state apparatuses of Europe
-- communist, social-democratic, and fascist. Friedrich Hayek, whose text The Road to
Serfdom , published in 1944, is arguably the most celebrated of the neoliberal canon,
sought to show how government interference in the economy forms the basis of fascist and other
totalitarian regimes, contrary to the then widely accepted notion that it was capitalist crisis
that had produced fascism in Europe. For Hayek, the strong state, whether in the form of
fascism, Soviet communism, or the creeping socialism of the British Labour Party, was to be
eschewed.
If neoliberalism springs from a desire to combat the growing power and influence of the
state, how is it that neoliberalism has produced not only a very robust state apparatus, but,
as I will argue, an authoritarian one? The answer is that neoliberalism in practice has been
quite different from its theory.
The Necessities of the State in Neoliberal Theory
As David Harvey points out in A Brief History of Neoliberalism, the neoliberals'
economic ideals suffer from inevitable contradictions that require a state structure to
regulate them. The first of these contradictions revolves around the role of law to ensure the
individual's superiority over the collective in the form of private ownership rights and
intellectual property rights (patents and copyrights). A judicial system is necessary to
designate and regulate the interaction between private actors on the market. While intimations
of the regulatory state can be seen in this formulation, it is hardly anything controversial.
Only the most extreme of laissez-faire economic thinkers would not acknowledge the requirement
of a state structure that creates the space for and regulates contracts.
The second contradiction derives from the elites' historical ambivalence regarding democracy
and mass participation. If the people were free to make decisions about their lives
democratically, surely the first thing they would do is interfere with the property rights of
the elite, posing an existential threat to the neoliberal experiment. Whether these popular
aspirations take the form of drives towards unionization, progressive taxation, or pushing for
social policies that require the redistribution of resources, the minimal state cannot be so
minimal that it is unable to respond to and crush the democratic demands of citizens. After
all, as pointed out in the first contradiction, the neoliberal state exists in theory to
guarantee the rights of the individual over the demands of a majority. Therefore, a system must
be put in place that protects against the "wrong" decisions of a public that is supposed to
buy, sell, act, and choose freely.
Two Levels of Authoritarianism
Any method that seeks to subvert the democratic demands of citizens, whether through force,
coercion, or social engineering, is authoritarian. I argue here that the neoliberal state is
authoritarian in two distinct but related forms. First, the historical imposition of
neoliberalism on nation-states is the result of anti-democratic forces. Second, the maintenance
of neoliberalism requires a market society achieved through a transformation in civil society.
For this transformation to take place, welfare states must be slimmed down by austerity
policies in order to turn over to the market potentially lucrative sectors of the social
economy (in health care, education, social security, and so on). Public resources must become
privatized; the public good must be produced by private initiative. Neoliberal economic policy
can only function with a state that encourages its growth by actively shaping society in its
own image, and austerity is the tool to push for that transformation. While the subversion of
democracy is clearly authoritarian, the drive towards a market society and the social
engineering necessary to maintain that society are further expressions of the de facto
authoritarianism of neoliberalism and the neoliberal state.
Austerity traditionally has been defined as the economic policies surrounding deficit
cutting. When public debt runs too high, according to the theory, the accounts must be balanced
by cutting spending and raising taxes. It is important to look past the theory to see the
results of austerity in practice and understand austerity as a social-historical force. To do
this, one must define austerity from the perspective of its victims.
Pablo Iglesias, leader of the Podemos party in Spain, in his February 17 appearance on
the Democracy Now! show, did just that by arguing that austerity is when people are forced out
of their homes, when social services do not work, when public schools lack resources, when
countries do not have sovereignty and become the colonies of financial powers. He closes by
saying that austerity is the end of democracy, because without democratic control of the
economy, there is no democracy.
The State and Society
The nature of how the state affects society has been a contentious topic within left
traditions. Most notably, the debate between Ralph Miliband and Nicos Poulantzas that took
place in the pages of the New Left Review in the early 1970s refreshed the study of the
state. Miliband, in his The State in Capitalist Society , stressed an instrumentalist
position, arguing that the reproduction of capitalism in society is due to the socialization of
the ruling class in the tradition of capitalist dogma. As a large proportion of those who
dominate the state and control its levers come from an elite education (he was writing from the
perspective of British politics in the mid-twentieth century), it's no surprise that they
believe their theories to be correct and just, while the state they run serves the interests of
capital. The writings of Poulantzas, in particular Political Power and Social Classes ,
argued a structuralist position strongly influenced by the thought of Louis Althusser.
He claimed that the relation between the ruling class and the state was an objective
relation, meaning that the coincidence of bourgeois ideology with the ideology of the state was
a matter of how the system itself is organized. Their two state theories, the former arguing
that the state is an instrument of the ruling class and the latter arguing that the state is
the objective result of the capitalist system, shed light on the differences in conceptualizing
not only the capitalist state, but how the state relates to and is legitimized by society. Is
the market society a result of policies implemented by individuals in power who are trained in
a particular neoliberal tradition, or an objective outcome of capitalist social relations that
are the superstructural product of a system?
What could arguably be the genius of neoliberalism is the way in which it takes these two
approaches to state theory and blends them. On the one hand, for Miliband, the neoliberal state
is the extension of ruling-class free-market ideology, propagated by government bureaucrats,
military officials, and technocrats who can speak no other language than that of the privileged
status of capital and who hold the belief that they are serving the greater good. On the other
hand, as Poulantzas suggested, neoliberalism needs to ensure its own survival by bending civil
society, political institutions, and democracy to its will.
A state that so blatantly puts the rights and needs of one small class of citizens over
others cannot be installed without a struggle. And further analysis shows us that once
neoliberal regimes come into power, a certain degree of social engineering and coercion are
necessary in order to guarantee the submission of the population and ensure the smooth
accumulation of capital.
In what follows, I would like to lay out how neoliberal austerity regimes were installed,
and also draw on hypotheses of how they are maintained. However, as each socio-political system
is unique in its history, culture, norms, and traditions, the manifestation and maintenance of
the neoliberal state differs depending on whether we are talking about core countries or
peripheral ones, to use the terminology of World Systems Theory. The common denominator is the
empowering of elites over the masses with the assistance of international forces through
military action or financial coercion -- a globalized dialectic of ruling classes.
Peripheral Neoliberal States
In the periphery, those countries that have been dominated by colonial and neocolonial
developed countries, economic and political trends beginning in the 1970s show that
neoliberalism has been installed by the use of force. The Latin American experience
demonstrates how neoliberalism was established through military operations and coups
d'état. In Chile, the democratically elected president Salvador Allende was overthrown
and the U.S.-backed dictatorship of Augusto Pinochet proceeded to crush labor unions and
popular movements, privatizing a chunk of the public sector. When Pinochet stepped down,
initiating a transition to democracy, he left behind the constitution that he had signed and
put in place after the coup. Demands to chip away at this "constitution of the dictatorship,"
as it is referred to in Chile, are present in Chilean social movements, most recently the
student movements seeking to reform the deeply unequal private higher education system. The
reforms that were the bedrock of a reactionary counter-revolution in the country were brought
about through force, violence, and physical coercion as seen in the torture and systematic
repression of the regime's opponents.
The maintenance of such a regime could only be guaranteed through the dissolution of civil
society to ensure that all avenues of dissent were illegal. Political representation in the
National Congress was impossible because it was dissolved as civil liberties were proscribed.
Organizations of a civil society, including unions, political parties, and groups set up by the
Catholic Church to tend to the needs of the families of the disappeared, were treated as
opposition organizations and were forbidden. It is estimated that tens of thousands of Chileans
were tortured, while up to 200,000 were exiled, shocking the population into submission through
fear. The laws regulating dissent were so strict that when the plebiscite was held to
transition to democracy, special arrangements needed to be made to allow political groups the
ability to organize and campaign, an attempt to reinvigorate a minimal civic culture in the
country.
While Chile was the first and one of the main examples of the growth of neoliberalism, it
has been far from unique. Economic "shock therapy" has become central to U.S. foreign policy,
from Argentina in 1976 to the reintegration of post-communist states into the global capitalist
economy. A quick comparison between countries listed as "not-free" by Freedom House and those
that employ free-market neoliberal policies stresses this point. From Kazakhstan and Azerbaijan
in Central Asia, to the crisis-ridden state of Mexico, and the neoliberal reforms of dictators
in the Middle East and North Africa, the notion that capitalism and democracy form a symbiotic
relationship and support each other has been debunked. The dissolution of civil society goes
hand in hand with the imposition of a neoliberal state through violence, in order to ensure
that threats to the state's activities remain unchallenged.
Core Neoliberal States
In core countries, meanwhile, austerity and authoritarianism follow a different pattern.
There, neoliberal political systems have been created through financial coercion and are held
hostage by financial interests due to the economic "necessities" created by bankruptcies and
budget deficits. The test in this case is New York City, where the consequences of the
depression of 1974-75 run deep. Kim Moody, in From Welfare State to Real Estate , traces
the political and economic alliance that took advantage of social pressures from
deindustrialization, white flight, and global economic crisis to implement the reforms that
would give rise to a complete transformation of the city's social fabric. His analysis shows
how a united business elite was able to thwart the democratic interests of the city's working
classes by using the budget, the deficit, and financial coercion to rein in what they saw as an
unsustainable welfare state. A crisis regime was put in place representing a business class
unified in its desire to reshape the social democratic polity of New York City, using the city
government to achieve this transformation. What began as a move by bankers to shut the city out
of the bond market evolved by 1975 into the establishment of the Emergency Financial Control
Board, which set its sights on imposing tuition on the City University of New York system,
increasing the fares for mass transit, and limiting welfare payments. It's a story that has
become all too familiar in the twenty-first century and a tactic that is being replayed in
other cities, states, and nations.
Given the history of uninterrupted constitutional rule in the United States, the
installation of neoliberalism requires the engineering of society through the transformation of
institutions. By giving the market the freedom to determine when wages will be lowered, when
jobs will be shed, and when communities will be destroyed, while simultaneously dismantling
social welfare programs to increase the market's authority, a social crisis is produced that
requires a police force to maintain order. This relationship has inspired the work of
sociologist Loïc Wacquant for two decades. Combining a Marxist materialist approach to
observe the socio-economic conditions that have influenced the growth of the American penal
system with a Durkheimian symbolic perspective, which stresses how the prison serves as a
symbol of disciplining power, his work Punishing the Poor argues that the expansion of
correctional facilities should be seen as correlated with the rise of the neoliberal state. He
notes how "welfare reform" corresponded with the expansion of the imprisoned population,
signaling a shift in how contemporary neoliberal society treats the most vulnerable among us.
This means that not only do prisons and jails serve as the place to physically keep those who
have been convicted of criminal behavior, but they also serve as an alternative source of
labor-power harvesting. The Thirteenth Amendment to the U.S. Constitution explicitly allows
penal labor, and while this has historically been organized by state-run corporations such as
UNICOR, recent legislation allows the private sector to tap into the penal labor pool. Meant as
an alternative to outsourcing, this practice is referred to as "smart-sourcing" (see
www.unicor.gov/services/contact_helpdesk/).
The consequences of neoliberal reform and the penal society in the United States are related
in more ways than one. While prisons are filled with those who have been affected by the
welfare-to-workfare policies and war-on-drugs-era sentencing laws of the 1980s and 1990s,
prisons are also an example of the process of privatizing government institutions and insuring
that those institutions create profit for private investors, making the neoliberal state an
agent in this wealth redistribution. The process of regulatory capture, where special interests
are able to control the agencies that are supposed to be regulating them in the public
interest, illustrates this point. While the market dictates the scope of what is possible for
state institutions that are beholden to government funding, the market also creates the
conditions, during periods of financial crisis, that lead to the bankrupting of state
institutions through austerity measures and the privatization of these public assets.
Europe has also been subjected to the establishment of neoliberalism through financial
coercion; however, the European case presents us with an instance of unprecedented democratic
subversion on behalf of international capital. This is not to say that the establishment of
neoliberalism has been imposed from the outside with no domestic encouragement, but rather that
Europe presents us with a particular case of an alliance between the bourgeoisie of individual
European nation-states and their counterparts in international institutions such as the
European Union (EU) and the European Central Bank (ECB). The rise of the political party Syriza
in Greece and the election of Alexis Tsipras as prime minister, while nurturing a cautious
hope, has also shown the extent to which the democratic aspirations of the citizens of Greece
are sabotaged for the benefit of financial interests represented by the European Commission,
the ECB, and the International Monetary Fund. The sovereignty of European countries is being
attacked by advocates of neoliberalism under the guise of EU and ECB policy. In Italy, the
technocratic government of Mario Monti was appointed without an election following the
resignation of Silvio Berlusconi. Meanwhile in Ireland, the ECB held the democratically elected
government in a stranglehold by attaching a series of austerity conditions to any bailout
agreement. In practice, democratic demands must be made within the tight parameters that have
been established by bankers, making a mockery of democracy itself.
The manifestation and maintenance of neoliberalism in Europe can be understood through the
changing notions of citizenship in European countries. While at one time the citizenry was the
sole constituency, a new group has evolved that claims dominance over the nation-state:
creditors. According to the German political economist Wolfgang Streeck, in his work Buying
Time: The Crisis of Democratic Capitalism , the growth of creditors has placed a strain on
the state, allowing unelected and anti-democratic authorities to regulate how the state handles
its relations with its citizens, and defining the nature of state-society relations. The
introduction of this "constituency" of opposing interests into the political equation holds the
polity of Europe within a loop. On the one hand, the government is supposed to be
representative of the people, while on the other, international forces are recognized as
citizens and therefore claim a voice in how the government conducts its business. While the
neoliberal state was imposed through financial coercion, it is maintained through the creation
of new political constituencies.
Conclusion
By blending the state theories of Miliband and Poulantzas, we are able to see the neoliberal
state in a multidimensional form. It is not solely the result of the decisions of those in
power, but also a complex system that constructs its own acquiescence. The neoliberal state is
a qualitatively distinct form of the capitalist state. Its authoritarianism is present not only
in its unquestioned defense of the interests of capital, but also in the way that it actively
seeks to shape society to be more favorable to its goals. Peripheral countries have borne the
burden of this violence as their position within the world system is secondary and practically
dispensable. Core countries require a much more skilled intervention through the introduction
of reforms and the transformation of institutions to solidify obedience in the form of the
market society. Austerity, understood as a social-historical force, is the tool of the
neoliberal state to subvert democracy and promote authoritarianism.
They know, however, that they've been conned, played, and they're absolute fools in the
game.
Thank you Mr. Black for the laugh this morning. They know exactly what they have been
doing. Whether it was deregulating so that Hedge funds and vulture capitalism can thrive, or
making sure us peons cannot discharge debts, or making everything about financalization. This
was all done on purpose, without care for "winning the political game". Politics is
economics, and the Wall Street Democrats have been winning.
For sure. I'm quite concerned at the behavior of the DNC leadership and pundits. They are
doubling down on blatant corporatist agendas. They are acting like they have this in the bag
when objective evidence says they do not and are in trouble. Assuming they are out of touch is
naive to me. I would assume the opposite, they know a whole lot more than what they are letting
on.
I think the notion that the DNC and the Democrat's ruling class would rather lose to a
like-minded Republican corporatist than win with someone who stands for genuine progressive
values offering "concrete material benefits." I held my nose and read comments at the kos straw
polls (where Sanders consistently wins by a large margin) and it's clear to me that the
Clintonista's will do everything in their power to derail Bernie.
Keynes' "animal spirits" and the "tragedy of the commons" (Lloyd, 1833 and Hardin, 1968)
both implied that economics was messier than Samuelson and Friedman would have us believe
because there are actual people with different short- and long-term interests.
The behavioral folks (Kahnemann, Tversky, Thaler etc.) have all shown that people are even
messier than we would have thought. So most macro-economic stuff over the past half-century has
been largely BS in justifying trickle-down economics, deregulation etc.
There needs to be some inequality as that provides incentives via capitalism but
unfettered it turns into France 1989 or the Great Depression. It is not coincidence that the
major experiment in this in the late 90s and early 2000s required massive government
intervention to keep the ship from sinking less than a decade after the great unregulated
creative forces were unleashed.
MMT is likely to be similar where productive uses of deficits can be beneficial, but if the
money is wasted on stupid stuff like unnecessary wars, then the loss of credibility means that
the fiat currency won't be quite as fiat anymore. Britain was unbelievably economically
powerfully in the late 1800s but in half a century went to being an economic afterthought
hamstrung by deficits after two major wars and a depression.
So it is good that people like Brad DeLong are coming to understand that the pretty
economic theories have some truths but are utter BS (and dangerous) when extrapolated without
accounting for how people and societies actually behave.
I never understood the incentive to make more money -- that only works if money = true value
and that is the implication of living in a capitalist society (not economy)–everything
then becomes a commodity and alienation results and all the depression, fear, anxiety that I
see around me. Whereas human happiness actually comes from helping others and finding meaning
in life not money or dominating others. That's what social science seems to be telling us.
" He says we are discredited. Our policies have failed. And they've failed because
we've been conned by the Republicans."
That's welcome, but it's still making excuses. Neoliberal policies have failed because
the economics were wrong, not because "we've been conned by the Republicans." Furthermore, this
may be important – if it isn't acknowledged, those policies are quite likely to come
sneaking back, especially if Democrats are more in the ascendant., as they will be, given the
seesaw built into the 2-Party.
Might be right there. Groups like the neocons were originally attached the the left side of
politics but when the winds changed, detached themselves and went over to the Republican right.
The winds are changing again so those who want power may be going over to what is called the
left now to keep their grip on power. But what you say is quite true. It is not really the
policies that failed but the economics themselves that were wrong and which, in an honest
debate, does not make sense either.
"And they've failed because we've been conned by the Republicans.""
Not at all. What about the "free trade" hokum that DeJong and his pal Krugman have been
peddling since forever? History and every empirical test in the modern era shows that it fails
in developing countries and only exacerbates inequality in richer ones.
That's just a failed policy.
I'm still waiting for an apology for all those years that those two insulted anyone who
questioned their dogma as just "too ignorant to understand."
It's intriguing, but two other voices come to mind. One is Never Let a Serious Crisis Go To
Waste by Mirowski and the other is Generation Like by Doug Rushkoff.
Neoliberalism is partially entrepreneurial self-conceptions which took a long time to
promote. Rushkoff's Frontline shows the Youtube culture. There is a girl with a "leaderboard"
on the wall of her suburban room, keeping track of her metrics.
There's a devastating VPRO Backlight film on the same topic. Internet-platform
neoliberalism does not have much to do with the GOP.
It's going to be an odd hybrid at best – you could have deep-red communism but enacted
for and by people whose self-conception is influenced by decades of Becker and Hayek? One place
this question leads is to ask what's the relationship between the set of ideas and material
conditions-centric philosophies? If new policies pass that create a different possibility
materially, will the vise grip of the entrepreneurial self loosen?
Partially yeah, maybe, a Job Guarantee if it passes and actually works, would be an
anti-neoliberal approach to jobs, which might partially loosen the regime of neoliberal advice
for job candidates delivered with a smug attitude that There Is No Alternative. (Described by
Gershon). We take it seriously because of a sense of dread that it might actually be powerful
enough to lock us out if we don't, and an uncertainty of whether it is or not.
There has been deep damage which is now a very broad and resilient base. It is one of the
prongs of why 2008 did not have the kind of discrediting effect that 1929 did. At least that's
what I took away from _Never Let_.
Brad DeLong handing the baton might mean something but it is not going to ameliorate the
sense-of-life that young people get from managing their channels and metrics.
Take the new 1099 platforms as another focal point. Suppose there were political measures
that splice in on the platforms and take the edge off materially, such as underwritten
healthcare not tied to your job. The platforms still use star ratings, make star ratings seem
normal, and continually push a self-conception as a small business. If you have overt DSA plus
covert Becker it is, again, a strange hybrid,
Your comment is very insightful. Neoliberalism embeds its mindset into the very fabric of
our culture and self-concepts. It strangely twists many of our core myths and beliefs.
This is nothing but a Trojan horse to 'co-opt' and 'subvert'. Neoliberals sense a risk to
their neo feudal project and are simply attempting to infiltrate and hollow out any threats
from within.
There are the same folks who have let entire economics departments becomes mouthpieces for
corporate propaganda and worked with thousands of think tanks and international organizations
to mislead, misinform and cause pain to millions of people.
They have seeded decontextualized words like 'wealth creators' and 'job creators' to
create a halo narrative for corporate interests and undermine society, citizenship, the social
good, the environment that make 'wealth creation' even possible. So all those take a backseat
to 'wealth creator' interests. Since you can't create wealth without society this is some
achievement.
Its because of them that we live in a world where the most important economic idea is
protecting people like Kochs business and personal interests and making sure government is not
'impinging on their freedom'. And the corollary a fundamental anti-human narrative where
ordinary people and workers are held in contempt for even expecting living wages and conditions
and their access to basics like education, health care and living conditions is hollowed out
out to promote privatization and become 'entitlements'.
Neoliberalism has left us with a decontextualized highly unstable world that exists in a
collective but is forcefully detached into a context less individual existence. These are not
mistakes of otherwise 'well meaning' individuals, there are the results of hard core ideologues
and high priests of power.
Two thumbs up. This has been an ongoing agenda for decades and it has succeeded in
permeating every aspect of society, which is why the United States is such a vacuous,
superficial place. And it's exporting that superficiality to the rest of the world.
I read Brad DeLong's and Paul Krugman's blogs until their contradictions became too
great. If anything, we need more people seeing the truth. The Global War on Terror is into its
18th year. In October the USA will spend approximately $6 trillion and will have accomplish
nothing except to create blow back. The Middle Class is disappearing. Those who remain in their
homes are head over heels in debt.
The average American household carries $137,063 in debt. The wealthy are getting richer.
The Jeff Bezos, Warren Buffett and Bill Gates families together have as much wealth as the
lowest half of Americans. Donald Trump's Presidency and Brexit document that neoliberal
politicians have lost contact with reality. They are nightmares that there is no escaping. At
best, perhaps, Roosevelt Progressives will be reborn to resurrect regulated capitalism and debt
forgiveness.
But more likely is a middle-class revolt when Americans no longer can pay for water,
electricity, food, medicine and are jailed for not paying a $1,500 fine for littering the
Beltway.
A civil war inside a nuclear armed nation state is dangerous beyond belief. France is
approaching this.
"... He apparently still sees neoliberalism as way to "control capitalism's worst tendencies," when in fact neoliberalism is capitalism on steroids. In other words, he's completely lost. ..."
"... Black seems to be seeing a change of heart where there is simply a temporary surrender until the coalition of " neoliberal shills" can infiltrate and then overthrow again the "left policies that are bound to lead to destruction". ..."
"... And he seems to be blaming the blue dogs for not drumming into the plebs' heads that the former Presidents' (Clinton/Obama's) policy were great in order that the coalition grew. This was not a mea culpa. It was Delong's realistic strategy outline for neoliberal's continuance. And perhaps, a thinly veiled request for a policy position for himself or his son in any new lefty administration. ..."
"... Wasn't DeLong the economist so threatened to kneecap any academic economist and policy wonk who went against Hillary in the last election? He sounds practically mafiaso in this post . ..."
"... It's hard to take DeLong seriously. Contrary to what he says, the GOP and Dems have worked closely and successfully to implement neo-liberalism in America. ..."
"... My feeling is DeLong and the neo-liberal donor class are already conceding the 2020 election; seeing it as a repeat of the 1984 Mondale debacle. They want the young socialist side of the Democratic Party to take the blame, so in 2024 the donor class can run a candidate pushing new and improved neo-liberalism. Trump seems to be making the same calculation as he moves away from his populist/nationalist policies to become just another in a long line of Koch brother GOP neo-liberal stooges. ..."
"... Brad DeLong is brilliant, yet pushed the magical thinking of neoliberalism for 30 years. Am I missing something here? ..."
"... the university professors, who teach but do not learn. ..."
"... But when it came to Hillary running for President in 2016, DeLong fell in line and endorsed her, despite HRC's bad ("complete flop"?) decisions along the way as Senator and SOS (Honduras, Libya, Iraq, Syria and Ukraine, Wall Street Speeches and Clinton Foundation grift). Can DeLong be trusted? ..."
MARC STEINER: So I mean, there's one quote that kind of sums up for me. When he
wrote: "Barack Obama rolls into office with Mitt Romney's healthcare policy, with John McCain's
climate policy, with Bill Clinton's tax policy, and George H.W. Bush's foreign policy. And did
George H.W. Bush, did Mitt Romney, did John McCain say a single good word about anything Barack
Obama ever did over the course of eight solid years? No f'n way he did not," is what he said.
Cleaned it up just a little bit. But that kind of sums up, in many ways, exactly what he was
saying.
BILL BLACK: Brad DeLong is brilliant. And he writes really well. And he has, in a
super short form, captured it exactly. All of Obama's key policies were the product of very
conservative views that are, on many economic fronts, literally to the right of these crazies
that are the Republicans who constitute the House and the Senate. And even when they're not to
the right of the crazies, they're way, way right, and they're inferior. Right? The progressive
policies are fundamentally superior. Market regulation is a terrible failure. It is
criminogenic.
I'll give you one example. He ends by saying wouldn't it be a wonderful thing if we could
use cap and trade to create an incentive for, you know, 20-plus million people to do the right
thing? Because again, the neoliberal view is if they do the right thing they will get a profit.
See? It'll all be wonderful. They'll all do the right thing. Except that it's vastly easier on
something like cap and trade to do the wrong thing. To lie, to commit fraud about whether
you're actually reducing the pollution, and collect the fees. And so he doesn't realize, still,
I think, that we are incentivizing not 20 million people to do the right thing, but literally 2
billion people to do the wrong thing. And you know, often that will be the result, the wrong
thing.
MARC STEINER: So, two final questions here. So in this–what's moving ahead
here. Let me just posit this. So how did Democrats and the left respond to this? We're about to
see an MSNBC clip from the CPAC meeting that took place in D.C. last weekend. And this is
clearly going to be part of their major attack in the coming elections. Think about this vis a
vis the long road. Let's watch this.
TED CRUZ: Look, I think there's a technical description of what's going on, which is
that Democrats have gone bat crap crazy.
MIKE PENCE: That system is socialism.
SEBASTIAN GORKA: That is why Alexandria Ocasio-Cortez has introduced the Green New
Deal. It's a watermelon. Green on the outside. Deep, deep red communist on the inside. They
want to take your pickup truck. They want to rebuild your home. They want to take away your
hamburgers. This is what Stalin dreamt about but never achieved.
MARC STEINER: So clearly this is going to be part of this strategy coming forth. I'm
thinking about the long road and how this fits in, because this clearly is going to be the
opposition, what they're going to start doing.
BILL BLACK: So literally, the watermelon guy, Gorka, is literally a Croatian
fascist.
MARC STEINER: No question. No question.
BILL BLACK: I mean the Ustase, the pro-Hitler Croatian fascists. So progressives
should take enormous comfort from Brad DeLong. He is one of the most influential economists. He
wasn't just a theorist. He actually was there designing and implementing these policies at the
most senior levels of the Clinton administration. And he says they are failures. They're
political failures and they're often economic failures. And he says the left is
composed–the progressive wing of the Democratic Party–of among the best people in
the world. Their policies are typically wonderful. Excellent for the world. We need to get
behind them. And the idea that we should continue to listen to the New Democrats, the Wall
Street Democrats, and take guidance from them, is preposterous; that they must exit the stage
and the baton must pass to the progressives to take the leadership role. And that they're doing
an excellent job of that, and should continue and expand that leadership
ok after reading the comments i'm discouraged again. delong isn't a signal of a sea change
of heart among neoliberals. but it's more friction for the neoliberals to cope with, and it
is useful politically. he did admit that the policies he had espoused were wrong, and that
the neoliberal view of the world was inaccurate. this isn't going to be easy for the krugmans
to ignore.
delong personally could be another david brock; time will tell, and how he responds to the
wave of criticism he will face from former colleagues.
DeLong gives a qualified support to MMT, saying that it's not foolproof but better than
the alternatives. As MMT-ers remind us, in political economy the policies are a different
matter.
Reminds me of a bit of physics theories, that an old one is retired when a newer theory
explains reality better. Except the old theorys were designed to conceal, not explain,
reality.
Thanks for this link. It was such a short, clear analysis. In econospeak it was like a
memo to a colleague. So Brad DeLong is on our list of good guys. How nice. The questions I am
left with are about the usefulness of interest rates at all, and I vaguely remember Randy
Wray saying stg. like 'interest rates should be kept very low to insure against inflation'
which makes sense. Interest rates themselves could be pushing bubbles. And then what exactly
are we talking about with the word "inflation"? I like (DeLong's or MMT's?) theory about
inflated assets (govt bonds here) – that prices stay within a balance because there are
fewer greater fools than we imagine. Maybe. But it might be nice to actually come up with a
better remedy if and when the SHTF. A fiscal means of adjusting the balance without harming
ordinary people. (MMT does this best.) The only method I know about is devaluing a currency
and keeping on as is. Nobody loses any value that way because more dollars balance out the
inflated values. But neoliberals are definitely batshit about currency devaluations. As if
money had some intrinsic value. Maybe it's just a trade thing – but if so, you'd think
it could be separated out from the rest of the uses of money. Maybe firewalls. So maybe I'll
read some more Brad. Thanks.
I'm not rejoicing about this, and having read the VOX interview, I don't quite understand
Steiner's and Black's enthusiasm. DeLong doesn't want to pass the baton at all -- he wants to
crapify valid and essential policies: expanded, improved Medicare for All, the Green New
Deal, MMT with a Job Guarantee, and a foreign policy not based on forever-wars. And that's
exactly what the neoliberals intend to do: crapification on a grand scale.
"Market-friendly neoliberals, rather than pushing their own ideology, should work to
improve ideas on the left. This, [DeLong] believes, is the most effective and sustainable
basis for Democratic politics and policy for the foreseeable future."
Hey, DeLong, listen up: expanded, improved Medicare for All, the Green New Deal, a federal
Job Guarantee, and a foreign policy (and defense budget) ending forever-wars are NOT ideas
that need improving. They ARE the improvements. Neoliberalism is dead, and we intend to bury
it.
No. It means argue with them, to the extent that their policies are going to be wrong and
destructive, but also accept that there is no political path to a coalition built from the
Rubin-center out. Instead, we accommodate ourselves to those on our left. To the extent that
they will not respond to our concerns, what they're proposing is a helluva better than the
poke-in-the-eye with a sharp stick. That's either Trumpist proposals or the current
status.
Basically he's saying we don't have the numbers and building a coalition with the right
hasn't worked, so now we should build one with the left. He's not actually saying the
progressive policies are better, just that they have a better chance of getting their agenda
forward with progressives than with conservatives.
The key to all of this from my perspective is they don't have the numbers. The American
empire is in accelerating decline. Every major system is broken and corrupt. Government can't
fix the problems. Populism elected Trump, and now voters will swing the other way looking for
the magic bullet. The corporatists choices are deliberate sabotage of the electoral system,
because good old fashioned corruption will no longer suffice, or capitulate to the left.
DeLong sounds like a trial balloon to me.
Read up on his Wikipedia entry and the following bit grabbed my attention-
"In 1990 and 1991 DeLong and Lawrence Summers co-wrote two theoretical papers that were
to become critical theoretical underpinnings for the financial deregulation put in place when
Summers was Secretary of the Treasury under Bill Clinton."
I would be very wary on any advice that he gives out myself.
He doesn't have to convince me, so it doesn't matter that he won't. But if he can convince
a few shaky Democrats on the less-right side that it's futile to try to reform the Republican
Party from within
Basically he's saying we don't have the numbers and building a coalition with the right
hasn't worked, so now we should build one with the left. He's not actually saying the
progressive policies are better, just that they have a better chance of getting their
agenda forward with progressives than with conservatives.
Exactly. He hasn't changed his neoliberal stripes. He in no way admits, or feels sorry
for, the incredible destruction neoliberal policies have wreaked on the masses here and
abroad. He apparently still sees neoliberalism as way to "control capitalism's worst
tendencies," when in fact neoliberalism is capitalism on steroids. In other words, he's
completely lost.
Although he has a wide audience and any change in his rhetoric can theoretically be
positive, there's no way he should be trusted. His change of opinion is not a substantive
change of heart. It's out of absolute necessity due to the incredible pressure exerted by
the grassroots. That pressure should never cease, or rest on its laurels, because the
Brad DeLong's of the world change their tune.
The thing to rejoice or be sad about is not whether DeLong abandons centrism and becomes a
leftist (or if you believe he has); it's whether the Left has a place at the table, which is
what he is acknowledging.
For years, the Centrists have ignored or hippy-punched the Left while bargaining with the
Right, which has pulled the Centrists ever-further to the right.
When a Centrist like DeLong says they should argue with the Left about lefty policies;
when he says Centrists should pass the baton to the Left, he is acknowledging they have power
now that must be reckoned with.
Acquiring enough power that the Establishment must treat with them should be the goal of
all people on the left. It's far more important than winning any specific election.
(Let's just skip over distinctions between 'left', 'liberal' and 'progressive' in reading
my comment. Those terms are entirely over-loaded and you can tell who I mean)
Forget "left," "right," and "progressive" and look at the actual policies that a group
brings to politics–that's where you will find what is best for the public. Try to list
T's policies and you will see what I mean.
I agree. Black seems to be seeing a change of heart where there is simply a temporary
surrender until the coalition of " neoliberal shills" can infiltrate and then overthrow again
the "left policies that are bound to lead to destruction".
Delong asserts that once these
neoliberal Econ policies work then this great coalition was going to feel less grinchy and
the trickling would indeed then have trickled. He blames the politics not the economics.
And
he seems to be blaming the blue dogs for not drumming into the plebs' heads that the former
Presidents' (Clinton/Obama's) policy were great in order that the coalition grew. This was
not a mea culpa. It was Delong's realistic strategy outline for neoliberal's continuance. And
perhaps, a thinly veiled request for a policy position for himself or his son in any new
lefty administration.
I'm not sure I agree with Prof. Black here either. Wasn't DeLong the economist so threatened to kneecap any academic economist and policy
wonk who went against Hillary in the last election? He sounds practically mafiaso in
this post .
"Mind you: The day will come when it will be time to gleefully and comprehensively trash
people to be named later for Guevarista fantasies about what their policies are likely to do.
The day will come when it will be time to gleefully and comprehensively trash people to be
named later for advocating Comintern-scale lying to voters about what our policies are like
to do. And it will be important to do so then–because overpromising leads to bad policy
decisions, and overpromising is bad long-run politics as well."
That doesn't seem like integrity to me. It appears to be more opportunistic. He'll happily
kick you whenever he thinks he can get away with it.
It's hard to take DeLong seriously. Contrary to what he says, the GOP and Dems have worked
closely and successfully to implement neo-liberalism in America. He cites ObamaCare? The GOP
pretended to be against it in order to win support from the less bright side of the political
left bell curve and to wean them away from things like the public option or single-payer. But
the GOP never went past Kabuki theatre to dismantle ObamaCare when they had the power to do
so.
DeLong gives no policy specifics outside of some boring carbon tax stuff. Will he support
protectionism? Single-payer? Nationalisation of Wall Street? Dismantling the US empire? Huge
punitive tax increases on the wealthy? These are all things the Democratic donor class (which
of course has a strong overlap with the GOP donor class) will never accept.
And what about ideas to deal with AI, deindustrialisation, automation, guaranteed income,
etc? And since neo-liberals are 100% committed to mass immigration policies that at the same
time increases total GDP but reduce per capita GDP; how will they react if progressive
finally wake up and realise that taking in millions of low skilled workers in a future where
demand for labour is radically reducing is a total recipe for disaster? Not to mention that
the welfare state they are proposing will be impossible without very strict immigration
policies, not to mention the terrible impact mass immigration has on the climate.
My feeling is DeLong and the neo-liberal donor class are already conceding the 2020
election; seeing it as a repeat of the 1984 Mondale debacle. They want the young socialist
side of the Democratic Party to take the blame, so in 2024 the donor class can run a
candidate pushing new and improved neo-liberalism. Trump seems to be making the same
calculation as he moves away from his populist/nationalist policies to become just another in
a long line of Koch brother GOP neo-liberal stooges.
The problem is that Trump's radical energy and ideas seduced many Americans who are now
disappointed with his decidedly low-energy accomplishments. Basically the only campaign
promises he kept were those he made to the Israel lobby. Now Trump is conceding the high
energy and new idea ground to the Democratic left. He is switching from radical to
establishment. This will open the door to say Bernie Sanders to win in 2020. But you can rest
assured that the most voracious opponents that Bernie will have to get past will be Brad
DeLong and the Democratic donor class when they realise this just might not be 1984 all over
again.
Brad DeLong is brilliant, yet pushed the magical thinking of neoliberalism for 30 years.
Am I missing something here? Is Bill Black patting him on the back because he's brilliant at
sophistry?
Back 15 years or so ago, I read DeLong's blog daily, trying to learn more economics than I
know. I quit because it didn't make any sense. I remember there being these broad principles,
but they had to be applied in a very narrow sense. One I remember vividly was DeLong's
objections to consumer boycotts of foreign goods to end abuse of workers. These boycotts are
counterproductive, he opined, and therefore you are just hurting the people you're trying to
help. You should just shop as normal. So, I presume he regarded it as all right for me to
choose products that are the color I want, the size I want, the whatever I want, except for
the way it's produced I want. He did not like considerations of right and wrong among the
people.
DeLong has always been among the most thoughtful of centrists. He reminds me of people I
know who are instinctively quite left wing but who's instincts are even stronger to stay
within their own particular establishment circle and to side with the winners. Back in the
1990's I knew a few formerly left Labour supporters who became cautious Blairites (or at
least Brownites). Some were opportunists of course, but some put it simply – 'I'm tired
of losing. The reality is that a pure left wing government will not get elected under current
conditions, we've proved this over decades. The only way we can protect the poor and
vulnerable is to make peace with at least some of the capitalists, and remake ourselves as
the party of growth and stability. If we can achieve growth, we can funnel as much as
possible as this to the poor'.
What he seems to be saying is that the left wing analysis (economically and politically)
is at least as intellectually tenable as those in the Centre and right, even if he has his
doubts. He is honest enough to know that the political strategy of making common cause with
'moderate' Republicans hasn't worked and won't work. And he doesn't see 'the Left' as any
worse than so called moderates or centre right (which of course distinguishes him from many
Dems). So he is seeing the way the wind is blowing and is tacking that way. Essentially, he
is recognising that the Overton Window is shifting rapidly to the left, and as a good
centrist, he's following wherever the middle might be.
Whatever you think of his motivations (and from my reading over the years of his writings
I think he has a lot more integrity than most of his colleagues. and is also very smart), the
reality is that a successful left wing movement will need establishment figures like him to
be 'on board'. Of course, they'll do their best to grab the steering wheel – the task
is to keep them on board without allowing them to do that.
The 'first step' is to admit you have a problem, and it's obvious that those of us
who self-identify as progressives, if not socialists, have taken that step, admitting that as
democrats, we have a problem.
The eleven-dimension game that we were sold, and that we so wishfully believed in, turned
out to be a massive delusion, and ultimately an empty promise on the part of the democratic
leadership.
The ' powder ' was kept dry, but ultimately stolen.
We were left defenseless, and became prey, and third-way democrats are the architects of
our collective loss.
I'm taking DeLong at his word.
He may be the exception that proves the rule, and the Clinton wing of the democratic party
may yet wrong-foot us, continue to mis-lead, and capitulate in the face of the enemy, but it
strikes me as totally to be expected that reality should eventually dawn on at least a few of
the folks responsible for the epic failures of democratic leadership.
I'm a big fan of that old saw, 'Lead, follow, or get out of the way' , democrats,
fearful after losing to the likes of Reagan, decided to follow, and now find themselves as
lost as the rest of us.
It doesn't strike me as totally impossible that a few of them might decide to ' get out
of the way ', if only to be able to face themselves in the mirror.
>MARC STEINER: You–do you think that the Wall Street Democrats, folks who are in
the investment world, along with the Chuck Schumers of the world, are going to acquiesce? ..
but are actually going to take seriously what DeLong said? -- -- -
>BILL BLACK: No, but that's because Brad DeLong has vastly more integrity than they do.
They know, however, that they've been conned, played, and they're absolute fools in the
game.
For as long as Black has been around, I would not expect him to argue that "Wall Street
Democrats" have been "conned, played, and they're absolute fools in the game". Democrats such as Schumer, HRC, and Obama are in on the con and are not "absolute
fools". They have the money and power to show that they were not working for chump change.
I agree. I see no evidence that people Wall Street/corporate Democrats have collectively
been "fooled" by Republicans. Take Obamacare for example, Obama mumbled some "facts" about
health-care briefly at the beginning of the process and never mentioned anything like how
much the US spends relative to other OECD countries which, with his bully-pulpit, he could
have done to create a more reasonable system. All he would have to have done is cite
statistics, studies, facts, facts, facts, facts about other health-care systems and the
obvious corruption, inefficiency or our own. He could easily have gotten some equivalent of
the "public option" or a more managed system like in continental Europe had he hammered away
at FACTS.
I don't think Obama ever had any intention of changing health-care from a profit-making
industry to a public utility like what the rest of the world enjoys. I don't think Obama ever
had any intention of being anything but a center-right (not a centrist) POTUS. I don't buy
into this "we were fooled" argument.
Guys like DeLong may have been fooled but I believe,
more likely (and I know the Washington milieu), he pulled the wool rather intensively over
his own eyes as many brilliant people did in the Clinton/Obama administrations because it was
a good career move. I don't, btw, believe this was directly and consciously a deliberate
plan–I believe it was something to do with a profound ignorance on the part of many if
not most Washingtonians (and indeed most intellectuals in the USA) of the role of the
unconscious in the psyche. I've seen it. A big player (a family friend) from the Clinton era
went into Big Pharma thinking he could "do good" and he was sincere about it. But I also knew
he liked money and the lifestyle that it brings–later he said that he was fooled after
six or seven years of lavish salaries.
I noticed that too. Black often strikes me as having a very crude framework that is either
naivete or (more likely imo) bad faith and intentional misleading. It's just too much of a
cartoon to be believed, even if (like me) you're not an insider who personally knows the
players (as Black does DeLong.)
Repubs are "crazies" while Progressives have "wonderful, superior" policies. Ok sure This
is not much more sophisticated thinking than team Red or team Blue that you get from your
Aunt Irene or somebody.
"TIME TO POUND MY HEAD AGAINST THE WALL ONCE AGAIN"
" My two cents' worth–and I think it is the two cents' worth of everybody who worked
for the Clinton Administration health care reform effort of 1993-1994–is that Hillary
Rodham Clinton needs to be kept very far away from the White House for the rest of her life.
Heading up health-care reform was the only major administrative job she has ever tried to do.
And she was a complete flop at it. She had neither the grasp of policy substance, the
managerial skills, nor the political smarts to do the job she was then given. And she wasn't
smart enough to realize that she was in over her head and had to get out of the Health Care
Czar role quickly."
But when it came to Hillary running for President in 2016, DeLong fell in line and
endorsed her, despite HRC's bad ("complete flop"?) decisions along the way as Senator and SOS
(Honduras, Libya, Iraq, Syria and Ukraine, Wall Street Speeches and Clinton Foundation
grift). Can DeLong be trusted?
Can't say whether DeLong can be trusted but I can imagine him remembering Keynes' famous
line about changing his opinion when new information becomes available. That said, I can not
imagine what new information may have come about, aside from Trump's unexpected wrecking of
main stream Republicans, that had him change his mind about HRC. Her truth has been evident
for decades and the more power she amassed over those years only made her truth ever more
execrable.
They know, however, that they've been conned, played, and they're absolute fools in the
game.
Thank you Mr. Black for the laugh this morning. They know exactly what they have been
doing. Whether it was deregulating so that Hedge funds and vulture capitalism can thrive, or
making sure us peons cannot discharge debts, or making everything about financalization. This
was all done on purpose, without care for "winning the political game". Politics is
economics, and the Wall Street Democrats have been winning.
For sure. I'm quite concerned at the behavior of the DNC leadership and pundits. They are
doubling down on blatant corporatist agendas. They are acting like they have this in the bag
when objective evidence says they do not and are in trouble. Assuming they are out of touch
is naive to me. I would assume the opposite, they know a whole lot more than what they are
letting on.
I think the notion that the DNC and the Democrat's ruling class would rather lose to a
like-minded Republican corporatist than win with someone who stands for genuine progressive
values offering "concrete material benefits." I held my nose and read comments at the kos
straw polls (where Sanders consistently wins by a large margin) and it's clear to me that the
Clintonista's will do everything in their power to derail Bernie.
Daily Kos is like a yoga session compared to all of the Obots and Clintonites on Balloon
Juice. One particular article "writer" there by the name of Annie Laurie is a textbook
example of said Clinton die-hards and she whips up all of her cohorts into a rabid,
anti-Sanders frenzy every time she posts.
Despite all of the complaining about Trump, I am sure that these neoliberals and
identitarians would pine for the days of his administration and pal around with ex-president
Trump much like they did with W. Bush. If Saint Harris or Saint Biden lose they will fail to
shield the take-over of the political leadership of the unwashed masses of ignorant peasants
who elected Sanders or Gabbard. Then places like Daily Kos and Balloon Juice will bemoan the
fact that we did not listen to those who know what is best for us lowly knaves.
Though I like Bill Black a lot–seems like a very hip guy and has done marvelous work
for many years. However, my father got his second master's degree in economics around
1961–he did it as a career move. Eventually when I got old enough he told me that the
field was "bullshit" and based on false assumptions about reality, however, the math worked
so everyone believed in the field. Economics, as I looked into it is, indeed, a largely
bullshit discipline that should never have been separated from politics or other fields.
We have a kind of fetishistic attitude towards "the economy" which is religious. "It's the
economy, stupid" is an example of this fetish. I've talked to economists who really believes
that EVERYTHING is a commodity and all motivations, interests, all come down to some kind of
market process. This is utterly false and goes directly against what we've learned about
social science, human motivation including happiness studies.
Economics also ignores history–people are motivated more by myth than by facts on
the ground. This is why neoliberals are so confused when their models don't work. Thomas
Frank described how Kansans favored policies that directly harmed them because of religious
and cultural myths–this is, in fact, true everywhere and always has been. We aren't
machines as economists seem to believe. All economists, particularly those who rely on "math"
to describe our society need to be sent to re-education camps.
Keynes' "animal spirits" and the "tragedy of the commons" (Lloyd, 1833 and Hardin, 1968)
both implied that economics was messier than Samuelson and Friedman would have us believe
because there are actual people with different short- and long-term interests.
The behavioral folks (Kahnemann, Tversky, Thaler etc.) have all shown that people are even
messier than we would have thought. So most macro-economic stuff over the past half-century
has been largely BS in justifying trickle-down economics, deregulation etc.
There needs to be some inequality as that provides incentives via capitalism but
unfettered it turns into France 1989 or the Great Depression. It is not coincidence that the
major experiment in this in the late 90s and early 2000s required massive government
intervention to keep the ship from sinking less than a decade after the great uregulated
creative forces were unleashed.
MMT is likely to be similar where productive uses of deficits can be beneficial, but if
the money is wasted on stupid stuff like unnecessary wars, then the loss of credibility means
that the fiat currency won't be quite as fiat anymore. Britain was unbelievably economically
powerfully in the late 1800s but in half a century went to being an economic afterthought
hamstrung by deficits after two major wars and a depression.
So it is good that people like Brad DeLong are coming to understand that the pretty
economic theories have some truths but are utter BS (and dangerous) when extrapolated without
accounting for how people and societies actually behave.
I never understood the incentive to make more money–that only works if money = true
value and that is the implication of living in a capitalist society (not
economy)–everything then becomes a commodity and alienation results and all the
depression, fear, anxiety that I see around me. Whereas human happiness actually comes from
helping others and finding meaning in life not money or dominating others. That's what social
science seems to be telling us.
I read DeLong's piece in an airport last Tuesday, so I may have missed something (or I may
have read an abridged version). But I think Steiner and Black read a little too much into
it.
I interpreted DeLong's statement essentially as saying now neoliberals will have to make
policy by collaborating with the left rather than the right. And I certainly didn't get the
sense he was looking to the left to lead, but instead how neoliberals could co-opt the left,
or simply be "freeloaders".
So the position is not that neoliberals should abandon their policy beliefs. It's that you
need to reorient your understanding of who your coalition is.
Brad DeLong
Yes, but that's also relevant to policy beliefs, right?
.
.
We need Medicare-for-all, funded by a carbon tax, with a whole bunch of UBI rebates for the
poor and public investment in green technologies.
.
How does Bernie fit in here? Ever?
We already are paying more for the medical care that is being provided than what single
lpayer will cost. I am so tired of the "How are you gonna pay for it" stuff. We already are,
it's just a question of what bucket it comes from.
True, but there still has to be a way of transferring the funds from the "private" bucket
to the "government" bucket. MMT is one way of doing that, but still not acknowledged as a
possibility by the PTB – except for the military, of course.
I'd rather see it taken out of the military, since that would be a good thing in itself,
and the carbon tax (merely one of many measures, of course) rebated and/or used specifically
to remediate climate deterioration. Rebating a carbon tax both protects it politically and
corrects the harm that would otherwise be done to poor people.
Take it out if the property taxes that Muni's have to use to insure all of their
employees.
Take it out of all the money that business pays to health insurance.
Cut the military budget in half and tell a few if the tributaries "You are on your own".
Cut the Navy in half and police only the Pacific.. tell Europe they are on the hook for the
Atlantic and Mediterranean.
Start there and you will get pretty close to $3 Trillion.
Quoting DeLong: " He says we are discredited. Our policies have failed. And they've failed
because we've been conned by the Republicans."
That's welcome, but it's still making excuses. Neoliberal policies have failed because the
economics were wrong, not because "we've been conned by the Republicans." Furthermore, this
may be important – if it isn't acknowledged, those policies are quite likely to come
sneaking back, especially if Democrats are more in the ascendant., as they will be, given the
seesaw built into the 2-Party.
Might be right there. Groups like the neocons were originally attached the the left side
of politics but when the winds changed, detached themselves and went over to the Republican
right. The winds are changing again so those who want power may be going over to what is
called the left now to keep their grip on power. But what you say is quite true. It is not
really the policies that failed but the economics themselves that were wrong and which, in an
honest debate, does not make sense either.
"And they've failed because we've been conned by the Republicans.""
Not at all. What about the "free trade" hokum that Deong and his pal Krugman have been
peddling since forever? History and every empirical test in the modern era shows that it
fails in developing countries and only exacerbates inequality in richer ones.
That's just a failed policy.
I'm still waiting for an apology for all those years that those two insulted anyone who
questioned their dogma as just "too ignorant to understand."
It's intriguing, but two other voices come to mind. One is Never Let a Serious Crisis Go
To Waste by Mirowski and the other is Generation Like by Doug Rushkoff. Neoliberalism is
partially entrepreneurial self-conceptions which took a long time to promote. Rushkoff's
Frontline shows the Youtube culture. There is a girl with a "leaderboard" on the wall of her
suburban room, keeping track of her metrics. There's a devastating VPRO Backlight film on the
same topic. Internet-platform neoliberalism does not have much to do with the GOP. It's going
to be an odd hybrid at best – you could have deep-red communism but enacted for and by
people whose self-conception is influenced by decades of Becker and Hayek? One place this
question leads is to ask what's the relationship between the set of ideas and material
conditions-centric philosophies? If new policies pass that create a different possibility
materially, will the vise grip of the entrepreneurial self loosen? Partially yeah, maybe, a
Job Guarantee if it passes and actually works, would be an anti-neoliberal approach to jobs,
which might partially loosen the regime of neoliberal advice for job candidates delivered
with a smug attitude that There Is No Alternative. (Described by Gershon). We take it
seriously because of a sense of dread that it might actually be powerful enough to lock us
out if we don't, and an uncertainty of whether it is or not.
There has been deep damage which is now a very broad and resilient base. It is one of the
prongs of why 2008 did not have the kind of discrediting effect that 1929 did. At least
that's what I took away from _Never Let_. Brad DeLong handing the baton might mean something
but it is not going to ameliorate the sense-of-life that young people get from managing their
channels and metrics.
Take the new 1099 platforms as another focal point. Suppose there were political measures
that splice in on the platforms and take the edge off materially, such as underwritten
healthcare not tied to your job. The platforms still use star ratings, make star ratings seem
normal, and continually push a self-conception as a small business. If you have overt DSA
plus covert Becker it is, again, a strange hybrid,
Your comment is very insightful. Neoliberalism embeds its mindset into the very fabric of
our culture and self-concepts. It strangely twists many of our core myths and beliefs.
Thanks Jeremy! Glad you saw it as you are one of the Major Mirowski Mentioners on NC and I
have enjoyed your comments. Hope to chat with you some time.
This is nothing but a Trojan horse to 'co-opt' and 'subvert'. Neoliberals sense a risk to
their neo feudal project and are simply attempting to infiltrate and hollow out any threats
from within.
There are the same folks who have let entire economics departments becomes mouthpieces for
corporate propaganda and worked with thousands of think tanks and international organizations
to mislead, misinform and cause pain to millions of people.
The have seeded decontextualized words like 'wealth creators' and 'job creators' to create
a halo narrative for corporate interests and undermine society, citizenship, the social good,
the environment that make 'wealth creation' even possible. So all those take a backseat to
'wealth creator' interests. Since you can't create wealth without society this is some
achievement.
Its because of them that we live in a world where the most important economic idea is
protecting people like Kochs business and personal interests and making sure government is
not 'impinging on their freedom'. And the corollary a fundamental anti-human narrative where
ordinary people and workers are held in contempt for even expecting living wages and
conditions and their access to basics like education, health care and living conditions is
hollowed out out to promote privatization and become 'entitlements'.
Neoliberalism has left us with a decontextualized highly unstable world that exists in a
collective but is forcefully detached into a context less individual existence. These are not
mistakes of otherwise 'well meaning' individuals, there are the results of hard core
ideologues and high priests of power.
Two thumbs up. This has been an ongoing agenda for decades and it has succeeded in
permeating every aspect of society, which is why the United States is such a vacuous,
superficial place. And it's exporting that superficiality to the rest of the world.
I read Brad DeLong's and Paul Krugman's blogs until their contradictions became too great.
If anything, we need more people seeing the truth. The Global War on Terror is into its 18th
year. In October the USA will spend approximately $6 trillion and will have accomplish
nothing except to create blow back. The Middle Class is disappearing. Those who remain in
their homes are head over heels in debt. The average American household carries $137,063 in
debt. The wealthy are getting richer. The Jeff Bezos, Warren Buffett and Bill Gates families
together have as much wealth as the lowest half of Americans. Donald Trump's Presidency and
Brexit document that neoliberal politicians have lost contact with reality. They are
nightmares that there is no escaping. At best, perhaps, Roosevelt Progressives will be reborn
to resurrect regulated capitalism and debt forgiveness. But more likely is a middle-class
revolt when Americans no longer can pay for water, electricity, food, medicine and are jailed
for not paying a $1,500 fine for littering the Beltway.
A civil war inside a nuclear armed nation state is dangerous beyond belief. France is
approaching this.
Debt forgiveness is something we don't hear much about, even from the Bernie Sanders left.
Very important policy throughout history, as Michael Hudson has so thoroughly documented.
"... Buying beautiful clothes at full retail price was not a part of my childhood and it is not a part of my life now. It felt more illicit and more pleasurable than buying drugs. It was like buying drugs and doing the drugs, simultaneously."" ..."
"... "Erie Locomotive Plant Workers Strike against Two-Tier" [ Labor Notes ]. "UE proposed keeping the terms of the existing collective bargaining agreement in place while negotiating a new contract, but Wabtec rejected that proposal. Instead it said it would impose a two-tier pay system that would pay new hires and recalled employees up to 38 percent less in wages, institute mandatory overtime, reorganize job classifications, and hire temporary workers for up to 20 percent of the plant's jobs. ..."
"... Workers voted on Saturday to authorize the strike." • Good. Two-tier is awful, wherever found (including Social Security). ..."
"[S]hopping with T was different. When she walked into a store, the employees greeted her by name and began to
pull items from the racks for her to try on. Riding her coattails, I was treated with the same consideration, which is how I
wound up owning a beautiful cashmere 3.1 Philip Lim sweater that I had no use for and rarely wore, and which was eventually
eaten by moths in my closet.
Buying beautiful clothes at full retail price was not a part of my childhood and it is not a part of my life now. It
felt more illicit and more pleasurable than buying drugs. It was like buying drugs and doing the drugs, simultaneously.""
"Erie Locomotive Plant Workers Strike against Two-Tier" [
Labor
Notes ]. "UE proposed keeping the terms of the existing collective bargaining agreement in
place while negotiating a new contract, but Wabtec rejected that proposal. Instead it said it
would impose a two-tier pay system that would pay new hires and recalled employees up to 38
percent less in wages, institute mandatory overtime, reorganize job classifications, and hire
temporary workers for up to 20 percent of the plant's jobs.
Workers voted on Saturday to
authorize the strike." • Good. Two-tier is awful, wherever found (including Social
Security).
"... To borrow Henry Ford's quote: "It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning." ..."
"... Note to Larry, please follow this logic: Money is Fiat; Fiat is cooperation; Cooperation is fiscal control; and fiscal control is civilization. Nowhere in this chain of thought does debt; interest; austerity; or any of your other little techniques even exist. Those bizarre ideas exist in more primitive thinking about power and slavery and savage exploitation. You know the routine. ..."
Lawrence Summers, according to Lawrence Summers, is a "serious economist." He has just written an op-ed in the
Washington Post in which he seriously explains why Modern Money Theory -- as proposed by "fringe economists," as he calls them
-- is a recipe for disaster. I am going to leave it to the "fringe economists" to rebut Mr. Summers; (I'm confident that professors
Wray, Kelton, Tcherneva, Tymoigne, and Fullwiler can take care of that job quite easily). What I want to consider is something even
more fundamental: How is it that someone who presents himself as a "serious economist" can get away with speaking incoherently while
expecting us -- the everyday citizens of America -- to take what he is saying as true?
Here is Summers' first point about why MMT is a recipe for disaster: "Modern monetary theory holds out the prospect that somehow
by printing money, the government can finance its deficits at zero cost. In fact, in today's economy, the government pays interest
on any new money it creates, which takes the form of its reserves held by banks at the Federal Reserve. Yes, there is outstanding
currency in circulation, but because that can always be deposited in a bank, its quantity is not controlled by the government. Even
money-financed deficits cause the government to incur debt."
Yes, that's very clear and logical, isn't it? The government "prints" money and then pays interest on it? The interest it pays
become the "reserves" in the Federal Reserve system? And what exactly does that have to do with "outstanding currency in circulation"?
And what is it exactly that happens when that "outstanding currency" gets deposited in a bank? And if "money-financed" deficits cause
the government to incur debt, maybe we should think about financing our deficits with something other than money? These are all serious
economic questions.
Summers' incoherent rambling reminds me of another case of incoherent ramblings reported, coincidentally, in the same edition
of the Washington Post: Donald Trump's CPAC speech as evaluated by columnist
Eugene Robinson . Here are a few instances of Trump apparently giving his best impersonation of Lawrence Summers:
"When the wind stops blowing, that's the end of your electric. Let's hurry up. 'Darling -- Darling, is the wind blowing today?
I'd like to watch television, Darling.' No, but it's true . Now Robert Mueller never received a vote, and neither did the person
that appointed him. And as you know, the attorney general says, 'I'm going to recuse myself. I'm going to recuse.' And I said, why
the hell didn't he tell me that before I put him in? How do you recuse yourself?"
Lawrence Summers' second point about the fallacy of MMT goes like this: "Contrary to the claims of modern monetary theorists,
it is not true that governments can simply create new money to pay all liabilities coming due and avoid default. As the experience
of any number of emerging markets demonstrates, past a certain point, this approach leads to hyperinflation. Indeed, in emerging
markets that have practiced modern monetary theory, situations could arise where people could buy two drinks at bars at once to avoid
the hourly price increases. As with any tax, there is a limit to the amount of revenue that can be raised via such an inflation tax.
If this limit is exceeded, hyperinflation will result."
Really, that all must be true, because Summers is a serious economist. Didn't really know there were third world countries that
have been practicing Modern Money Theory for a long time -- but obviously it didn't work out well for them. And, clearly, you can't
tax people more than they possess, so that proves it: hyperinflation!
Donald Trump had more to ramble about as well: "And they showed -- they showed from the White House all the way down There were
people. Nobody has ever seen it. The Capitol down to the Washington Monument -- people. But I saw pictures that there were no people.
Those pictures were taken hours before . They had to walk with high-heels, in many cases. They had to walk all the way down to the
Washington Monument and then back. And I looked, and I made a speech, and I said, before I got on -- I said to the people who were
sitting next to me, 'I've never seen anything like this.'"
Lawrence Summers' third denunciation of MMT is as follows: "Modern monetary theorists typically reason in terms of a closed economy.
But a policy of relying on central bank finance of government deficits, as suggested by modern monetary theorists, would likely result
in a collapsing exchange rate. This would in turn lead to increased inflation, increased long-term interest rates (because of inflation),
risk premiums, capital fleeing the country, and lower real wages as the exchange rate collapsed and the price of imports soared."
But of course! That's all obvious, isn't it? Mr. Summers is just pointing it out. Exchange rates would collapse. It's the most
obvious thing any reader of his argument can easily grasp and understand -- and that means "risk premiums" too (which clearly nobody
wants).
At one point in his CPAC speech Donald Trump says this: "You know I'm totally off-script right now. And this is how I got elected,
by being off-script. True. And if we don't go off-script, our country is in big trouble, folks. Because we have to get it back."
What strikes me is that our country is, indeed, in big trouble -- but it's because the "script" that's being read to us by our
political leaders, commentators, and "serious economists" is nothing more than an incoherent babbling.
"somehow by printing money" is a significant tell -- the stupider the clichéd metaphor, the more incoherent the economics.
Summers in using that cliche is confusing currency with money, which error really ought to embarrass him, but obviously does not.
Summers' Op-Ed is bafflegab of the highest order. It's sad that that's what passes for informed commentary these days, but
I think for monetary issues that's always been the case. Any school that dares to teach monetary economics is defunded, exiled
to 2nd or 3rd tier status.
There has been a lot of pushback on this Op-Ed and Krugman's from unexpected sources (Forbes, Bloomberg). This response is
especially good:
Also, demonstrating what a careerist Krugman is: Paul Krugman to Bernard Lietaer: "Never touch the money system"
https://www.youtube.com/watch?v=Q6nL9elK0EY . (short – 44 sec.)
Krugman has been a member of the lobbyist group for the central bankers, the Group of Thirty (www.group30.org) ever since it
was founded by the Rockefeller Foundation back in 1978.
I read it 2 days ago and felt no compulsion to praise. Harvey includes some Summersian bullshit of his own. For example:
"Just as the President's daughter said days ago, people like to work. Quite right."
Harvey clearly does not live on the beach where the slacker-surfer lifestyle dominates. Likewise, it seems likely that he has
never had to manage human resources in a large organization where more than just a few workers are obviously not liking what they
are doing.
The biggest barrier to full-employment is that not everybody wants to work or at least work very hard. That causes co-worker
resentment, an unproductive workplace climate, and if ignored long enough, it can impair productivity to the extent that everybody
becomes out of work.
So, you don't consider surfing work? Perhaps you're right, but I don't consider lack of enthusiasm for bullshit jobs evidence
that people don't want to work.
The biggest barrier to full-employment is that not everybody wants to work or at least work very hard.
Thank God for those people, it makes my life so much easier. You wouldn't like working in a world where everyone and anyone
could replace you.
I've never worked in an environment where everyone pulled their own weight, but it's also true that we tend to hold others
to a higher standard than we hold ourselves.
wetsuits cost hundreds of dollars, my cheapest new board was an ellington for $400 like 15 years ago (no, it can't really be
that long ago?) My brothers quiver is easily worth $10,000, which is lucky for me because he can't ride them all at once. Not
to say there isn't a large transient population, beaches have bathrooms and showers, but the surfer/slacker may not be a real
thing?
also https://brandongaille.com/22-surfing-industry-statistics-trends/
FTL
#12. In a survey about surfing in the United Kingdom, surfers were disproportionally represented in managerial, professional,
or business-owning employment classes. Nearly 80% of surfers fit into these employment categories, compared to just 54% of the
general population. (Surfers Against Sewage)
#13. Surfers also have a higher level of education attainment compared to the general population. In the UK, 64% of surfers
reported having a higher education, compared to just 27% of the general population. (Surfers Against Sewage)
I thought it was notably good too, and clearly written. Agree or not, what he was saying was not in question, unlike Summers's/
Krugman's slippery stuff.
Larry Summers is on a list of people I've created where if I read or hear something they write or say and agree with it, I
go back and check my premise on said topic.
Have never had to do so with Summers. This entire editorial reeks of Upton Sinclair's famous quote "it's impossible to get
someone to understand something when his paycheck depends on him not understanding it."
John Harvey in Forbes takes Summers, Rogoff, and clown prince Krugman down point by point as well.
Because I have only a single college course in Macro (taken 40 years ago), I am hardly any kind of economist, certainly not
a serious one. But I do have some ability to parse a sentence and figure out the meaning–usually. Thanks for pointing out that
the garble I can make no sense of is just garble. I thought I was just one of the uninitiated and ignorant masses.
I am curious about the audience Summers had in mind when he wrote or uttered this. Who are they?
I think the important information is conveyed to his intended audience via the title – the rest of it is filler, to justify
printing it.
You're not alone in your interpretation of his column. I have enough confidence in my reading comprehension abilities to state
affirmatively that his column is full of Thomas Friedman-like gibberish.
In the UK, we have a what you may call reverse Churchill problem, i.e. Churchill provokes mixed emotions in the UK, but is
revered in the US. In the US, Summers provokes mixed emotions, but is revered in the UK, at least by the usual neo-liberal suspects.
God Forbid. The family blogger has even been floated as a potential successor to Carney, probably a ploy by his vermin acolytes
at the FT.
You will be delighted to hear that Summers' vicar on earth, or at least in the UK, New Labour family blogger Ed Balls was ousted
from the Commons and some of public life by Andrea Jenkins. Jenkins is an Ultra Brexiteer, but History will be kind to her for
sparing the long-suffering UK public from more of Balls. Oh, yes, she will be elevated to the Pantheon for that ouster alone.
Larry Summers, famous for stating that there is a "good economic case" to be made for exporting all our toxic waste to Africa.
Larry Summers, famous for claiming that there aren't more women in STEM fields because "girls are bad at math." Larry Summers,
beloved of neo-liberals everywhere.
Abstract: In OECD countries over the period 1980–2017, countries with lower debt-to-GDP ratios responded to financial distress
with much more expansionary fiscal policy and suffered much less severe aftermaths. Two lines of evidence together suggest
that the relationship between the debt ratio and the policy response is driven partly by problems with sovereign market access,
but even more so by the choices of domestic and international policymakers. First, although there is some relationship between
more direct measures of market access and the fiscal response to distress, incorporating the direct measures attenuates the
link between the debt ratio and the policy response only slightly. Second, contemporaneous accounts of the policymaking process
in episodes of major financial distress show a number of cases where shifts to austerity were driven by problems with market
access, but at least as many where the shifts resulted from policymakers' choices despite an absence of difficulties with market
access. These results point to a twofold message: conducting policy in normal times to maintain fiscal space provides valuable
insurance in the event of financial crises, and domestic and international policymakers should not let debt ratios determine
the response to crises unnecessarily. [emphasis added]
If only one of the authors had been in a position to shape the administration's response in early 2009
Not to mention the article published here on NC back in 2013:
The very thing that the former endowment chiefs had worried about and warned of for so long then came to pass. Amid plunging
global markets, Harvard would lose not only 27 percent of its $37 billion endowment in 2008, but $1.8 billion of the general
operating cash – or 27 percent of some $6 billion invested. Harvard also would pay $500 million to get out of the interest-rate
swaps Summers had entered into, which imploded when rates fell instead of rising. The university would have to issue $1.5 billion
in bonds to shore up its cash position, on top of another $1 billion debt sale. And there were layoffs, pay freezes, and deep,
university-wide budget cuts.
Churchill is revered in America by people whose memory only goes back to 1941 and even then, only plays the highlights.
This American thinks he was a war criminal many times over and in a just world would have died in a prison cell, but I recognize
I'm the minority in my country
I don't believe anyone is completely useless. Al Gore made a follow-up film "An Inconvenient Sequel" which mentioned, inter
alia, the likely failure of COP21 because India needed hundreds of gigawatts of new energy and the banks would dun them 13% on
loans plus 2% for the exchange if they opted for green energy. Gore got onto Summers and a deal was thrashed out that was satisfactory
to India. The country then signed the agreement along with the rest of the world. A man with that kind of clout with the hooligans
in banking as valuable.
I have considered Larry's presence in any political campaign the kiss of death, since Obama first ran for president. Fair warning,
contenders for 2020! You do not want to be seen so much as shaking Larry's hand in public!
MMT is what we do. We cycle like MMT says we should, we tax and sequester like MMT says we should, we devalue once a generation
as MMT says we should. We are MMT, Larry SUmmers is simply faking it to protect the Keynesian form of MMT. The difference between
Keynes and MMT? MMTers have no assumption about smooth trajectories.
This is all the most useless debate among economists I have seen, and I have watched a ton of useless debates in the ten years
of the last 'MMT' cycle. So, let us get on with the next MMT cycle, starting with a period of extraordinary means, followed by
Tax and sequester, then if we are lucky, we get a devaluation, in proper MMT order.
Bingo this guy gets it, we already print off a bunch of money to finance spending, lower interest rates to prop up spending
and decrease debt costs, etc. Except the way we do it now benefits the rich by forcing the rest of us to spend spend spend because
our money does nothing in the savings account. Meantime, the money gets pushed into stocks and bonds which benefits only a certain
class.
This essentially paves the way for MMT, which is just to reallocate who gets the benefit of this money printing from the rich
to the rest of us.
The current system clearly doesn't work, however, and the idea that we can just spend money we make up out of thin air as a
stable plan is nonsense. Just like it was in 2008, and just like it is now with a 23 trilliion national debt.
We want medicare for all, increase the payroll tax and a small income tax, and that will do it. Charge everyone a "premium"
for health coverage in their pay check that is far cheaper than what it is now, or let employers pay for it and get a tax deduction.
No need to print monopoly money for anyone–rich or poor. We are wealthy enough to afford this stuff.
This is really no different from the dust big tobacco kicked up for 30 years to deny cancer, or big oil and climate denialism:
there are a bunch of greedy b******s out there who have been making a killing off of looting, asset stripping and environmental
and social market externalities doing all they can to milk the last dollar from a completely rotten system.
Summers is pitching in to obscure perceptions of the rot that serves him so well.
Stop any significant % of the war machine spending $1T+ per year and spend it at home in the US on crushing the price of housing
and providing a jobs guarantee; you wouldn't be able to run from the economic boom anywhere
Look at what he did to Harvard! Wrecked its endowment by a stupid interest rate swaps bet. Harvard had to get rid of hot breakfasts
and an expansion in Alford as a result.
Disclaimer: I'm no economist as my degree is in electrical engineering.
I prefer to look at MMT as somewhat similar to a company issuing additional common and preferred stock.
The company, in this case is a government.
In this view, common stock issuance (that pays no dividend) is new currency issued and preferred stock issuance = US treasury
certificates that pay interest ( similar to a preferred stock dividend ).
One can argue that "the market" will not penalize a company (or government) when it raises funds via new stock issuance, IF
the proceeds are perceived will be invested wisely.
But if the new stock issuance proceeds are perceived to be used foolishly than one would expect the issuing "company" will
see the value of their preferred and common stock drop (as inflation decreases the value of its currency).
For example, if MMT minded US government issues new monetary "common/preferred stock" (creates new currency and issues treasury
securities) and uses this purchasing power to improve US infrastructure, improve the bloated USA healthcare/financial industries
or educates its people more cost effectively, then the global market could be completely happy with this use of the world's resources.
And the relative value of the US currency might be stable or even increase.
On the other hand, if the MMT minded US government issues more currency/securities and funds a destructive war, one might expect
the existing global holders of the USA's currency and securities to be disappointed and push the relative value down.
Just as a corporation has to have some sort of resources (IP, customer list, inventories, market dominance, new products in
development) that are valued for it to issue stock, a MMT minded government must be viewed as having resources and power.
For example, Haiti is a sovereign nation with its own currency, the Haitian gourde.
But I suspect Haiti will have a very difficult time using MMT (issuing gourde denominated securities) to improve its economy
as it is perceived has having few resources and a prior history of resource squandering corruption (Papa/Baby Doc Duvalier) .
I betcha that Haiti's debts are not in Gourdes but in Euros, Pounds, and Dollars. Most US debit to itself and foreign countries
in our own currency. As Mosler points out, inflation often hurts our trading partners worse than it does us.
I share your analogy 100% and I think this is the right way to present monetary theory (I don't want to say "modern" because
it is more than a century that it works like this already). Although, I would add a twist : the government also distributes dividends
in non monetary terms, by providing, say, free roads, free education or free healthcare ( In the preceding century, there were
actually railroads issuing bonds that paid interest with free tickets !)
Of course, the amount of "paid in kind" dividend is similar whether one holds one dollar in the pocket or a million, so it is
not popular with the wealthy class.
I think it is an important component to point out because one frequently encounters people who frequently complain that a dollar
today is worth less than a dollar yesterday, but forget that between yesterday and today, the government provided services to
the dollar holder regardless of him/her earning an income and paying taxes.
I was going to ask the serious question 'how did Larry Summers get to his esteemed position in the first place ?' Nothing
I've ever read by or about him over the years has indicated that he is anything but a second rate bluffer with a talent for impressing
other bluffers, and yet in many quarters he seems to be held in significant awe.
But mindful of the rules here about 'setting homework' I looked up his career in Wikipedia. It seems he was quite influential
in developmental economics, which no doubt led to his gig in the World Bank. So someone who is considered a Harvard expert in
development economics writes:
Lawrence Summers' second point about the fallacy of MMT goes like this: "Contrary to the claims of modern monetary theorists,
it is not true that governments can simply create new money to pay all liabilities coming due and avoid default. As the experience
of any number of emerging markets demonstrates, past a certain point, this approach leads to hyperinflation. Indeed, in emerging
markets that have practiced modern monetary theory, situations could arise where people could buy two drinks at bars at once
to avoid the hourly price increases. As with any tax, there is a limit to the amount of revenue that can be raised via such
an inflation tax. If this limit is exceeded, hyperinflation will result."
If someone talking in a bar said that, you'd consider him an idiot, or at best, someone who just hasn't read very much. And
yet a Harvard professor can, without embarrassment, write such nonsense. And still be taken seriously. It really is unbelievable.
The argument, shorn of the beebling and handwaving, does make some sense. A Haitian government, say, that tries to issue more
gourdes (HTG) to pay off a US$ (or ECU, or anything foreign) debt is going to find out that no number of gourdes will be enough.
It will have to be US$, and they will only be acquired on the terms the US$ creditor specifies. This has been true ever since
independence, when the whole world insisted that the Haitians buy themselves back from France.
They can used gourdes to mobilize their own efforts and their own resources, and hope to achieve something with those.
"A Haitian government, say, that tries to issue more gourdes (HTG) to pay off a US$"
That is a government creating its own currency, which it then has to exchange for another currency. That is roughly what Germany
was forced to do with after the massive WWI debts were forced on it and it went through hyperinflation. The issue is owing money
in another currency. MMT economists have said again and again that countries should try to avoid, if they can, owing money in
a foreign currency. Obviously, many poor countries have no option. Different than a government issuing bonds in its own currency.
If the Haitian government injected its own currency into the economy, then issued bonds in its own currency as a means of reaching
its central bank's targeted interest rate, and Haiti owed money in its own currency, that would be a good comparison to our situation.
Summers doesn't understand (or pretends not to) the problem of bringing up hyperinflation in places like Peru and Venezuela, or
the problems poor countries face in regards to external debt, versus what the situation is in the US. We are in no way comparable
to those countries or situations. It's absurd, and he knows better, or he should.
In regards to the debt of developing and underdeveloped countries; the big issue is the need for a massive debt write down
(among a host of other things). On that, Éric Toussaint's work is hugely important.
Even in this case -- the point is how much of your own currency can you create? The runaway debt inflation is just getting
the information the hard way. And it is irreversible, unless you can send out assassins to kill your off-shore debt holders.
If you can come up with a good idea of how much you can safely print, why borrow it? If there was just some academic profession
that could come up with useful answers to that question
"Even in this case -- the point is how much of your own currency can you create? "
This has been discussed many times. The broad limit is the productive capacity of the economy. Are we at full employment, are
we at full productive capacity? If the change in the money stock is proportionally larger than the value of the goods and services
created with that money, then you could have inflation. Could, because inflation is more complex than that. If the government
were to create a bunch of money (forget private credit creation for a second since we can't control that much right now), but
that money went to rich people that hoarded it, if it was used by companies to buy up their own shares, if it was used to buy
goods from other countries, if it was put in a tax shelter, among countless other things, that money wouldn't circulate around
the economy and wouldn't cause much inflation. It is possible for the government to create lots of money and for deflation to
set it. Happened after the crash in 1929, that was Friedman's argument as to why the Great Depression happened. He said that even
though the Fed was creating lots of money, the economy was contracting at a greater rate and so in real terms the money supply
was shrinking. Steve Keen responded to that and showed the problems with that argument, but this dynamic is well known. Private
banks creating credit money are a part of this and the crash in 1929 too. After the crash in 2007/2008, it is pretty well established
that while the government did create a lot of money, it didn't create enough and it didn't channel to the parts of the economy
that could have led to a recovery for working people. So, not only how much money is created, but where that money goes in the
economy, whether or not more stuff can be produced, expectations of the future, among other things, will determine inflation.
"If you can come up with a good idea of how much you can safely print, why borrow it? If there was just some academic profession
that could come up with useful answers to that question "
Not trying to be rude, but have you actually read MMT literature? Cause all this stuff is addressed. We don't borrow money
in the way you think. The government, the US government, doesn't need to borrow or tax in order to spend. The particular way we
have chosen to create money was developed decades ago, when we were on the gold standard and had either the value of dollars fixed
to an ounce of gold, or later all currencies fixed to the dollar which could be exchanged in a given amount for gold. We aren't
on gold anymore. We could just have the government spend the money into the economy and use taxes to manage inflation. We don't
have to issue bonds, and Wray I believe has said that states that have control over their own currencies shouldn't issue bonds
in this way anymore. But those bonds come with no risk at all (the government will not default on the bonds unless forced to by
politicians) and they accrue interest, so investors like them, especially when there is uncertainty. But we don't have to issue
bonds AFTER the government spends to manage inflation. My understanding is that the Fed is the buyer of last resort on the secondary
market for bonds, and those that take part in bond auctions are required to actually bid. I don't see why investors would all
of a sudden not like US bonds (it would have to be something with geopolitical implications) but even if they did, the situations
could be dealt with, and again, we don't need to even issue bonds in order to spend anyway. That is a radically different situation
than Haiti owing money in another currency and being massively in debt to other countries in other currencies, with little ability
to export value added goods that have strong terms of trade. Read up on the amount of debt owed by Haiti to France since the Haitian
revolution, and the amount of debt paid but still owed by developing and underdeveloped countries in the post-WWII era. You think
Summers cares? How in the world is that comparable to the US in 2019? It is ridiculous, and Summers knows it.
That is true and it's one of the key factors that can lead to hyperinflation. However, Summers isn't talking about that scenario.
Nothing in his argument mentions foreign currency denominated debt. He's simply claiming that there is some upper limit on deficit
spending beyond which the economy will automatically tip over into hyperinflation. I'd love to see him point out one instance
in history where that's happened without external factors like foreign currency debt playing a role. The closest thing I can think
of is credit bubbles, but those are self-correcting in the long run and can't spiral out of control like hyperinflation.
Wow, I'd no idea of that. Whatever about Samuelson (yes, I suffered through his textbook), Arrow did some very interesting
and incisive work. I guess Summers was, as the Vietnamese would say 'second rice crop'.
"I remember the fall night in 1972, after Kenneth was awarded the Nobel Prize. The other American Nobel Prize winner at that moment,
Paul Samuelson, also my uncle, hosted a party for Kenneth and the Cambridge economics community. I was a sophomore economics major
at MIT, so I was hardly appropriate company for such an august gathering, but I was a little unique in being related to both the
host and the honoree, so I was invited and I participated as best I could in the conversation."
Reminds me a scene in John Carpenter's Christine: "There's no smoking in this garage!" the owner says having gotten up from a card game where all his buddies are sitting around
a table waiting for him to rejoin them, as they all smoke." "Sir, those men over there are smoking. You better them them to stop."
"The difficulty lies, not in the new ideas, but in escaping from the old ones, which ramify, for those brought up as most of
us have been, into every corner of our minds."
And this from the author of the article:
"Those prominent economists aren't even so much rejecting MMT as holding tight to their own orthodox views. This is not necessarily
on purpose, but it's extremely difficult for anyone to make a paradigm shift. MMT, aka macroeconomics done properly, is, as Keynes
says, "extremely simple and should be obvious." The problem we have here is the difficulty in escaping from antiquated notions
of macro modeling (Krugman), inflation (Summers), and debt financing (Rogoff)."
I think one of the problems we have in this country and the world is that what we think of as the mainstream educational model
is actually socialization, indoctrination, brainwashing, and or ideological training. And then "jobs" are based on how well you
bought in to that brainwashing.
Various education reformers over the past decades such as Ivan Illich and John Taylor Gatto have mentioned similar critiques
of education in the US and the world in that our educational system does not foster problem solving and critical thinking.
It is my belief that our educational system creates a type of false self in people. In order to get the "right" answers and
do well on tests, etc, you have to compromise your truth, your experience, and your true self and allow yourself to be programmed
in the particular models of your profession.
Maybe in Summers, Hillary, and Trump's case, as they have gotten older that "programming memory/false self" is starting to
become fractured due to cognitive decline, physical issues, stress, fatigue, etc. and as they desperately try to regurgitate their
brainwashing it is coming out in an incoherent mess.
As Summers is only 64, before Yves jumps on me for equating cognitive decline with being older or in one's 60's I think it
is specific to each individual. I just turned 60 and my brain is as sharp as ever, it is my body that is slowing the train down!!
To illustrate my point, a while back I read Anthony Atkinson's book, Inequality: What Can Be Done? He mentions in the book
that Greg Mankiw's Principle of Micro/Macro economics textbooks have very little on the subject of inequality. How could a mainstream
textbook on economics not have a significant portion on inequality?? IMO because in Mankiw's case inequality does not fit his
ideology.
NC has a way of posting articles the same day that can be connected. I think this post can be related to the " Is a Harvard
MBA Bad for You?" post. The MBA becomes brainwashing. Instead of trying to solve a problem MBA'ers and other professions try to
fit the ideology of what they were taught in school to the problem.
To use an analogy: there are usually multiple routes to get from one town to the other. It does not always have to be the "main
road". Sometimes the main road is not always the fastest, shortest, etc. And sometimes by taking the same road all the time, one's
perspective becomes narrow and hinders thinking outside of the box.
To borrow Henry Ford's quote: "It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe
there would be a revolution before tomorrow morning."
After decades of allowing ourselves to be brainwashed, I think we are starting to, as J.D. Alt mentions above, "question the
scripts" and are finding them to be a house of cards.
Well you are just a kid. I'm 72 and I think I'm a family blogging genius but it could be just the first symptom. Whatever I'm
going to tell you guys what I think about this stuff until I get politely censored. I never studied economics – but I studied
languages until words were falling out of my ears. And in my lexicon Larry doesn't even have the integrity of an idiot. Sometimes
an idiot is spot on. Larry is a deceptive, self-serving power tripper dedicated to a time gone by and never to return. Too bad.
Thanks Susan! Recently I went to my doctor and he asked me how I was feeling. I said physiological (my term for non-skeletal)
I am 40. Structurally (arthritis, herniated discs, etc. etc.) I feel like I am 70!
===but I studied languages until words were falling out of my ears===
I have always had an intuitive sense for language. Verbal and non verbal language. The words used, tone, inflections, etc.
Andrew Carnegie once said that the older he became the less he paid attention to what people said and the more he paid attention
to their behavior. And I think that is partly true but language is important.
And as you mention language can be used to convey power. Pierre Bourdieu wrote Language and Symbolic Power which I have been
wanting to read. I have also skimmed through some of Michel Foucault's work on discourse analysis.
Also I have read some of Kenneth Burke's work such as A Grammar of Motive's and A Rhetoric of Motives. After reading Burke's
books I became more curious about people's motives behind their language and behavior, and also the idea of rhetoric. IMO Obama
is a master at rhetoric and hence could fool a lot of people, while Trump sucks at it.
If you have not done so already I suggest looking up the Logical Fallacies links on NC's policies page. I believe a lot of
language uses for power are in snowing the public in using arguments or propaganda that contain logical fallacies and heuristics.
I have learned a lot in examining what people say and their arguments from NC.
Yeah, I found what he said to be absolutely absurd. He seems to believe that MMT describes something we might do, as opposed
to explaining how things are, at least in countries like the US. If he can't understand, or pretends to not understand, the difference
between a country owing money in a foreign currency versus issuing bonds in a country's own currency, and the actual role of bonds
in the US system or how money is actually created, then he isn't trying. Cause, whatever we want to say about Summers and all
he represents, he isn't a stupid man. I haven't seen a single critique of MMT from the likes of Krugman or Summers that demonstrates
that they understand the thing they think they are critiquing, or that they understand how things actually work. In response to
MMT, they either respond with some models that they were taught that aren't based in reality, or they just lie about MMT. It is
the economic version of people like Pelosi lying about single payer in the political sphere using ridiculous logic.
That, to me, is frightening, given how much power he has and who he has been hired to give advice to. People like Summers seem
to freak out, really when you look at it, by the fact that we are questioning a fantasy account of how things are. They want to
continue to make policies on the assumption that things are in reality what they say they are in their models, and there is a
huge gap between the assumptions in their models and reality. If he were to acknowledge the insights from MMT about how things
work, many of the excuses those in power have for doing nothing as the country falls apart would crumble, and those doing nothing
are then more directly responsible for the impact of their policies. Once you realize that they are not investing in communities
being neglected by private interests, they aren't investing in things needed to deal with the environmental crisis, they aren't
helping to fund programs to get people healthcare or things like clean water (communities like Flint say hello) because they are
paid by interests to do those things, and for ideological and class reasons, they can no longer pretend that the government "can't
afford" those things. The debate switches to a place they don't want to be in, and they are then more responsible for the decisions
they make. It is no longer about circumstances forcing themselves on these worthless politicians.
I also think some need to observe that Keynes was not a Keynesian in the manner that mainstream use the IS-LM. One is the use
of econometrics and the other is the IS-LM was a – starting point – of observation that needed more fleshing out and not some
"economic law [tm] carried down the mount.
Would additionally point out good old Ralph Musgrave over at TJN proclaiming his long support for MMT with caveats, sadly anyone
with with a functional memory would know key MMT'ers stance with Musgrave does not support those claims.
PS. great start to the day 50kg black German Sheppard just bound up on the bed – all wet – and wanted to share his eagerness
for the day .
Keynes believed in governments planning more investment, especially during down times. This is the blunder modern day "sheep"
don't understand. It isn't deficits that matter, but pushing the investment into usage/production. Deficits like we have now are
nothing more than public debt underwriting private debt expansion via financial engineering. Of course market statists would hate
the government with a bigger % of total investment, as they would lose control of the economic system and bow to the will of another.
Its amazing how dopamine release and other "feel good" consumption based games and circuses so rules the people. All they live
for is the fix. The bourgeois sells it them as "their fix", "their ownership" of said fix while they rake in profits and destroy
the environment. Truly like the Roman end times. No wonder the Christians are so worried. They see themselves replaced like the
old rituals and traditions that proceeded it.
Yves, I'm not a MMT fan, but you're spot-on about Summers. Didn't he lose the Harvard Endowment over $1 Billion with his "sage
management"? He's an idiot.
One would think after the Chicago boys foray with Born and its after math people would question the use of such people as PR
tools – well must be running dry.
Suggest you look into the groundings of MMT and not emotive processes – see link above. Keynes started a process to refute
orthodox thinking, seems some post morte folded parts [tm] into orthodox thinking so they could own – manage that perspective.
Hence when needed mainstream will utilize Keynes to say money is not a problem and then completely reverse azimuth and say Keynes
said money is a problem ..
Can't wait till they take Marx out of context to support some elitist social views ..
I am curious, just want to know. When you say you aren't a fan of MMT, what is the reason? I am interested in good critiques
of its insights, just hard to come by, since it does seem to describe present really pretty well.
As with most "serious economists" he's really an overpaid fraud. The man professes to understand government deficits, yet he
has no idea how the accounting works.
From Warren Mosler
"Several years ago I had a meeting with Senator Tom Daschle and then Asst. Treasury Secretary Lawrence Summers. I had been discussing
these innocent frauds with the Senator, and explaining how they were working against the well being of those who voted for him.
So he set up this meeting with the Asst. Treasury Secretary who was also a former Harvard economics professor and had two uncles
who had won Nobel prizes in economics, to get his response and hopefully confirm what I was saying.
I opened with a question: "Larry, what's wrong with the budget deficit?"
To which he replied: "It takes away savings that could be used for investment".
To which I replied: "No it doesn't, all Treasury securities do is offset operating factors at the Fed. It has nothing to do
with savings and investment".
To which he replied: "Well, I really don't understand reserve accounting so I can't discuss it at that level".
Senator Daschle was looking at all this in disbelief. The Harvard professor of economics Asst. Treasury Secretary Lawrence
Summers didn't understand reserve accounting? Sad but true."
Note to Larry, please follow this logic: Money is Fiat; Fiat is cooperation; Cooperation is fiscal control; and fiscal control
is civilization. Nowhere in this chain of thought does debt; interest; austerity; or any of your other little techniques even
exist. Those bizarre ideas exist in more primitive thinking about power and slavery and savage exploitation. You know the routine.
Maybe, but debt expansion is debt expansion. Globally debt exhaustion looks to have been reached and we are at the top of the
mountain. We are at the first stage, the next stage is what triggers the recession. The last stage, the Minsky moment.
Summers is a cluck, but a useful one in this case. The move from a mixed economy to financial engineering is very addictive
to the "people". Moving back to a mixed economy won't be all giggles for everybody as consumption is naturally cut.
Like all junkies, the detox won't be easy and in some cases, fatal.
Yes, it is what is so frightening about our current breakdown. Debt is the whole system. It was necessary to maintain that
system. But there's no reason why debt can't be put in what banksters call a "bad bank" and just let it run off the books. It
can all be done in some resolution that forgives some and allows some to linger without interfering in the economy anymore. There
will always be private debt, so caveat friends and neighbors. But there's no reason to suffer an impossible debt burden as a sovereign
nation. And from here on in we should not buy anything unless it can be purchased in US dollars/treasuries. The debt to ourselves
doesn't matter. The thing that matters is how we spend our money, do we waste time on bad projects or do we create a more valuable
civilization with good ones? Debt is just a monkeywrench, useful to gamblers and middlemen. We could configure a completely different
economics with very little pain if we put our minds to it.
Another good link to Larry Summers, Serious Economist. I remembered this passage from Herman Daly's book, and the magic of
DuckDuckGo found this. Long but worth the few minutes. NB, I don't know anything about this blogger: https://sallywengrover.wordpress.com/tag/herman-daly/
Not much love for Larry Summers here – and rightly so. I remember reading a conversation that he was in where he explained
how things worked. I'll see if I can summarize it-
Larry Summers is a serious person.
Important people listen to serious people.
This is how serious people express power – by having important people listen to them.
Golden rule is that serious people never criticize each other in public – ever.
I'm sure that people here can pick out the flaw in this arrangement – as in Garbage In, Garbage Out as far as important people
are concerned and the information & opinions that they receive.
Seriously, what would you expect from a person who writes this at the first paragraph for
his biography (emphasis mine) :
"Dr. Summers' tenure at the U.S. Treasury coincided with the longest period of sustained economic growth in U.S. history. He is
the only Treasury Secretary in the last half century to have left office with the national budget in surplus . Dr. Summers has
played a key role in addressing every major financial crisis for the last two decades."
Change "addressing" by "participating in the genesis of", and you are quite close to the truth
Mmmm, and all that treasury surplus was accrued by Larry's Austerity which exponentiated the private debt and turned into the
2008 tsunami. Heck of a job, Larry.
Larry Summers is useful as a canary. The day Obama appointed him as an adviser (before his inauguration) was the day I understood
Obama would do diddly squat about fixing the root causes of the Great Recession.
The part I don't understand is how he gained his prominence, other than literal nepotism. You'd think the fact he lost Harvard's
endowment a cool billion would have killed his career given how prominent Harvard grads are in the US' power structure.
We were flying blind during globalisation and policymakers didn't understand the monetary system.
The FT revealed the Chinese were undertaking a major study of the West.
I think they must have worked out things are fundamentally wrong as they have made all the classic mistakes everyone else has
made since 2008.
They have already worked out inflated asset prices and the private debt-to-GDP ratio are indicators of coming financial crises
and these were the indicators that showed 1929 and 2008 were coming.
By the time they understood what was going on the Minsky Moment was dead ahead, and they could no longer use the debt fuelled
growth model they had used before.
When US policymakers understand the monetary system they may be able to make some valid comments.
"There ain't no such thing as a free lunch" (alternatively, "There is no such thing as a free lunch" or other variants)
is a popular adage communicating the idea that it is impossible to get something for nothing.
The acronyms TANSTAAFL, TINSTAAFL, and TNSTAAFL, are also used. Uses of the phrase dating back to the 1930s and 1940s have
been found, but the phrase's first appearance is unknown.[1]
The "free lunch" in the saying refers to the nineteenth-century practice in American bars of offering a "free lunch" in
order to entice drinking customers.
The phrase and the acronym are central to Robert Heinlein's 1966 science-fiction novel The Moon Is a Harsh Mistress, which
helped popularize it.[2][3]
The free-market economist Milton Friedman also popularized the phrase[1] by using it as the title of a 1975 book,[4] and
it is used in economics literature to describe opportunity cost.[5]
Campbell McConnell writes that the idea is "at the core of economics".
[I was a bigger fan of Robert Heinlein's than I was of Milton Friedman and even then it was "Stranger in a Strange Land" and
"The Unpleasant Profession of Jonathan Hoag" rather than later works that appealed to me.]
Just as an aside. It is worth remembering where the current globalization came from
historically.
It started with the 1970s inflation, (caused partly by the oil crisis) and the coincident
abuse of monopoly power by a number of unions (please those on the outer left don't try to
pretend it didn't happen, it did).
Uncle Milton came along with plausible sounding solutions (monetarism and increasing
foreign competition). Increasing foreign competition worked for a while – until the
mergers starting being international and industry concentration increased on an international
scale (and so was harder to combat).
Uncle Milton has since been proved wrong about almost everything. His one big idea that
never got tried (negative income tax – which could implemented more simply and
effectively as a universal basic income) ironically is the only one I think was good.
After more than a decade at the helm of one of Harvard's largest courses, Economics
Professor N. Gregory Mankiw announced in an email to graduate students Monday that he will step
down from teaching Economics 10: "Principles of Economics" at the end of this semester.
"... Instead of serving as a counter weight to the market, then, the family was invaded and undermined by the market. The sentimental veneration of motherhood, even at the peak of its influence in the late nineteenth century, could never quite obscure the reality that unpaid labour bears the stigma of social inferiority when money becomes the universal measure of value. ..."
"... Commercial television dramatizes in the most explicit terms the cynicism that was always implicit in the ideology of the marketplace. The sentimental convention that the best things in life are free has long since passed into oblivion. Since the best things clearly cost a great deal of money, people seek money, in the world depicted by commercial television, by fair means or foul. ..."
"... Throughout the twentieth century liberalism has been pulled in two directions at once: toward the market and (not withstanding its initial misgivings about government) toward the state. On the one hand, the market appears to be the ideal embodiment of the principle-the cardinal principle of liberalism-that individuals are the best judges of their own interests and that they must therefore be allowed to speak for themselves in matters that concern their happiness and well-being. But individuals cannot learn to speak for themselves at all, much less come to an intelligent understanding of their happiness and well-being, in a world in which there are no values except those of the market. Even liberal individuals require the character-forming discipline of the family, the neighbourhood, the school, and the church, all of which (not just the family) have been weakened by the encroachments of the market. ..."
"... The market notoriously tends to universalize itself. It does not easily coexist with institutions that operate according to principles antithetical to itself: schools and universities, newspapers and magazines, charities, families. Sooner or later the market tends to absorb them all. It puts an almost irresistible pres sure on every activity to justify itself in the only items it recognizes: to become a business proposition, to pay its own way, to show black ink on the bottom line. It turns news into entertainment, scholarship into professional careerism, social work into the scientific management of poverty. Inexorably it remodels every institution in its own image. ..."
"... In the attempt to restrict the scope of the market, liberals have therefore turned to the state. But the remedy often proves to be worse than the disease. The replacement of informal types of association by formal systems of socialization and control weakens social trust, undermines the willingness both assume responsibility for one's self and to hold others accountable for their actions destroys respect for authority and thus turns out to be self-defeating. Neighbourhoods, which can serve as intermediaries between the family and the larger world. Neighbourhoods have been destroyed not only by the market-by crime and drugs or less dramatically by suburban shopping malls-but also by enlightened social engineering. ..."
"... "The myth that playgrounds and grass and hired guards or supervisors are innately wholesome for children and that city streets, filled with ordinary people, are innately evil for children, boils down to a deep contempt for ordinary people." In their contempt planners lose sight of the way in which city streets, if they are working as they should, teach children a lesson that cannot be taught by educators or professional caretakers: that "people must take a modicum of public responsibility for each other even if they have no ties to each other." When the corner grocer or the locksmith scolds a child for running into the street, the child learns something that can't be learned simply by formal instruction. ..."
"... The crisis of public funding is only one indication of the intrinsic weakness of organizations that can no longer count on informal, everyday mechanisms of social trust and control. ..."
If terms like "populism" and "community" figure prominently in political discourse today, it is because the ideology of the Enlightenment,
having come under attack from a variety of sources, has lost much of its appeal. The claims of universal reason are universally suspect.
Hopes for a system of values that would transcend the particularism of class, nationality, religion, and race no longer carry much
conviction. The Enlightenment's reason and morality are increasingly seen as a cover for power, and the prospect that the world can
he governed by reason seems more remote than at any time since the eighteenth century. The citizen of the world-the prototype of
mankind in the future, according to the Enlightenment philosophers-is not much in evidence. We have a universal market, but it does
not carry with it the civilizing effects that were so confidently expected by Hume and Voltaire. Instead of generating a new appreciation
of common interests and inclinations-if the essential sameness of human beings everywhere-the global market seems to intensify the
awareness of ethnic and national differences. The unification of the market goes hand in hand with the fragmentation of culture.
The waning of the Enlightenment manifests itself politically in the waning of liberalism, in many ways the most attractive product
of the Enlightenment and the carrier of its best hopes. Through all the permutations and transformations of liberal ideology, two
of its central features have persisted over the years: its commitment to progress and its belief that a liberal state could dispense
with civic virtue. The two ideas were linked in a chain of reasoning having as its premise that capitalism had made it reason able
for everyone to aspire to a level of comfort formerly accessible only to the rich. Henceforth men would devote themselves to their
private business, reducing the need for government, which could more or less take care of itself. It was the idea of progress that
made it possible to believe that societies blessed with material abundance could dispense with the active participation of ordinary
citizens in government.
After the American Revolution liberals began to argue-in opposition to the older view that "public virtue is the only foundation
of republics," in the words of John Adams -- that proper constitutional checks and balances would make it advantageous even for bad
men to act for the public good," as James Wilson put it. According to John Taylor, "an avaricious society can form a government able
to defend itself against the avarice of its members" by enlisting the "interest of vice ...on the side of virtue." Virtue lay in
the "principles of government," Taylor argued, not in the "evanescent qualities of individuals." The institutions and "principles
of a society may be virtuous, though the individuals composing it are vicious."
Meeting minimal conditions
The paradox of a virtuous society based on vicious individuals, however agree able in theory, was never adhered to very consistently.
Liberals took for granted a good deal more in the way of private virtue than they were willing to acknowledge. Even to day liberals
who adhere to this minimal view of citizenship smuggle a certain amount of citizenship between the cracks of their free- market ideology.
Milton Friedman himself admits that a liberal society requires a "minimum degree of literacy and knowledge" along with a "widespread
acceptance of some common set of values." It is not clear that our society can meet even these minimal conditions, as things stand
today, but it has always been clear, in any case, that a liberal society needs more virtue than Friedman allows for.
A system that relies so heavily on the concept of rights presupposes individuals who respect the rights of others, if only because
they expect others to respect their own rights in return. The market itself, the central institution of a liberal society, presupposes,
at the very least, sharp-eyed, calculating, and clearheaded individuals-paragons of rational choice. It presupposes not just self
interest but enlightened self-interest. It was for this reason that nineteenth-century liberals attached so much importance to the
family. The obligation to support a wife and children, in their view, would discipline possessive individualism and transform the
potential gambler, speculator, dandy, or confidence man into a conscientious provider. Having abandoned the old republican ideal
of citizenship along with the republican indictment of luxury, liberals lacked any grounds on which to appeal to individuals to subordinate
private interest to the public good.
But at least they could appeal to the higher selfishness of marriage and parenthood. They could ask, if not for the suspension
of self-interest, for its elevation and refinement. The hope that rising expectations would lead men and women to invest their ambitions
in their offspring was destined to be disappointed in the long run. The more closely capitalism came to be identified with immediate
gratification and planned obsolescence, the more relentlessly it wore away the moral foundations of family life. The rising divorce
rate, already a source of alarm in the last quarter of the nineteenth century, seemed to reflect a growing impatience with the constraints
imposed by long responsibilities and commitments.
The passion to get ahead had begun to imply the right to make a fresh start whenever earlier commitments became unduly burden
some. Material abundance weakened the economic as well as the moral foundations of the "well-'ordered family state" admired by nineteenth-century
liberals. The family business gave way to the corporation, the family farm (more slowly and painfully) to a collectivized agriculture
ultimately controlled by the same banking houses that had engineered the consolidation of industry. The agrarian uprising of the
1870s, 1880s, and l890s proved to be the first round in a long, losing struggle to save the family farm, enshrined in American mythology,
even today, as the sine qua non of a good society but subjected into practice to a ruinous cycle of mechanization, indebtedness,
and overproduction.
The family invaded
Instead of serving as a counter weight to the market, then, the family was invaded and undermined by the market. The sentimental
veneration of motherhood, even at the peak of its influence in the late nineteenth century, could never quite obscure the reality
that unpaid labour bears the stigma of social inferiority when money becomes the universal measure of value.
In the long run women were forced into the workplace not only because their families needed extra income but because paid labour
seemed to represent their only hope of gaining equality with men. In our time it is increasingly clear that children pay the price
for this invasion of the family by the market. With both parents in the workplace and grandparents conspicuous by their absence,
the family is no longer capable of sheltering children from the market. The television set becomes the principal baby-sitter by default.
Its invasive presence deals the final blow to any lingering hope that the family can provide a sheltered space for children to grow
up in.
Children are now exposed to the out side world from the time they are old enough to be left unattended in front of the tube. They
are exposed to it, moreover, in a brutal yet seductive form that reduces the values of the marketplace to their simplest terms.
Commercial television dramatizes in the most explicit terms the cynicism that was always implicit in the ideology of the marketplace.
The sentimental convention that the best things in life are free has long since passed into oblivion. Since the best things clearly
cost a great deal of money, people seek money, in the world depicted by commercial television, by fair means or foul.
Throughout the twentieth century liberalism has been pulled in two directions at once: toward the market and (not withstanding
its initial misgivings about government) toward the state. On the one hand, the market appears to be the ideal embodiment of the
principle-the cardinal principle of liberalism-that individuals are the best judges of their own interests and that they must therefore
be allowed to speak for themselves in matters that concern their happiness and well-being. But individuals cannot learn to speak
for themselves at all, much less come to an intelligent understanding of their happiness and well-being, in a world in which there
are no values except those of the market. Even liberal individuals require the character-forming discipline of the family, the neighbourhood,
the school, and the church, all of which (not just the family) have been weakened by the encroachments of the market.
The market notoriously tends to universalize itself. It does not easily coexist with institutions that operate according to
principles antithetical to itself: schools and universities, newspapers and magazines, charities, families. Sooner or later the market
tends to absorb them all. It puts an almost irresistible pres sure on every activity to justify itself in the only items it recognizes:
to become a business proposition, to pay its own way, to show black ink on the bottom line. It turns news into entertainment, scholarship
into professional careerism, social work into the scientific management of poverty. Inexorably it remodels every institution in its
own image.
Weakening social trust
In the attempt to restrict the scope of the market, liberals have therefore turned to the state. But the remedy often proves
to be worse than the disease. The replacement of informal types of association by formal systems of socialization and control weakens
social trust, undermines the willingness both assume responsibility for one's self and to hold others accountable for their actions
destroys respect for authority and thus turns out to be self-defeating. Neighbourhoods, which can serve as intermediaries between
the family and the larger world. Neighbourhoods have been destroyed not only by the market-by crime and drugs or less dramatically
by suburban shopping malls-but also by enlightened social engineering.
The main thrust of social policy, ever since the first crusades against child labour, has been to transfer the care of children
from informal settings to institutions designed specifically for pedagogical and custodial purposes. Today this trend continues in
the movement for daycare, often justified on the undeniable grounds that working mothers need it but also on the grounds that daycare
centers can take advantage of the latest innovations in pedagogy and child psychology. This policy of segregating children in age-graded
institutions under professional supervision has been a massive failure, for reasons suggested some time ago by Jane Jacobs in The
Death and Life of Great American Cities, an attack on city planning that applies to social planning in general.
"The myth that playgrounds and grass and hired guards or supervisors are innately wholesome for children and that city streets,
filled with ordinary people, are innately evil for children, boils down to a deep contempt for ordinary people." In their contempt
planners lose sight of the way in which city streets, if they are working as they should, teach children a lesson that cannot be
taught by educators or professional caretakers: that "people must take a modicum of public responsibility for each other even if
they have no ties to each other." When the corner grocer or the locksmith scolds a child for running into the street, the child learns
something that can't be learned simply by formal instruction.
What the child learns is that adults unrelated to one another except by the accident of propinquity uphold certain standards and
assume responsibility for the neighbourhood. With good reason, Jacobs calls this the "first fundamental of successful city life,"
one that "people hired to look after children cannot teach because the essence of this responsibility is that you do it without being
hired."
Neighbourhoods encourage "casual public trust," according to Jacobs. In its absence the everyday maintenance of life has to be
turned over to professional bureaucrats. The atrophy of informal controls leads irresistibly to the expansion of bureaucratic controls.
This development threatens to extinguish the very privacy liberals have always set such store by. It also loads the organizational
sector with burdens it cannot support. The crisis of public funding is only one indication of the intrinsic weakness of organizations
that can no longer count on informal, everyday mechanisms of social trust and control.
The taxpayers' revolt, although itself informed by an ideology of privatism resistant to any kind of civic appeals, at the same
time grows out of a well-founded suspicion that tax money merely sustains bureaucratic self-aggrandizement
The lost habit of self-help
As formal organizations break down, people will have to improvise ways of meeting their immediate needs: patrolling their own
neighbourhoods, withdrawing their children from public schools in order to educate them at home. The default of the state will thus
contribute in its own right to the restoration of informal mechanisms of self-help. But it is hard to see how the foundations of
civic life can be restored unless this work becomes an overriding goal of public policy. We have heard a good deal of talk about
the repair of our material infrastructure, but our cultural infrastructure needs attention too, and more than just the rhetorical
attention of politicians who praise "family values" while pursuing economic policies that undermine them. It is either naive or cynical
to lead the public to think that dismantling the welfare state is enough to ensure a revival of informal cooperation-"a thousand
points of light." People who have lost the habit of self-help, who live in cities and suburbs where shopping malls have replaced
neighbourhoods, and who prefer the company of close friends (or simply the company of television) to the informal sociability of
the street, the coffee shop, and the tavern are not likely to reinvent communities just because the state has proved such an unsatisfactory
substitute. Market mechanisms will not repair the fabric of public trust. On the contrary the market's effect on the cultural infrastructure
is just as corrosive as that of the state.
A third way
We can now begin to appreciate the appeal of populism and communitarianism. They reject both the market and the welfare state
in pursuit of a third way. This is why they are so difficult to classify on the conventional spectrum of political opinion. Their
opposition to free-market ideologies seems to align them with the left, but 'their criticism of the welfare state (whenever this
criticism becomes open and explicit) makes them sound right-wing. In fact, these positions belong to neither the left nor the right,
and for that very reason they seem to many people to hold out the best hope of breaking the deadlock of current debate, which has
been institutionalized in the two major parties and their divided control of the federal government. At a time when political debate
consists of largely of ideological slogans endlessly repeated to audiences composed mainly of the party faithful, fresh thinking
is desperately needed. It is not likely to emerge, however, from those with a vested interest in 'the old orthodoxies. We need a
"third way of thinking about moral obligation," as Alan Wolfe puts it, one that locates moral obligation neither in the state nor
in the market but "in common sense, ordinary emotions, and everyday life."
Wolfe's plea for a political program designed to strengthen civil society, which closely resembles the ideas advanced in The Good
Society by Robert Bellah and his collaborators, should be welcomed by the growing numbers of people who find themselves dissatisfied
with the alternatives defined by conventional debate. These authors illustrate the strengths of the communitarian position along
with some of its characteristic weaknesses. They make it clear that both the market and the state presuppose the strength of "non-economic
ties of trust and solidarity" as Wolfe puts it. Yet the expansion of these institutions weakens ties of trust and thus undermines
the preconditions for their own success. The market and the "job culture," Bellah writes, are "invading our private lives," eroding
our "moral infrastructure" of "social trust." Nor does the welfare state repair the damage. "The example of more successful welfare
states ... suggests that money and bureaucratic assistance alone do not halt the decline of the family" or strengthen any of the
other "sustaining institutions that make interdependence morally significant." None of this means that a politics that really mattered-a
politics rooted in popular common sense instead of the ideologies that appeal to elites-would painlessly resolve all the conflicts
that threaten to tear the country apart. Communitarians underestimate the difficulty of finding an approach to family issues, say,
that is both profamily and profeminist.
That may be what the public wants in theory. In practice, however, it requires a restructuring of the workplace designed to make
work schedules far more flexible, career patterns less rigid and predictable, and criteria for advancement less destructive to family
and community obligations. Such reforms imply interference with the market and a redefinition of success, neither of which will be
achieved without a great deal of controversy.
First vices about the color revolution against Trump were heard on December 2016
Notable quotes:
"... 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.
All Risk and no reward asked me this, and here is the truth of it all:
9 minutes ago
iSage, what do you have to say about the fraudulent debt-based money system that is
protected by all political classes, even as it enslaves and impoverishes the masses of
people?
The debt is a creation of fiat money, pure and simple, living beyond our means. We were
taken off the gold standard by FDR and Nixon closed the gold window to finance JFK's Vietnam
war. Thus establishing the Petro Dollar, via having the House of Fraud sell their black gold
(oil) in fiat dollars, for tech know how and military protection.
The Fed is an illegal entity, which controls our money supply and interest rates
artificially. They can do this because we are a bankrupt nation going back to the 1930's.
We are a captured nation under LOST, Laws of the Seas Treaty, thus the Gold Tassels around
our flag in courts and federal buildings. Our names are in CAPS in all birth certs, because
we are slaves to the system, due to this bankruptcy and treaty.
It is a farce the American people have been fleeced and lied to all their lives, thinking
the Das Kapital capitalism is great. It is a *** communist construct, to enslave us
further.
Climate ChangePoliticsUS EConomics "When we
first came to Washington in 1933," FDR Labor Secretary Francis Perkins wrote in her memoir,
The Roosevelt I Knew , "the Black bill was already before the Congress. Introduced by
Senator Hugo L. Black, it had received support from many parts of the country and from many
representatives and senators."
The Black Bill was the Senate version of the Black-Connery Thirty-Hour Bill. On April 6,
1933, the Senate approved the measure by a vote of 53 to 30. Perkins was scheduled to appear
before the House committee holding hearings on the Connery Bill:
Roosevelt had a problem. He was in favor of limiting the hours of labor for humanitarian
and possibly for economic reasons and therefore did not want to oppose the bill. At the same
time, he did not feel that it was sound to support it vigorously. But the agitation for the
bill was strong. Its proponent insisted that it was a vital step toward licking the
depression. I said, "Mr. President, we have to take a position. I'll take the position, but I
want to be sure that it is in harmony with your principles and policy."
Roosevelt had another problem. The National Association of Manufacturers and the Chamber of
Commerce were adamantly opposed to the Thirty-Hour Bill. Perkins offered amendments to the
Connery Bill, the American Federation of Labor offered other amendments and business
representatives "proposed crippling amendments that would have destroyed the purpose of the
measure."
On May 1, the administration withdrew its support for the Connery Bill. Roosevelt had
concluded that organized business would not support the recovery program if the Black-Connery
Bill were to become law. In its place, the collective bargaining provisions of Section 7(a) and
wage, hour and labor standard provisions were added to the National Industrial Recovery Act
through, in Leon Keyserling's account, "a series of haphazard accidents reflecting the desire
to get rid of the Black bill and to put something in to satisfy labor."
The Supreme Court ruled the Recovery Act unconstitutional on May 27, 1935. In its place, the
"Second New Deal" consisted of a variety of policies, including, most notably, the National
Labor Relations Act, the Works Progress Administration and Social Security.
The moral to the story is that "the" New Deal was improvised, it evolved, was not unitary
and its original impetus came from a fundamentally different policy proposal that was anathema
to the business lobby. The Thirty-Hour Bill was conceived as a solution to a problem that is no
longer polite in policy circles to consider as a problem -- "over-production."
I am sympathetic to the intentions and ambition of the
Green New Deal
resolution proposed by U.S. Representative Alexandria Ocasio-Cortez and Senator Ed Markey. What
I find especially compelling is the inclusion of social and economic justice and equality in
the program goals. The vision isn't just a proposal for "sustainable" business-as-usual,
powered by wind and solar.
The day before Ocasio-Cortez and Markey announced their resolution, Kate Aronoff and
co-authors presented a " Five Freedoms " statement
of principles for a Green New Deal, modeled on Franklin Roosevelt's Four Freedoms.from 1941. My
favorite, of course, is number two: Freedom From Toil:
We can't escape work altogether, and there's a lot of work we need to do, immediately and
in the long term. But work doesn't need to rule our lives.
The great nineteenth-century English socialist William Morris made a distinction between
useful work and useless toil: we need the former but should free ourselves from the latter.
We can escape the crushing toll of working long hours for low wages to make something that
someone else owns.
At present, there's a lot of work that's worse than useless -- it's toil that's harmful to
the people doing it and to the world in which we live. But even useful work should be
distributed more widely so that we can all do less of it -- and spend more time enjoying its
fruits.
I suppose there always has been work that is "worse than useless" -- bullshit jobs and all
that. But there is cruel irony in the fact that the ultimate solution to the 1930s problem of
over-production was perpetual creation of useless toil through credit, fashion, advertising,
and government stimulus and subsidies. The original proposal had been
shorter working time
!
Which brings me back to the peregrinations of the FDR New Deal. The 12-year deadline posited
by the I.P.C.C. for keeping within the 1.5 degree centigrade limit brings us to the 100th
anniversary of Keynes's "
Economic
Possibilities For Our Grandchildren ." Time has run out on his caveat:
But beware! The time for all this is not yet. For at least another hundred years we must
pretend to ourselves and to every one that fair is foul and foul is fair; for foul is useful
and fair is not. Avarice and usury and precaution must be our gods for a little longer still.
For only they can lead us out of the tunnel of economic necessity into daylight.
We have been pretending long enough now for foul to become worse than useless and to
convince ourselves that fair really would be foul. It is past time to
stop
pretending .
spencer , February 20, 2019 11:32 am
I've long wondered why conservatives – libertarians do not give as much attention
to the 40 hour workweek as they do to the minimum wage. From their point of view there
should not be much difference between the two.
I suspect they intuit that a workweek much longer than 40-hours will not add an iota to
output, will probably subtract from output -- and profits -- and could possibly provoke a
renewal of mass struggles for shorter hours.
I don't see work as such a torture. When Keynes was speaking, work was much more arduous
than it is now (unless you work in McDonald's) and remuneration was mostly subsistence
because productivity was much lower and technology but little (top invention, steam
engines, no LED TVs!). I know people who could retire but don't because, what else would
they do.
Luc , February 21, 2019 9:04 am
"The capitalist mode of production, while on the one hand, enforcing economy in each
individual business, on the other hand, begets, by its anarchical system of competition,
the most outrageous squandering of labour-power and of the social means of production, not
to mention the creation of a vast number of employments, at present indispensable, but in
themselves superfluous."
Unless one has a good grasp of the difference between value and material wealth these
discussions usually go nowhere. Most of labour performed today is unnecessary from the
future standpoint of a post-capitalist society.
Don't the people pulling the strings behind the media understand what they have done?
They have convinced a large part of the nation that everything that they were taught from
childhood is a fraud.
Civilizations are only held together by the "glue" of shared beliefs. The
deep-state-media-complex has just applied a solvent to the very glue that holds the entire
culture together.
And Hopkins says a disillusioned people might realize
in reality they are living in a neo-feudalist, de facto global capitalist empire
administrated by omnicidal money-worshipping human parasites that won't be satisfied until
they've remade the whole of creation in their nihilistic image.
There has been a longstanding bipartisan attack against the nation, and I use that term as
defined as "a stable, historically developed community of people with a territory, economic
life, distinctive culture, and language in common."
But I don't think the "deep-state-media-complex" is concerned by this. Again, feature not
bug.
We live in a goon-run surveillance economy, backed up by the strong arm of a mighty
surveillance state apparatus, and nobody -- I mean nobody -- really stands up to it, calling
out the real economic problems without a politically correct overlay that focuses on
drummed-up social issues or other media-driven diversion tactics. As much as Hollywood
theatrics are used as a way to sell the current setup as a functioning Republic to the serfs,
none of our never-been-so-wealthy elected leadership has the morality to challenge the
corrupt system. There's a reason for their crumbly back bones.
Despite the fake-morality play, using kids and babies as props in this fake-feminist era,
we don't even have leaders morally uncompromised enough to take on the Swamp in minor ways,
not in a surveillance state / surveillance economy, where all of the morally blemished
political elites have a lot to lose -- financially.
Political elites have a lot to lose financially, even though few of them ever took the
classic road to riches, including taking on financial risk to create quality jobs for US
citizens, as opposed to using cheap foreign wage slaves whose low wages are pumped up by
welfare for US-born kids, making it easy for them to work cheaply for elites.
Most of our rich political elites have never started businesses, employing US citizens to
make tangible items, like cake mixes or ketchup, but somehow in this finacialized
surveillance economy, all of our political leaders are flat-out rich with a lot to lose from
speaking out against the rigged system, much less actually doing something about it.
Even without extra, ratings-boosting, sexual or other Swamp-exploitable foibles, that
means a lot of leverage for surveillance goons to hold over political decision-makers' heads
if they don't do their bidding, especially in a survelliance state / survelliance economy,
wherein every nook and cranny of their lives is scrutinized to the hilt.
And it's perfectly okay for our power couples to put riches over morality because, like
the aristocrats producing golden heirs to assume the throne in other eras when aristocratic
couples and static wealth reigned supreme, our business and political leaders have all
reproduced, putting them as above firing and above morality as other elites in the
family-friendly, fake-feminist era. Everything elites do is for their babies, regardless of
how venal it is.
Despite all of the surveillance that renders the Fourth Amendment null and void for
cash-strapped serfs no less than elites and that stymies the First Amendment, suppressing the
serfs from calling out the economic situation for what it is no less than elites, corruption
is at all time highs.
Think that has anything to do with the brass-knuckle silencing tactics, made possible by
the surveillance state?
Our so-called leaders don't even bother to challenge the most basic threats to
constitutional liberty, much less the shaky foundation of our part-time / temp / churn-job
economy, with its welfare-subsidized legal & illegal immigrant workforce and our
single-mom & married-mom workforce, able to work part-time and in temp jobs for beans,
thereby supplementing spousal income, rent-covering child support or the welfare they collect
by staying under the earned-income limits for multiple welfare programs during working months
in single-breadwinner households with US-born kids.
It is not even semi-quality jobs that support most households at the growing bottom. It is
the already intact socialist system propping up a willing, cheap labor force for big
corporations, that supports a large percentage of American households. Who needs Bernie's
socialism when we already have a platter of 100%-free, non-contributory, pay-per-birth
socialism, offered up by the Republican and Democratic Uniparty to drive down wages for
non-welfare-eligible citizens 40 years?
Bernie is no stand-out Rebel. American corporations love socialism.
Even though the rebel Bernie has never held more than one senate seat, single-breadwinner
households with US-born kids are already supplied with hundreds in free EBT food,
reduced-cost housing, hundreds in monthly cash assistance, free electrcity and up to $6,431
in refundable child tax credit cash when they are willing to work part time or in temp
positions for low wages, staying below the earned-income limits for welfare during working
months. That's how they undercut millions of underemployed citizens who lack unearned income
streams from .gov, and no corporate-owned political rebel in the surveillance state is
willing to stand up to it.
No politician on the right or the left is free enough from the surveillance economy /
surveillance state's goon squad to say what that means for vanquished middle-class prosperity
in the USA.
It's not just student loans, either, no matter how much the establishment wants that to be
the main problem so that they can blow another housing bubble with the mostly unmarried
Millennials in their part-time / churn jobs. Truth is: Few of those college grads except the
dual-high-earner parents in their family-friendly / absenteeism-friendly jobs -- keeping two
of the few jobs with benefits and good wages under one roof and halving the size of the
house-buying and rent-covering middle class while low-wage daycare workers or grandparents
raise their kids -- can afford to buy a house. The above-firing group in the top 20%,
however, can afford more palatial houses than any non-rich group of non job creators in US
history.
In the long-gone America with the broad middle class and the mostly married, stay-at-home
moms, most couples paid off modest houses by retirement, and most single earners with one,
earned-only income stream could afford the dignity of a modest apartment, whereas most of
today's working women will face insurmountable rent costs in retirement, just like they do
during working years.
That is what the fake feminists have accomplished for the bottom 80%, but the
family-friendly princesses in their palaces have not made any compromises. They humanize that
by adding layers of absenteeism privileges for low-wage mommies in discriminatory
voted-best-for-moms jobs, plus welfare and cash handouts through the progressive tax code to
soften the brutality of this churn-job economy. But those womb-privileged single moms find
themselves in the same dismal economic boat with the single, childless women in the bottom
80% after their kids turn 18, and the wage-supplementing, pay-per-birth freebies from
goverment dry up.
Lacking a student loan debt does not overcome the insurmountable cost of housing for
single breadwinners, whether they are male or female, non-custodial parents, middle-aged or
older with no kids, older with no kids under 18 or younger in the years before family
formation beefs up their income with cash-check tax code privileges, monthly welfare access
and crony-parent workplace privileges. With none of the unearned income streams accruing to
womb-productive single earners, the single earners relying relying on earned-only income from
one person cannot even afford rent for a one-room apartment in a safe or unsafe area, much
less a house. And there are more single earners than ever; we are the majority.
The childbearing-aged Millennials will be the focus of every economist and of all
political hacks, seeking votes from the mostly older and middle-aged citizens who bother to
show up on voting day, not the Xers with one, earned-only income stream and no kids under 18
and, thus, no handouts from Uncle Sam and the Treasury Department pumping up their wages in
this dismal scam landscape of a churn-job gig economy.
Thanks to feminism, there are more & more of us in that category in this era of
single, "independent" career women, and it is going to get worse and worse as this group hits
retirement age. It will be worse for everyone except the dual-high-earner parents -- the
tax-advantaged, "needs-the-job," above-firing "talent" who were needed at work because of
their talent, but who were somehow on a an expensive, lengthy, family-friendly vacation every
couple of months during their above-firing, childbearing-aged working years, not to mention
all of the mornings and afternoons of excused absenteeism (for kids, for kids!) and their
multiple pregnancy leaves.
These working-parents-in-charge, with their libertine, back-watching, family-friendly work
schedules, sure do fire a lot of the non-family-friendly non culture fits whose every day,
all-day hard work helps to keep their bonus numbers up. They fire away for the most trivial
and pettiest of infractions in the churn machine of America's unprofessional-to-the-max
corporate workplaces. Use and lose. Churn and burn. It equals family-friendly job
security.
But regardless of how they did it, they will still retire into their luxury apartments or
cathedral-ceiling homes, with two streams of SS income and two 401k streams.
Whereas, however hard they work and however much they help to pump up the crony-parent
managers' bonuses, a huge number of divorced or never-married, single-breadwinner Xers who,
since they did not have kids, did not need tax credit handouts to boost up their low wages,
nor above-firing absenteeism privileges, benefits, decent-paying jobs or even a modicum of
job security will retire into the most spartan and hopeless of "retirement" situations.
They will have nothing but one stream of very inadequate, non-rent-covering SS, into which
they contributed either 7.5% or 15.3% of every dime they earned, unlike these glorified
single moms and immigrants, raking in 100%-free monthly welfare by the truckloads, in
addition to bigly, refundable cash-assistance welfare checks from the progressive tax code
that top out at $6,431 all through their childbearing years, even though they do not pay
income taxes in many cases and even though they work part time .
The average employed person in the USA is a part-time worker. That is the
reality of automation, fake womb-productivity-based feminism and 4 decades of
welfare-supported mass immigration.
Retirement will be just as bad, if not worse, for the even bigger group of hear-them-roar,
fake-feminist, ever-more-never-married, part-time-job-holding, pink-hatted "career" women --
with all of their hypocritical, un-feminist, womb-focused demands of .gov and their
much-maligned soy-boy sperm providers -- in the equally underemployed Millennial
generation.
But in an anti-individual, anti-liberty and corrupt-to-the-core survelliance state
economy, with a Constitution based on individual liberty in suspension, all that counts is a
functioning feudal structure for aristocratic baby makers in the top 1 -- 20%, pumping out
heirs to the thrones in a financialized economy that favors static wealth, and the illusion
of benevolence that they create by throwing lots of mom-pampering cake crumbs to their
womb-productive, welfare-qualified, legal & illegally-in-this-country cheap, groveling
servants. A ton of Hollywood-lite, weepy-eyed media concern for the mommies and babies around
the globe adds gloss to this fake-morality veneer.
Trump said something about the immigration part of this corrupt equation, saying it
loudly enough to divert attention from the fact that he is not really doing anything about
the onslaught of 40 years of mass-scale, welfare-aided legal & illegal immigration that
keeps wages at rock bottom for cashing-in employers.
Turns out, Bernie, however saintly by comparison with other politicians in the
surveillance state / surveillance economy, was not without goon-exploitable human foibles,
like a $600,000 rustic lake house needing "help" from interior designers and a spousal-income
controversy. Bernie fans should not forget that the Deep State cutthroats are not at all
above exploiting it with no mercy, no matter how many cutesy baby pics they wave around to
prove their humanity. They are shameless enough to use it against him, no matter how
knee-deep in Swamp dollars they are.
That goes for the lovely, family-friendly leaders in both of our corrupt, Swamp-controlled
parties. And it would not matter if a truly kick- *** superhero arose to take on the Swamp
Goliath.
This Surveillance Swamp is too deep even for Mister Rodgers to wade through. If he ran for
office on a platform of true reform, the Surveillance Swampers would be accusing him of
bacchanalian bathroom activity, telling him they have video conformation of that, along with
proof from credit-rating agencies of his cardigan sweater-buying shopaholic sprees right down
to his last bank transaction.
We live in KGB country, where it is easy to pull politicians off of any real reformist
path. No wonder, swampers are so concerned with Russia, thirty years after the Cold War
ended. Rich US politicians, in a rigged surveillance economy, live in Stalinist Russia --
Stalinist Russia with an increased surveillance capacity, whereas the serfs live under the
same economic & government surveillance without even the reward of a quality non-churn
job, an independent roof over their heads or a safe neighborhood.
What a great trade off: our liberty and our widespread middle class in return for
end-to-end financial security for the top 1 -- 20% and womb-productivity-based welfare
security for some part-time-working, womb-productive citizens and noncitizens in the bottom
80% during their baby-making years. Oh, we serfs also get to hear the virtue-signaling chorus
of the racism and sexism fighters, and a few of them make bank off of discrimination
lawsuits.
"... Socialism is government by the ruling honchos who have figured out how to appear as altruistic saviors while living the life of Riley and holding the carrot of prosperity in front of the noses of the disenfranchised peasants. ..."
"... If I understand you correctly, we are in the best of all worlds? ..."
@Commentator Mike
Today's system is a hybrid of a late finance-stage global capitalism and cultural–not
economic–Marxism. Instead of class struggle, we have identity politics. Instead of the
ownership of the means of production, we have tranny bathrooms.
So the right-wingers (like Peter Hitchens) who say that 'Marxism won' are half right
culturally, not economically. What causes all the confusion (among the libertarian types
especially) is that capitalism in reality does not in any way resemble how it ought to
work according to libertarian theories and never did. But when you point out to them
that capitalism never worked in practice to begin with, they answer: 'But true
capitalism has never even been tried!' And of course, they're right. 'True' capitalism (i.e.,
what libertarian theory calls capitalism) really never has been tried, and for exactly the
same reason that perpetual motion machines have never been tried either: they're
impossible.
None of which means I'm a 'pure' socialist. I'm open to mixed-economies and new
experiments. I usually characterize myself more as a national socialist, mostly to
differentiate myself from the 'world revolution' Trotskyite socialists who now predominate on
the far-left.
That means I also take some inspiration from some fascists and national-syndicalists,
although I don't regard any of them as holy writ, either.
In my opinion, the number one success factor for a civilization is not what theory
it professes, but rather who controls it. Theories will always have to be modified to
suit the circumstances; but the character of a people is much harder to change.
China's prospering because it's controlled by Chinese engineers; our civilization is
suffocating because it's controlled by Jew-bankers and Masonic lawyers. Get rid of them
first, and we can debate monetary theory till we're blue in the face.
@Captain Willard You
must be under the delusion we live in a Constitutional Republic.
Oligarchy (from Greek ὀλιγαρχία
(oligarkhía); from ὀλίγος (olígos),
meaning 'few', and ἄρχω (arkho), meaning 'to rule or to
command')[1][2][3] is a form of power structure in which power rests with a small number of
people. These people may be distinguished by nobility, wealth, family ties, education or
corporate, religious, political, or military control. Such states are often controlled by
families who typically pass their influence from one generation to the next, but inheritance
is not a necessary condition for the application of this term.
@redmudhooch "
Socialism is government by the working class"
Socialism is government by the ruling honchos who have figured out how to appear as
altruistic saviors while living the life of Riley and holding the carrot of prosperity in
front of the noses of the disenfranchised peasants.
Your transparent mindset of : Socialism never worked because the wrong people were in
charge of every attempt to actualize it, and if the right folks go at it in the "right"
manner it will finally work., has been exposed as the lie it is.
This nonsense of : the Russians, Chinese, all of East Europe, Cuba, Venezuela, etc, etc.
they really did not understand Marx, and they really did not want to establish a true "
Farmers and Workers paradise", as according to Marx, so if we, the new generation of "Woke"
"Jungsozialisten", if we go at it, there will be no failure this time, this nonsense has run
it time and more and more otherwise unknowing peoples are finally waking up it's the lies and
madness
Myself, I spent time in the seventies behind the "Iron Curtain" before the wall came down
and I will never forget the morgue-like atmosphere of the grey cities and the dead eyes of
the hopeless natives, and ignoranti like you are striving to repeat these humans tragedies
over and over, regardless of how many time they fail and how much travail and suffering they
generate.
Authenticjazzman "Mensa" qualified since 1973, airborne trained US Army vet, and pro jazz
artist.
@Stephen Paul Foster "
The profit motive" after being replaced with the Socialist rubber-stamp which holds power of
life or death over it's hapless subjects, and make no bones about wielding it's ruthless
fatal power, would seem like altruism and benevolency in retrospect.
@ploni almoniT
he runaway over-use of the narcissism cliché has been fueled mostly by copy-cats with
weak vocabularies who use it deliriously as a general purpose put-down of men who aren't
slobs.
"... It would seem that many of the Trotskyites of the past have now become neocons favouring capitalism and imperialist military intervention under guise of "human rights" promotion, as have some other communists. ..."
@Commentator Mike
Today's system is a hybrid of a late finance-stage global capitalism and cultural–not
economic–Marxism. Instead of class struggle, we have identity politics. Instead of the
ownership of the means of production, we have tranny bathrooms.
So the right-wingers (like Peter Hitchens) who say that 'Marxism won' are half right
culturally, not economically. What causes all the confusion (among the libertarian types
especially) is that capitalism in reality does not in any way resemble how it ought to
work according to libertarian theories and never did. But when you point out to them
that capitalism never worked in practice to begin with, they answer: 'But true
capitalism has never even been tried!' And of course, they're right. 'True' capitalism (i.e.,
what libertarian theory calls capitalism) really never has been tried, and for exactly the
same reason that perpetual motion machines have never been tried either: they're
impossible.
None of which means I'm a 'pure' socialist. I'm open to mixed-economies and new
experiments. I usually characterize myself more as a national socialist, mostly to
differentiate myself from the 'world revolution' Trotskyite socialists who now predominate on
the far-left.
That means I also take some inspiration from some fascists and national-syndicalists,
although I don't regard any of them as holy writ, either.
In my opinion, the number one success factor for a civilization is not what theory
it professes, but rather who controls it. Theories will always have to be modified to
suit the circumstances; but the character of a people is much harder to change.
China's prospering because it's controlled by Chinese engineers; our civilization is
suffocating because it's controlled by Jew-bankers and Masonic lawyers. Get rid of them
first, and we can debate monetary theory till we're blue in the face.
I think that applying the old concepts of Marxism is no longer possible in the west since
there is hardly a genuine proletariat as a proper class any more with the deindustrialisation
and the transfer of major industries to China and other Asian and Latin American countries.
On the other hand the lumpenproletariat has grown and will grow further with greater
automation in industry.
Many more people are now unemployed, underemployed, in service industries, part-time and
temporary jobs, or ageing old age pensioners and retirees.
With the greater atomisation of the individual, break up of families, greater mobility,
the concept of classes rooted long-term in their communities seems less applicable. You could
say most of the global proletariat is now in China.
It would seem that many of the Trotskyites of the past have now become neocons favouring
capitalism and imperialist military intervention under guise of "human rights" promotion, as
have some other communists.
Paul Edward Gottfried's "The Strange Death of Marxism" seems to offer some explanations
but is not of much use in developing a new activism capable of taking on the system or
providing a more viable alternative.
classical concepts of socialism and capitalism, and left and right politics
The left/right concept is no longer valid. For one thing, of what use is a $15. minimum
wage (apparently a standard "left" plank) if there aren't any jobs? Take a look at Andrew
Yang. At least he is posing the right questions.
Andrew Yang's Pitch to America – We Must Evolve to a New Form of
Capitalism
@Digital Samizdat
Excellent intelligence. As opposed to the "high IQ" idiocy promulgated on here.
You may like the way an acquaintance, a PhD from Chicago School of Business, who had just
finished working on a project for Big Pharma, observed when I brought up the concept of "free
market."
"'Free market?!'" he exclaimed. "No such thing. Because it's all crooked."
The book adhere to "classic" line of critique of neoliberalism as a new "secular religion" ( the author thinking is along the lines
of Gramsci idea of "cultural hegemony"; Gramsci did not use the term 'secular religion" at all, but this close enough concept) that
deified the market. It stress the role of the state in enforcing the neoliberalism.
The book adhere to "classic" line of critique of neoliberalism as a new "secular religion" ( the author thinking is along the
lines of Gramsci idea of "cultural hegemony"; Gramsci did not use the term 'secular religion" at all, but this is close enough
concept) that deified the market. It stresses the role of the state in enforcing the neoliberal ideology much like was the case
with Bolsheviks in the USSR:
Gramsci's question is still pressing: How and why do ordinary working folks come to accept a system where wealth is produced
by their collective labors and energies but appropriated individually by only a few at the top? The theory of hegemony suggests
that the answer to this question is not simply a matter of direct exploitation and control by the capitalist class. Rather,
hegemony posits that power is maintained through ongoing, ever-shifting cultural processes of winning the consent of the governed,
that is, ordinary people like you and me.
According to Gramsci, there was not one ruling class, but rather a historical bloc, "a moving equilibrium" of class interests
and values. Hegemony names a cultural struggle for moral, social, economic, and political leadership; in this struggle, a field
-- or assemblage -- of practices, discourses, values, and beliefs come to be dominant. While this field is powerful and firmly
entrenched, it is also open to contestation. In other words, hegemonic power is always on the move; it has to keep winning
our consent to survive, and sometimes it fails to do so.
Through the lens of hegemony, we can think about the rise of neoliberalism as an ongoing political project -- and class struggle
-- to shift society's political equilibrium and create a new dominant field. Specifically, we are going to trace the shift
from liberal to neoliberal hegemony. This shift is represented in the two images below.
Previous versions of liberal hegemony imagined society to be divided into distinct public and private spheres. The public
sphere was the purview of the state, and its role was to ensure the formal rights and freedoms of citizens through the rule
of law. The private sphere included the economy and the domestic sphere of home and family.
For the most part, liberal hegemony was animated by a commitment to limited government, as the goal was to allow for as
much freedom in trade, associations, and civil society as possible, while preserving social order and individual rights. Politics
took shape largely around the line between public and private; more precisely, it was a struggle over where and how to draw
the line. In other words, within the field of liberal hegemony, politics was a question of how to define the uses and limits
of the state and its public function in a capitalist society. Of course, political parties often disagreed passionately about
where and how to draw that line. As we'll see below, many advocated for laissez-faire capitalism, while others argued for a
greater public role in ensuring the health, happiness, and rights of citizens. What's crucial though is that everyone agreed
that there was a line to be drawn, and that there was a public function for the state.
As Figure 1.1 shows, neoliberal hegemony works to erase this line between public and private and to create an entire society
-- in fact, an entire world -- based on private, market competition. In this way, neoliberalism represents a radical reinvention
of liberalism and thus of the horizons of hegemonic struggle. Crucially, within neoliberalism, the state's function does not
go away; rather, it is deconstructed and reconstructed toward the new' end of expanding private markets.
This view correlates well with the analysis of Professor Wendy Brown book "Undoing the Demos" and her paper "Neoliberalism
and the End of Liberal Democracy" (pdf is freely available)
In this sense neoliberalism are just "Trotskyism for the rich" with the same utopian dream of global neoliberal revolution,
but much more sinister motives. And is as ruthless in achieving its goals, if necessary bring neoliberal "regime change" on the
tips of bayonets, or via 'cultural revolutions".
If we follow the line of thinking put forward by Professor Philip Mirowski's in his book "Never Let a Serious Crisis Go to
Waste: How Neoliberalism Survived the Financial Meltdown," we can say that neoliberals essentially "reverse-engineered" Bolsheviks
methods of acquiring and maintaining political power, replacing "dictatorship of proletariat" with the "dictatorship of financial
oligarchy".
I would say more: The "professional revolutionary" cadre that were the core of Bolshevik's Party were replaced with well paid,
talented intellectual prostitutes at specially created neoliberal think tanks. And later "infiltrated" in economic departments
(kind of stealth coup d'état in academia financed by usual financial players).
Which eventually created a critical mass of ideas which were able to depose New Deal Capitalism ideology, putting forward the
set of remedies that restore the power the financial oligarchy enjoyed in 1920th. Technological changes such as invention of computers
and telecommunication revolution also helped greatly.
At the same time unlike Bolsheviks, neoliberals are carefully hiding their agenda. Funny, neoliberalism is the only known to
me major ideology which the US MSM are prohibited to mention by name ;-)
The role of state under neoliberalism is very close to the role of state under Bolsheviks' "dictatorship of proletariats".
It no way this still a liberal democracy -- this is what Sheldon Wolin called "inverted totalitarism". Less brutal then Bolsheviks'
regime, but still far from real democracy. Under neoliberalism the state is a powerful agent needed to enforce markets on unsuspecting
population in all spheres of life, whether they want it or not (supported by 12" guns of neoliberal MSM battleships):
As Figure 1.1 shows, neoliberal hegemony works to erase this line between public and private and to create an entire society
-- in fact, an entire world -- based on private, market competition. In this way, neoliberalism represents a radical reinvention
of liberalism and thus of the horizons of hegemonic struggle. Crucially, within neoliberalism, the state's function does not
go away; rather, it is deconstructed and reconstructed toward the new' end of expanding private markets. Consequently, contemporary
politics take shape around questions of how best to promote competition. For the most part, politics on both the left and right
have been subsumed by neoliberal hegemony. For example, while neoliberalism made its debut in Western politics with the right-wing
administrations of Ronald Reagan and Margaret Thatcher, leaders associated with the left have worked to further neoliberal
hegemony in stunning ways. As we will explore in more depth below and in die coming chapters, both U.S. presidents Bill Clinton
and Barack Obama have governed to create a privatized, market society. In other words, there is both a left and a right hegemonic
horizon of neoliberalism. Thus, moving beyond neoliberalism will ultimately require a whole new field of politics.
One of the most interesting part of the book is the brief analysis of the recent elections (with very precise characterization
of Hillary Clinton defeat as the defeat of the "neoliberal status quo"). The author claims that Trump supporters were mainly representatives
of the strata of the US society which were sick-and-tied of neoliberalism (note the percentage of Spanish speaking electorate
who voted for Trump), but they were taken for a ride, as instead of rejection of globalism and free movement of labor, Trump actually
represented more right wing, more bastardized version of "hard neoliberalism".
In the period which followed the elections Trump_vs_deep_state emerged as a kind of "neoliberalism in one country" -- much
like Stalin's "socialism in one country". It and did not care one bit about those who voted for him during election . As in classic
"The Moor has done his duty, the Moor can go."
So in a way Trump represents the mirror image of Obama who in the same way betrayed his votes (twice) acting from "soft neoliberalism"
position, while Trump is acting from "hard neoliberalism" position.
On the other hand, we saw' the rise of the Tea Party, a right-wing response to the crisis. While the Tea Party was critical
of status-quo neoliberalism -- especially its cosmopolitanism and embrace of globalization and diversity, which was perfectly
embodied by Obama's election and presidency -- it was not exactly anti-neoliberal. Rather, it was anti-left neoliberalism-,
it represented a more authoritarian, right [wing] version of neoliberalism.
Within the context of the 2016 election, Clinton embodied the neoliberal center that could no longer hold. Inequality. Suffering.
Collapsing infrastructures. Perpetual war. Anger. Disaffected consent. There were just too many fissures and fault lines in
the glossy, cosmopolitan world of left neoliberalism and marketized equality. Indeed, while Clinton ran on status-quo stories
of good governance and neoliberal feminism, confident that demographics and diversity would be enough to win the election,
Trump effectively tapped into the unfolding conjunctural crisis by exacerbating the cracks in the system of marketized equality,
channeling political anger into his celebrity brand that had been built on saying "f*** you" to the culture of left neoliberalism
(corporate diversity, political correctness, etc.) In fact, much like Clinton's challenger in the Democratic primary, Benie
Sanders, Trump was a crisis candidate.
... ... ...
In other words, Trump supporters may not have explicitly voted for neoliberalism, but that's what they got. In fact, as
Rottenberg argues, they got a version of right neoliberalism "on steroids" -- a mix of blatant plutocracy and authoritarianism
that has many concerned about the rise of U.S. fascism.
We can't know what would have happened had Sanders run against Trump, but we can think seriously about Trump, right and
left neoliberalism, and the crisis of neoliberal hegemony. In other words, we can think about where and how we go from here.
As I suggested in the previous chapter, if we want to construct a new world, we are going to have to abandon the entangled
politics of both right and left neoliberalism; we have to reject the hegemonic frontiers of both disposability and marketized
equality. After all, as political philosopher Nancy Fraser argues, what was rejected in the election of 2016 was progressive,
left neoliberalism.
While the rise of hyper-right neoliberalism is certainly nothing to celebrate, it does present an opportunity for breaking
with neoliberal hegemony. We have to proceed, as Gary Younge reminds us, with the realization that people "have not rejected
the chance of a better world. They have not yet been offered one."'
"... While the Tea Party was critical of status-quo neoliberalism -- especially its cosmopolitanism and embrace of globalization and diversity, which was perfectly embodied by Obama's election and presidency -- it was not exactly anti-neoliberal. Rather, it was anti-left neoliberalism-, it represented a more authoritarian, right [wing] version of neoliberalism. ..."
"... Within the context of the 2016 election, Clinton embodied the neoliberal center that could no longer hold. Inequality. Suffering. Collapsing infrastructures. Perpetual war. Anger. Disaffected consent. ..."
"... Both Sanders and Trump were embedded in the emerging left and right responses to neoliberalism's crisis. Specifically, Sanders' energetic campaign -- which was undoubtedly enabled by the rise of the Occupy movement -- proposed a decidedly more "commongood" path. Higher wages for working people. Taxes on the rich, specifically the captains of the creditocracy. ..."
"... In other words, Trump supporters may not have explicitly voted for neoliberalism, but that's what they got. In fact, as Rottenberg argues, they got a version of right neoliberalism "on steroids" -- a mix of blatant plutocracy and authoritarianism that has many concerned about the rise of U.S. fascism. ..."
"... We can't know what would have happened had Sanders run against Trump, but we can think seriously about Trump, right and left neoliberalism, and the crisis of neoliberal hegemony. In other words, we can think about where and how we go from here. As I suggested in the previous chapter, if we want to construct a new world, we are going to have to abandon the entangled politics of both right and left neoliberalism; we have to reject the hegemonic frontiers of both disposability and marketized equality. After all, as political philosopher Nancy Fraser argues, what was rejected in the election of 2016 was progressive, left neoliberalism. ..."
"... While the rise of hyper-right neoliberalism is certainly nothing to celebrate, it does present an opportunity for breaking with neoliberal hegemony. We have to proceed, as Gary Younge reminds us, with the realization that people "have not rejected the chance of a better world. They have not yet been offered one."' ..."
In Chapter 1, we traced the rise of our neoliberal conjuncture back to the crisis of liberalism during the late nineteenth and
early twentieth centuries, culminating in the Great Depression. During this period, huge transformations in capitalism proved impossible
to manage with classical laissez-faire approaches. Out of this crisis, two movements emerged, both of which would eventually shape
the course of the twentieth century and beyond. The first, and the one that became dominant in the aftermath of the crisis, was the
conjuncture of embedded liberalism. The crisis indicated that capitalism wrecked too much damage on the lives of ordinary citizens.
People (white workers and families, especially) warranted social protection from the volatilities and brutalities of capitalism.
The state's public function was expanded to include the provision of a more substantive social safety net, a web of protections for
people and a web of constraints on markets. The second response was the invention of neoliberalism. Deeply skeptical of the common-good
principles that undergirded the emerging social welfare state, neoliberals began organizing on the ground to develop a "new" liberal
govemmentality, one rooted less in laissez-faire principles and more in the generalization of competition and enterprise. They worked
to envision a new society premised on a new social ontology, that is, on new truths about the state, the market, and human beings.
Crucially, neoliberals also began building infrastructures and institutions for disseminating their new' knowledges and theories
(i.e., the Neoliberal Thought Collective), as well as organizing politically to build mass support for new policies (i.e., working
to unite anti-communists, Christian conservatives, and free marketers in common cause against the welfare state). When cracks in
embedded liberalism began to surface -- which is bound to happen with any moving political equilibrium -- neoliberals were there
with new stories and solutions, ready to make the world anew.
We are currently living through the crisis of neoliberalism. As I write this book, Donald Trump has recently secured the U.S.
presidency, prevailing in the national election over his Democratic opponent Hillary Clinton. Throughout the election, I couldn't
help but think back to the crisis of liberalism and the two responses that emerged. Similarly, after the Great Recession of 2008,
we've saw two responses emerge to challenge our unworkable status quo, which dispossesses so many people of vital resources for individual
and collective life. On the one hand, we witnessed the rise of Occupy Wall Street. While many continue to critique the movement for
its lack of leadership and a coherent political vision, Occupy was connected to burgeoning movements across the globe, and our current
political horizons have been undoubtedly shaped by the movement's success at repositioning class and economic inequality within our
political horizon. On the other hand, we saw' the rise of the Tea Party, a right-wing response to the crisis. While the Tea Party
was critical of status-quo neoliberalism -- especially its cosmopolitanism and embrace of globalization and diversity, which was
perfectly embodied by Obama's election and presidency -- it was not exactly anti-neoliberal. Rather, it was anti-left neoliberalism-,
it represented a more authoritarian, right [wing] version of neoliberalism.
Within the context of the 2016 election, Clinton embodied the neoliberal center that could no longer hold. Inequality. Suffering.
Collapsing infrastructures. Perpetual war. Anger. Disaffected consent. There were just too many fissures and fault lines in
the glossy, cosmopolitan world of left neoliberalism and marketized equality. Indeed, while Clinton ran on status-quo stories of
good governance and neoliberal feminism, confident that demographics and diversity would be enough to win the election, Trump effectively
tapped into the unfolding conjunctural crisis by exacerbating the cracks in the system of marketized equality, channeling political
anger into his celebrity brand that had been built on saying "f*** you" to the culture of left neoliberalism (corporate diversity,
political correctness, etc.) In fact, much like Clinton's challenger in the Democratic primary, Benie Sanders, Trump was a crisis
candidate.
Both Sanders and Trump were embedded in the emerging left and right responses to neoliberalism's crisis. Specifically, Sanders'
energetic campaign -- which was undoubtedly enabled by the rise of the Occupy movement -- proposed a decidedly more "commongood"
path. Higher wages for working people. Taxes on the rich, specifically the captains of the creditocracy.
Universal health care. Free higher education. Fair trade. The repeal of Citizens United. Trump offered a different response to
the crisis. Like Sanders, he railed against global trade deals like NAFTA and the Trans-Pacific Partnership (TPP). However, Trump's
victory was fueled by right neoliberalism's culture of cruelty. While Sanders tapped into and mobilized desires for a more egalitarian
and democratic future, Trump's promise was nostalgic, making America "great again" -- putting the nation back on "top of the world,"
and implying a time when women were "in their place" as male property, and minorities and immigrants were controlled by the state.
Thus, what distinguished Trump's campaign from more traditional Republican campaigns was that it actively and explicitly pitted
one group's equality (white men) against everyone else's (immigrants, women, Muslims, minorities, etc.). As Catherine Rottenberg
suggests, Trump offered voters a choice between a multiracial society (where folks are increasingly disadvantaged and dispossessed)
and white supremacy (where white people would be back on top). However, "[w]hat he neglected to state," Rottenberg writes,
is that neoliberalism flourishes in societies where the playing field is already stacked against various segments of society,
and that it needs only a relatively small select group of capital-enhancing subjects, while everyone else is ultimately dispensable.
1
In other words, Trump supporters may not have explicitly voted for neoliberalism, but that's what they got. In fact, as Rottenberg
argues, they got a version of right neoliberalism "on steroids" -- a mix of blatant plutocracy and authoritarianism that has many
concerned about the rise of U.S. fascism.
We can't know what would have happened had Sanders run against Trump, but we can think seriously about Trump, right and left
neoliberalism, and the crisis of neoliberal hegemony. In other words, we can think about where and how we go from here. As I suggested
in the previous chapter, if we want to construct a new world, we are going to have to abandon the entangled politics of both right
and left neoliberalism; we have to reject the hegemonic frontiers of both disposability and marketized equality. After all, as political
philosopher Nancy Fraser argues, what was rejected in the election of 2016 was progressive, left neoliberalism.
While the rise of hyper-right neoliberalism is certainly nothing to celebrate, it does present an opportunity for breaking
with neoliberal hegemony. We have to proceed, as Gary Younge reminds us, with the realization that people "have not rejected the
chance of a better world. They have not yet been offered one."'
Mark Fisher, the author of Capitalist Realism, put it this way:
The long, dark night of the end of history has to be grasped as an enormous opportunity. The very oppressive pervasiveness
of capitalist realism means that even glimmers of alternative political and economic possibilities can have a disproportionately
great effect. The tiniest event can tear a hole in the grey curtain of reaction which has marked the horizons of possibility under
capitalist realism. From a situation in which nothing can happen, suddenly anything is possible again.4
I think that, for the first time in the history of U.S. capitalism, the vast majority of people might sense the lie of liberal,
capitalist democracy. They feel anxious, unfree, disaffected. Fantasies of the good life have been shattered beyond repair for most
people. Trump and this hopefully brief triumph of right neoliberalism will soon lay this bare for everyone to see. Now, with Trump,
it is absolutely clear: the rich rule the world; we are all disposable; this is no democracy. The question becomes: How will we show
up for history? Will there be new stories, ideas, visions, and fantasies to attach to? How can we productively and meaningful intervene
in the crisis of neoliberalism? How can we "tear a hole in the grey curtain" and open up better worlds? How can we put what we've
learned to use and begin to imagine and build a world beyond living in competition? I hope our critical journey through the neoliberal
conjuncture has enabled you to begin to answer these questions.
More specifically, in recent decades, especially since the end of the Cold War, our common-good sensibilities have been channeled
into neoliberal platforms for social change and privatized action, funneling our political energies into brand culture and marketized
struggles for equality (e.g., charter schools, NGOs and non-profits, neoliberal antiracism and feminism). As a result, despite our
collective anger and disaffected consent, we find ourselves stuck in capitalist realism with no real alternative. Like the neoliberal
care of the self, we are trapped in a privatized mode of politics that relies on cruel optimism; we are attached, it seems, to politics
that inspire and motivate us to action, while keeping us living in competition.
To disrupt the game, we need to construct common political horizons against neoliberal hegemony. We need to use our common stories
and common reason to build common movements against precarity -- for within neoliberalism, precarity is what ultimately has the potential
to thread all of our lives together. Put differently, the ultimate fault line in the neoliberal conjiuicture is the way it subjects
us all to precarity and the biopolitics of disposability, thereby creating conditions of possibility for new coalitions across race,
gender, citizenship, sexuality, and class. Recognizing this potential for coalition in the face of precarization is the most pressing
task facing those who are yearning for a new world. The question is: How do we get there? How do we realize these coalitional potentialities
and materialize common horizons?
Ultimately, mapping the neoliberal conjuncture through everyday life in enterprise culture has not only provided some direction
in terms of what we need; it has also cultivated concrete and practical intellectual resources for political interv ention and social
interconnection -- a critical toolbox for living in common. More specifically, this book has sought to provide resources for thinking
and acting against the four Ds: resources for engaging in counter-conduct, modes of living that refuse, on one hand, to conduct one's
life according to the norm of enterprise, and on the other, to relate to others through the norm of competition. Indeed, we need
new ways of relating, interacting, and living as friends, lovers, workers, vulnerable bodies, and democratic people if we are to
write new stories, invent new govemmentalities, and build coalitions for new worlds.
Against Disimagination: Educated Hope and Affirmative Speculation
We need to stop turning inward, retreating into ourselves, and taking personal responsibility for our lives (a task which is ultimately
impossible). Enough with the disimagination machine! Let's start looking outward, not inward -- to the broader structures that undergird
our lives. Of course, we need to take care of ourselves; we must survive. But I firmly believe that we can do this in ways both big
and small, that transform neoliberal culture and its status-quo stories.
Here's the thing I tell my students all the time. You cannot escape neoliberalism. It is the air we breathe, the water in which
we swim. No job, practice of social activism, program of self-care, or relationship will be totally free from neoliberal impingements
and logics. There is no pure "outside" to get to or work from -- that's just the nature of the neoliberalism's totalizing cultural
power. But let's not forget that neoliberalism's totalizing cultural power is also a source of weakness. Potential for resistance
is everywhere, scattered throughout our everyday lives in enterprise culture. Our critical toolbox can help us identify these potentialities
and navigate and engage our conjuncture in ways that tear open up those new worlds we desire.
In other words, our critical perspective can help us move through the world with what Henry Giroux calls educated hope. Educated
hope means holding in tension the material realities of power and the contingency of history. This orientation of educated hope knows
very well what we're up against. However, in the face of seemingly totalizing power, it also knows that neoliberalism can never become
total because the future is open. Educated hope is what allows us to see the fault lines, fissures, and potentialities of the present
and emboldens us to think and work from that sliver of social space where we do have political agency and freedom to construct a
new world. Educated hope is what undoes the power of capitalist realism. It enables affirmative speculation (such as discussed in
Chapter 5), which does not try to hold the future to neoliberal horizons (that's cruel optimism!), but instead to affirm our commonalities
and the potentialities for the new worlds they signal. Affirmative speculation demands a different sort of risk calculation and management.
It senses how little we have to lose and how much we have to gain from knocking the hustle of our lives.
Against De-democratization: Organizing and Collective Coverning
We can think of educated hope and affirmative speculation as practices of what Wendy Brown calls "bare democracy" -- the basic
idea that ordinary' people like you and me should govern our lives in common, that we should critique and try to change our world,
especially the exploitative and oppressive structures of power that maintain social hierarchies and diminish lives. Neoliberal culture
works to stomp out capacities for bare democracy by transforming democratic desires and feelings into meritocratic desires and feelings.
In neoliberal culture, utopian sensibilities are directed away from the promise of collective utopian sensibilities are directed
away from the promise of collective governing to competing for equality.
We have to get back that democractic feeling! As Jeremy Gilbert taught us, disaffected consent is a post-democratic orientation.
We don't like our world, but we don't think we can do anything about it. So, how do we get back that democratic feeling? How do we
transform our disaffected consent into something new? As I suggested in the last chapter, we organize. Organizing is simply about
people coming together around a common horizon and working collectively to materialize it. In this way, organizing is based on the
idea of radical democracy, not liberal democracy. While the latter is based on formal and abstract rights guaranteed by the state,
radical democracy insists that people should directly make the decisions that impact their lives, security, and well-being. Radical
democracy is a practice of collective governing: it is about us hashing out, together in communities, what matters, and working in
common to build a world based on these new sensibilities.
The work of organizing is messy, often unsatisfying, and sometimes even scary. Organizing based on affirmative speculation and
coalition-building, furthermore, will have to be experimental and uncertain. As Lauren Berlant suggests, it means "embracing the
discomfort of affective experience in a truly open social life that no
one has ever experienced." Organizing through and for the common "requires more adaptable infrastructures. Keep forcing the existing
infrastructures to do what they don't know how to do. Make new ways to be local together, where local doesn't require a physical
neighborhood." 5 What Berlant is saying is that the work of bare democracy requires unlearning, and detaching from, our
current stories and infrastructures in order to see and make things work differently. Organizing for a new world is not easy -- and
there are no guarantees -- but it is the only way out of capitalist realism.
Getting back democratic feeling will at once require and help us lo move beyond the biopolitics of disposability and entrenched
systems of inequality. On one hand, organizing will never be enough if it is not animated by bare democracy, a sensibility that each
of us is equally important when it comes to the project of determining our lives in common. Our bodies, our hurts, our dreams, and
our desires matter regardless of our race, gender, sexuality, or citizenship, and regardless of how r much capital (economic,
social, or cultural) we have. Simply put, in a radical democracy, no one is disposable. This bare-democratic sense of equality must
be foundational to organizing and coalition-building. Otherwise, we will always and inevitably fall back into a world of inequality.
On the other hand, organizing and collective governing will deepen and enhance our sensibilities and capacities for radical equality.
In this context, the kind of self-enclosed individualism that empowers and underwrites the biopolitics of disposability melts away,
as we realize the interconnectedness of our lives and just how amazing it feels to
fail, we affirm our capacities for freedom, political intervention, social interconnection, and collective social doing.
Against Dispossession: Shared Security and Common Wealth
Thinking and acting against the biopolitics of disposability goes hand-in-hand with thinking and acting against dispossession.
Ultimately, when we really understand and feel ourselves in relationships of interconnection with others, we want for them as we
want for ourselves. Our lives and sensibilities of what is good and just are rooted in radical equality, not possessive or self-appreciating
individualism. Because we desire social security and protection, we also know others desire and deserve the same.
However, to really think and act against dispossession means not only advocating for shared security and social protection, but
also for a new society that is built on the egalitarian production and distribution of social wealth that we all produce. In this
sense, we can take Marx's critique of capitalism -- that wealth is produced collectively but appropriated individually -- to heart.
Capitalism was built on the idea that one class -- the owners of the means of production -- could exploit and profit from the collective
labors of everyone else (those who do not own and thus have to work), albeit in very different ways depending on race, gender, or
citizenship. This meant that, for workers of all stripes, their lives existed not for themselves, but for others (the appropriating
class), and that regardless of what we own as consumers, we are not really free or equal in that bare-democratic sense of the word.
If we want to be really free, we need to construct new material and affective social infrastructures for our common wealth. In
these new infrastructures, wealth must not be reduced to economic value; it must be rooted in social value. Here, the production
of wealth does not exist as a separate sphere from the reproduction of our lives. In other words, new infrastructures, based on the
idea of common wealth, will not be set up to exploit our labor, dispossess our communities, or to divide our lives. Rather, they
will work to provide collective social resources and care so that we may all be free to pursue happiness, create beautiful and/or
useful things, and to realize our potential within a social world of living in common. Crucially, to create the conditions for these
new, democratic forms of freedom rooted in radical equality, we need to find ways to refuse and exit the financial networks of Empire
and the dispossessions of creditocracy, building new systems that invite everyone to participate in the ongoing production of new
worlds and the sharing of the wealth that we produce in common.
It's not up to me to tell you exactly where to look, but I assure you that potentialities for these new worlds are everywhere
around you.
I changed the term Capitalism to Neoliberalism, as Capitalism has multiple forms incliudong
New DealCapitalism and Neoliberlaism. It is Neoliberlaism that won in 1980 with "Reagan
revolution."
Good to see an article that doesn't blame only the "Jews" seems some people here have a
terrible time believing that there can be more than 1 single cause of wars or other troubles.
I thought all our military heros were required to read and understand Sun Tzu's Art of
War? Seems they skipped a few chapters and cheated on the exam.
Neoliberalism always fails. Neoliberalism is growing and the white population is dying
.hmmmm
The 'flaw' (intentional) in Neoliberalism is that it was never intended to improve the
conditions of the common man. Capital, was only ever intended to fill the coffers of princes,
kings, dukes, barons and lesser nobles so that they would have a medium of exchange for
services that they, themselves, were incapable of producing/providing.
And, as we now see the full long term 'effects' of Neoliberalism, wealth disparity,
homelessness, drug addiction, increased suicide rates, lowered longevity, stagnant wages,
staggeringly high personal, corporate, and sovereign debt levels, increases in personal
bankruptcy (particularly health care related), predatory lending, a monopolistic private
sector, corporate dominance of government (think ALEC and uncontrolled corporate lobbying),
unrestricted immigration (think removal of sanctions on employers for illegals), destruction
of unions (& pensions), encouragement of offshoring and destructive mergers and
acquisitions via changes to the tax code, massive overspending on the military along with an
aggressive empire-building posture, trickle down economics, etc.
The current situation in the U.S. should not be a surprise it started about 38 years ago.
You voted for it and now you will have to live with it. China is indeed kicking our ass, our
"leaders" are far too corrupt to change course, we've hit the iceberg already.
No one can serve two masters. Either you will hate the one and love the other, or you will
be devoted to the one and despise the other. You cannot serve both God and money.
Welcome to the Saint Reagan Revolution. Have a nice day .
@TKK immigrate a
replacement population if not hostile? Why would you export your industry if not hostile?
You don't dig out and convert your economy to first world standards overnight.
So, the trend lines are clear. The West and U.S. is a finance oligarchy in decline, while
Russia is on a ascendant path. These lines will cross over at some point in near future. One
could even squint and say that Russia is no longer an Oligarchy of special interests, and is
moving into Byzantium mode e.g. symphony of Church and State. Many Russian thinkers are
projecting another 40 years or so to consolidate the gains.
Thanks for opening a discussion on this article, b. I also recommend the Orlov
translation, since the writing is complex. I am currently reading Dostoievski's "The Devils"
(translated as "The Possessed" in most English editions) and after going through the old copy
I have, will acquire a more recent translation to go deeper in. I think it is important
historically as assisting me in acquiring somewhat the perspective being brought in the
Surkov article.
It is interesting that in the center of the novel (published in the 1870's) liberalism is
being taken to its distorted extreme by a small group of would-be anarchists whose proposals
have a modern twist to them as codified by one of their would-be leaders:
"...In the first place, there is a lowering of the level of education, science, and
art...the thirst for knowledge is an aristocratic thirst. No sooner do we have a family and
experience love than we begin to desire to own things. We shall kill that desire; we shall
spread drunkenness, gossip, information on others...everything must be reduced to the common
denominator of complete equality...
"... This is the behavior of a media class that is interested in selling narratives, not reporting truth. And yet the mass media talking heads are all telling us today that we must continue to trust them. ..."
"... More accountability in media than in politics, Chuck? Really? Accountability to whom? Your advertisers? Your plutocratic owners? Certainly not to the people whose minds you are paid exorbitant sums to influence; there are no public elections for the leadership of the mass media. ..."
"... CNN, for the record, has been guilty of an arguably even more embarrassing Russiagate flub than Buzzfeed 's when they wrongly reported that Donald Trump Jr had had access to WikiLeaks' DNC email archives prior to their 2016 publication, an error that was hilariously due to to the simple misreading of an email date by multiple people ..."
"... The mass media, including pro-Trump mass media like Fox News, absolutely deserves to be distrusted. It has earned that distrust. It had earned that distrust already with its constant promotion of imperialist wars and an oligarch-friendly status quo, and it has earned it even more with its frenzied promotion of a narrative engineered to manufacture consent for a preexisting agenda to shove Russia off the world stage. ..."
"... The mainstream media absolutely is the enemy of the people; just because Trump says it doesn't mean it's not true. The only reason people don't rise up and use the power of their numbers to force the much-needed changes that need to happen in our world is because they are being propagandized to accept the status quo day in and day out by the mass media's endless cultural engineering project . ..."
"... They are the reason why wars go unopposed, why third parties never gain traction, why people consent to money hemorrhaging upward to the wealthiest of the wealthy while everyone else struggles to survive. The sooner people wake up from the perverse narrative matrix of the plutocratic media, the better. ..."
Following what the Washington Post
has described as "the highest-profile misstep yet for a news organization during a period
of heightened and intense scrutiny of the press," mass media representatives are now flailing
desperately for an argument as to why people should continue to place their trust in mainstream
news outlets.
On Thursday Buzzfeed News delivered
the latest "bombshell" Russiagate report to fizzle within 24 hours of its publication, a
pattern that is now so consistent that I've personally made a practice of declining to comment
on such stories until a day or two after their release. "BOOM!" tweets were issued by
#Resistance pundits on Twitter, "If true this means X, Y and Z" bloviations were made on mass
media punditry panels, and for about 20 hours Russiagaters everywhere were riding the high of
their lives, giddy with the news that President Trump had committed an impeachable felony by
ordering Michael Cohen to lie to Congress about a proposed Trump office tower in Moscow, a
proposal which died within weeks
and the Kremlin never touched .
There was reason enough already for any reasonable person to refrain from frenzied
celebration, including the fact that the story's two authors, Jason Leopold and Anthony
Cormier, were giving the press two very different accounts of
the information they'd based it on, with Cormier telling CNN that he had not personally seen
the evidence underlying his report and Leopold telling MSNBC that he had. Both Leopold and
Cormier, for the record, have already previously suffered a
Russiagate faceplant with the clickbait viral story that Russia had financed the 2016
election, burying the fact that it was a Russian election .
Then the entire story came crashing down when Mueller's office took the extremely rare step
of issuing an
unequivocal statement that the Buzzfeed story was wrong , writing simply, "BuzzFeed's
description of specific statements to the special counsel's office, and characterization of
documents and testimony obtained by this office, regarding Michael Cohen's congressional
testimony are not accurate."
According to journalist and economic analyst Doug Henwood, the print New York Times covered
the Buzzfeed report on its front page when the story broke, but the report on Mueller's
correction the next day was shoved back to page 11 .
This appalling journalistic malpractice makes it very funny that NYT's Wajahat Ali had the gall
to tweet , "Unlike the Trump
administration, journalists are fact checking and willing to correct the record if the Buzzfeed
story is found inaccurate. Not really the actions of a deep state and enemy of the people,
right?"
This is the behavior of a media class that is interested in selling narratives, not
reporting truth. And yet the mass media talking heads are all telling us today that we must
continue to trust them.
"Those trying to tar all media today aren't interested in improving journalism but
protecting themselves," tweeted NBC's Chuck Todd.
"There's a lot more accountability in media these days than in our politics. We know we
live in a glass house, we hope the folks we cover are as self aware."
More accountability in media than in politics, Chuck? Really? Accountability to whom? Your
advertisers? Your plutocratic owners? Certainly not to the people whose minds you are paid
exorbitant sums to influence; there are no public elections for the leadership of the mass
media.
"Mueller didn't do the media any favors tonight, and he did do the president one,"
griped
the odious Chris Cuomo on CNN. "Because as you saw with Rudy Giuliani and as I'm sure
you'll see with the president himself, this allows them to say 'You can't believe it! You can't
believe what you read, you can't believe what you hear! You can only believe us. Even the
Special Counsel says that the media doesn't get it right.'"
"The larger message that a lot of people are going to take from this story is that the
news media are a bunch of leftist liars who are dying to get the president, and they're
willing to lie to do it, and I don't think that's true" said Jeffrey Toobin on a CNN panel , adding "I
just think this is a bad day for us."
"It does reinforce bad stereotypes about the news media," said Brian Stelter on the same CNN
panel.
"I am desperate as a media reporter to always say to the audience, judge folks
individually and judge brands individually. Don't fall for what these politicians out there
want you to do. They want you to think we're all crooked. We're not. But Buzzfeed now, now
the onus is on Buzzfeed. "
CNN, for the record, has been guilty of an arguably
even more embarrassing Russiagate flub than Buzzfeed 's when they wrongly reported that
Donald Trump Jr had had access to WikiLeaks' DNC email archives prior to their 2016
publication, an error that was hilariously due to to the simple misreading of an email date by
multiple people.
The mass media, including pro-Trump mass media like Fox News, absolutely deserves to be
distrusted. It has earned that distrust. It had earned that distrust already with its constant
promotion of imperialist wars and an oligarch-friendly status quo, and it has earned it even
more with its frenzied promotion of a narrative engineered to manufacture consent for a
preexisting agenda to shove Russia off the world stage.
The mainstream media absolutely is the enemy of the people; just because Trump says it
doesn't mean it's not true. The only reason people don't rise up and use the power of their
numbers to force the much-needed changes that need to happen in our world is because they are
being propagandized to accept the status quo day in and day out by the mass media's endless
cultural engineering project .
They are the reason why wars go unopposed, why third parties
never gain traction, why people consent to money hemorrhaging upward to the wealthiest of the
wealthy while everyone else struggles to survive. The sooner people wake up from the perverse
narrative matrix of the plutocratic media, the better.
"... Olivier Blanchard, former chief economist of the International Monetary Fund, who recently posed the once-blasphemous question: "What comes after capitalism?" ..."
"... He rightly described a global impasse: "Given the political constraints on redistribution and the constraints from capital mobility, we may just not be able to alleviate inequality and insecurity enough to prevent populism and revolutions." ..."
"... Martin Wolf, respected columnist for the Financial Times, recently concluded, if "reluctantly," that "capitalism is substantially broken." This year, many books with titles such as "The Myth of Capitalism: Monopolies and the Death of Competition" and "Winners Take All: The Elite Charade of Changing the World" blamed an unjust economic system and its beneficiaries for the rise of demagogues. ..."
"... Reading Mazzucato's book, it is hard not to wonder just how "neoliberal" ideas and values, which uphold the rationality of the market and exclude notions of the common good, came to shape the conduct of individuals and institutions. ..."
"... Neoliberals, he argues, are people who believe that "the market does not and cannot take care of itself," and indeed neoliberalism is a form of regulation -- one that insulates the markets from vagaries of mass democracy and economic nationalism. ..."
...A Western consensus quickly formed after the collapse of communist regimes in 1989. It was widely believed by newspaper editorialists
as well as politicians and businessmen that there was no alternative to free markets, which alone could create prosperity. The government's
traditional attempts to regulate corporations and banks and redistribute wealth through taxes were deemed a problem. As the economist
Milton Friedman put it, "The world runs on individuals pursuing their separate interests." Neither individuals nor companies needed
to worry much about inequality or social justice. In Friedman's influential view, "There is one and only one social responsibility
of business -- to use its resources and engage in activities designed to increase its profits."
Political fiascos in the West, following its largest financial crisis -- events accompanied by the emergence of China, a Communist-run
nation-state, as a major economic power, as well as an unfolding environmental calamity -- have utterly devastated these post-1989
assumptions about free markets and the role of governments.
Confessions to this effect come routinely from disenchanted believers. Take, for instance, Olivier Blanchard, former chief
economist of the International Monetary Fund, who recently posed the once-blasphemous question: "What comes after capitalism?"
Blanchard was commenting on the recent demonstrations in France against President Emmanuel Macron. He rightly described a
global impasse: "Given the political constraints on redistribution and the constraints from capital mobility, we may just not be
able to alleviate inequality and insecurity enough to prevent populism and revolutions."
... ... ...
Thus, Martin Wolf, respected columnist for the Financial Times, recently concluded, if "reluctantly," that "capitalism is
substantially broken." This year, many books with titles such as "The Myth of Capitalism: Monopolies and the Death of Competition"
and "Winners Take All: The Elite Charade of Changing the World" blamed an unjust economic system and its beneficiaries for the rise
of demagogues.
It is becoming clear that the perennial conflict between democracy, which promises equality, and capitalism, which generates inequality,
has been aggravated by a systemic neglect of some fundamental issues.
... ... ...
Her targets range from pharmaceutical companies, which uphold a heartless version of market rationality, to internet companies
with monopoly power such as Google and Facebook. Her most compelling example, however, is the workings of the financial sector, and
its Friedman-style obsession with "shareholder value maximization," which has infected the corporate sector as a whole.
Reading Mazzucato's book, it is hard not to wonder just how "neoliberal" ideas and values, which uphold the rationality of
the market and exclude notions of the common good, came to shape the conduct of individuals and institutions.
In the conventional account of neoliberalism, Friedman looms large, along with his disciple Ronald Reagan, and Britain's Margaret
Thatcher. Much has been written about how the IMF's structural adjustment programs in Asia and Africa, and "shock-therapy" for post-Communist
states, entrenched orthodoxies about deregulation and privatization.
In these narratives, neoliberalism appears indistinguishable from laissez-faire. In "Globalists: The End of Empire and the Birth
of Neoliberalism," Quinn Slobodian briskly overturns this commonplace view. Neoliberals, he argues, are people who believe that
"the market does not and cannot take care of itself," and indeed neoliberalism is a form of regulation -- one that insulates the
markets from vagaries of mass democracy and economic nationalism.
... ... ...
Pankaj Mishra is a Bloomberg Opinion columnist. His books include "Age of Anger: A History of the Present," "From the Ruins
of Empire: The Intellectuals Who Remade Asia," and "Temptations of the West: How to Be Modern in India, Pakistan, Tibet and Beyond."
For more articles like this, please visit us at bloomberg.com/opinion
"... You can take this to the bank. Hardcore Russiagaters will never give up their belief in collusion and Russian influence in the 2016 campaign -- never. Congress and Mueller will be accused of engaging in a coverup. ..."
"... Thus, even if the Mueller report is underwhelming, I think that the Democrats and TDS-saturated Trump opponents will attempt to rehabilitate it by pretending that it contains important loose ends that need to be pursued. In other words, to perpetuate the Mueller-driven political Russophobia by all other available means. ..."
"... Russiagate has exposed the great degree of corruption within the Justice Department bureaucracy, particularly within FBI, and within the entire Democrat Party. ..."
"... Since this is obviously not going to be allowed to happen, and since these people get away with everything, expect this to never end, despite all evidence to the contrary. It doesn't matter if they've been exposed as CIA propagandists or Integrity Initiative stooges, the game goes on...and on.... the job security of these disgraced columnists is the greatest in the Western world. ..."
"... Stephen Cohen discusses how rational viewpoints are banned from the mainstream media, and how several features of US life today resemble some of the worst features of the Soviet system. https://www.counterpunch.org/2019/02/12/stephen-cohen-on-war-with-russia-and-soviet-style-censorship-in-the-us/ ..."
"... The US needs an enemy, how else can they ask NATO members to cough up 2% of GDP [just for one example Germany's GDP is nearly 4 Trillion dollars [2017] for defence spending, what a crazy sum all NATO members must fork out to please the US, but then most of that money must be spent on the US MIC 'interoperability' of course. ..."
"... Another great damage of Russiagate was the instigating of a nuclear arms race directed primarily at Russia, and ideologically justified by its diabolical policies. ..."
"... Russiagate was very successful. You just have to understand the objectives. It was a great distraction. Diverting peoples attention from the continued fleecing of the "real people" which are the bottom 90% by the "Corporate People" and their Government Lackeys. ..."
"... It provided an excuse for the acting CEO (a figurehead) of the Corporate Empire to go back on many of the promises made that got him elected, and to fill the swamp with Neocon and Koch Brother creatures with the excuse the Deep State made him do it. More proof that there is no deception that is too ridiculous to be believed so long as you have enough pundits claiming it to be so ..."
"... If you've done just a cursory look into Seth Rich, you'd be very suspicious about the story of his life and death. IMO Assange/Wikilleaks were set up. And Flynn was set up too. What they are doing is Orwellian: White Helmets, election manipulation, propaganda, McCarthism, etc. If you're not angry, you're not paying attention. ..."
"... See also this primer on Mueller's MO. ..."
"... The button pushers behind the Trump collusion and Russia election hacking false narratives got what they wanted: to walk the democrats and republicans straight into Cold War v2; to start their campaign to suppress alternative voices on the internet; to increase military spending; and more, more, more war. ..."
"... Russiagate was very successful <=pls read, re-read Pft @ 46.. he listed many things. divide and conquer accomplished. a nation state is defined as an armed rule making structure, designed by those who control a territory, and constructed by the lawyers, military, and wealthy and run by the persons the designers appoint, for the appointed are called politicians. ..."
"... At the beginnng of Russiagate, I wrote on Robert Parry's Consirtium News that Russiagate is Idiocracy piggy-backing on decades and literally billions of dollars of anti-Soviet and anti-Russian propaganda. How hard would it be to brainwash an already brainwashed population? ..."
"... The purveyors of Russiagate will re-compose themselves, brush off all reports and continue on. One just cannot get away from one's nature, even when that nature is pure idiocy. ..."
"... Russiagate will not go away unfortunately because it has evolved in the "Russiagate Industry". As mentioned by others, the Russiagate Industry has been very profitable for many industries and people. Russiagate has generated an entire cottage industry of companies around censorship and "find us a Russian". Dow Jones should have an index on the Russiagate Industry. ..."
For more than two years U.S. politicians, the media and some bloggers hyped a conspiracy theory. They claimed that Russia had
somehow colluded with the Trump campaign to get him elected.
An obviously fake 'Dirty Dossier' about Trump, commissioned by the Clinton campaign, was presented as evidence. Regular business
contacts between Trump flunkies and people in Ukraine or Russia were claimed to be proof for nefarious deals. A Russian
click-bait company was accused of manipulating the U.S. electorate by posting puppy pictures and crazy memes on social media.
Huge investigations were launched. Every rumor or irrelevant detail coming from them was declared to be - finally - the evidence
that would put Trump into the slammer. Every month the walls were closing in on Trump.
Finally the conspiracy theory has run out of steam. Russiagate
is finished :
After two years and 200 interviews, the Senate Intelligence Committee is approaching the end of its investigation into the 2016
election, having uncovered no direct evidence of a conspiracy between the Trump campaign and Russia, according to both Democrats
and Republicans on the committee.
...
Democrats and other Trump opponents have long believed that special counsel Robert Mueller and Congressional investigators would
unearth new and more explosive evidence of Trump campaign coordination with Russians. Mueller may yet do so, although Justice
Department and Congressional sources say they believe that he, too, is close to wrapping up his investigation.
Nothing, zero, nada was found to support the conspiracy theory. The Trump campaign did not collude with Russia. A few flunkies
were indicted for unrelated tax issues and for lying to the investigators about some minor details. But nothing at all supports the
dramatic claims of collusion made since the beginning of the affair.
In a recent statement House leader Nancy Pelosi was reduced
to accuse Trump campaign officials of doing their job:
"The indictment of Roger Stone makes clear that there was a deliberate, coordinated attempt by top Trump campaign officials to
influence the 2016 election and subvert the will of the American people. ...
No one called her out for spouting such nonsense.
Russiagate created a lot of damage.
The alleged Russian influence campaign that never happened was used to
install censorship on social media. It was used
to undermine the election of progressive Democrats. The weapon salesmen used it to push for more NATO aggression against Russia.
Maria Butina, an innocent Russian woman interested in good relation with the United States, was
held in solitary confinement
(recommended) until she signed a paper which claims that she was involved in a conspiracy.
In a just world the people who for more then two years hyped the conspiracy theory and caused so much damage would be pushed out
of their public positions. Unfortunately that is not going to happen. They will jump onto the next conspiracy train continue from
there.
Posted by b on February 12, 2019 at 01:38 PM |
Permalink
Comments next
page " Legally, Maria Butina was suborned into signing a false declaration. If there were the rule of law, such party or
parties that suborned her would be in gaol. Considering Mueller's involvement with Lockerbie, I am not holding my breath. FWIW the
Swiss company that made the timers allegedly involved in Lockerbie have some
comments of its own .
I will be really glad when this 'get Russia' craziness is over, but I suspect even if the Mueller investigation has nothing,
all the same creeps will be pulling out the stops to generate something... Skripal, Integrity Initiative, and etc. etc. stuff
like this just doesn't go away overnight or with the end of this 'investigation'... folks are looking for red meat i tell ya!
as for Maria Butina - i look forward to reading the article.. that was a travesty of justice but the machine moves on, mowing
down anyone in it's way... she was on the receiving end of all the paranoia that i have come to associate with the western msm
at this point...
Hillary's loss is actually best explained as her throwing the election to Trump . The Deep State wanted a nationalist
to win as that would best help meet the challenge from Russia and China - a challenge that they had been slow to recognize.
= ... to smear Wikileaks as a Russian agent
The DNC leak is best explained as a CIA false flag.
= ... to remove and smear Michael Flynn
Trump said that he fired Flynn for lying to VP Pence but Flynn's conversations with the Russian Ambassador after Obama threw
them out for "meddling" in the US election was an embarrassment to the Administration as Putin's Putin's decision not to respond
was portrayed as favoritism toward the Trump Administration.
You can take this to the bank. Hardcore Russiagaters will never give up their belief in collusion and Russian influence in
the 2016 campaign -- never. Congress and Mueller will be accused of engaging in a coverup. This is typical behavior for conspiracy
theorists.
I hope that Russiagate is indeed "finished", but I think it needs to be draped with garlic-clove necklaces, shot up with silver
bullets, sprinkled with holy water, and a wooden stake driven through its black heart just to make sure.
I don't dispute the logical argument B. presents, but it may be too dispassionately rational. I know that the Russiagate
proponents and enthralled supporters of the concept are too invested psychologically in this surrealistic fantasy to let go, even
if the official outcome reluctantly admits that there's no "there" there.
The Democratic Party, one of the major partners mounting the Russophobic psy-op, has already resolved to turn Democratic committee
chairmen loose to dog the Trump administration with hearings aggressively flogging any and all matters that discredit and undermine
Trump-- his business connections, social liaisons, etc.
They may hope to find the Holy Grail: the elusive "bombshell" that "demands" impeachment, i.e., some crime or illicit conduct
so heinous that the public will stand for another farcical impeachment proceeding. But I reckon that the Dems prefer the "soft"
impeachment of harassing Trump with hostile hearings in hopes of destroying his 2020 electability with the death of a thousand
innuendoes and guilt-by-association.
Thus, even if the Mueller report is underwhelming, I think that the Democrats and TDS-saturated Trump opponents will attempt
to rehabilitate it by pretending that it contains important loose ends that need to be pursued. In other words, to perpetuate
the Mueller-driven political Russophobia by all other available means.
Put more succinctly, I fear that Russiagate won't be finished until Rachel Maddow says it's finished. ;)
Once a hypothesis is fixed in people's minds, whether true or not, it's hard to get them to let go of it. And let's not forget
how many times the narrative changed (and this is true in the Skripal case as well), with all past facts vanishing to accommodate
a new narrative.
So I, like others, expect the fake scandal to continue while many, many other real crimes (the US attempted
coup in Venezuela and the genocidal war in Yemen, for instance) continue unabated.
Putin solicits public input for essential national
policy goals . If ever there was a template to follow for an actual MAGAgenda, Putin's Russia provides one. While US politicos
argue over what is essentially Bantha Pudu, Russians are hard at work improving their nation which includes restructuring their
economy.
Russiagate has exposed the great degree of corruption within the Justice Department bureaucracy, particularly within FBI,
and within the entire Democrat Party.
I very much doubt it it is over. Trump is corrupt and has links to corrupt Russians. Collusion, maybe not, but several
stinking individuals are in the frame for, guess what - ...bring it on... The fact that Hilary was arguably even worse (a point
made ad-nauseum on here) is frankly irrelevant. The vilification of Trump will not affect the warmongers efforts. He is a useful
idiot
for a take on the alternative reality some are living in
emptywheel has an article up on the nbc link b provides and the article on butina is discussed in the comments section...
as i said - they are looking for red meat and will not be happy until they get some... they are completely zonkers...
Blooming Barricade , Feb 12, 2019 2:55:18 PM |
link
Now that this racket has been admitted as such, I expect all of the media outlets that devoted banner headlines, hundreds of thousands
of hours of cable TV time, thousands of trees, and free speech online to immediately fire all of their journalists and appoint
Glenn Greenwald as the publisher of the New York Times, Michael Tracey at the Post, Aaron Matte at the Guardian, and Max Blumenthal
at the Daily Beast.
Since this is obviously not going to be allowed to happen, and since these people get away with everything, expect this
to never end, despite all evidence to the contrary. It doesn't matter if they've been exposed as CIA propagandists or Integrity
Initiative stooges, the game goes on...and on.... the job security of these disgraced columnists is the greatest in the Western
world.
The US needs an enemy, how else can they ask NATO members to cough up 2% of GDP [just for one example Germany's GDP is nearly
4 Trillion dollars [2017] for defence spending, what a crazy sum all NATO members must fork out to please the US, but then most
of that money must be spent on the US MIC 'interoperability' of course.
Then of course Russia has to be surrounded by NATO should they try and take over Europe by surging through the Fulda gap./s
Then of course there are the professional pundits who have built careers on anti Russian propaganda, Rachel Maddow for instance
who earns 30,000$ per day to spew anti Russian nonsense.
Another great damage of Russiagate was the instigating of a nuclear arms race directed primarily at Russia, and ideologically
justified by its diabolical policies.
I'm sorry b is so down on Conspiracy Theories, since they reveal quite real staged homicidal false flag operations of US power.
Feeding into the stigmatizing of the truth about reality is not in the interests of the earth's people.
somehow I see this "revelation: tied to Barr's approaching tenure. I think they (FBI/DOJ) didn't want his involvement in their
noodle soup of an investigation and the best way to accomplish that was to end it themselves. I also suspect that a deal has been
made with Trump, possibly in exchange for leaving his family alone.
So we will see no investigation of Hillary, her 650,000
emails or the many crimes they detailed (according to NYPD investigation of Weiner's laptop) and the US will continue to be at
war all day, every day. Team Swamp rules.
Meanwhile, MSM is prepping its readers for the possibility that the Mueller report will never be released to us proles. If that's
the case, I'm sure nobody will try to use innuendo to suggest it actually contains explosive revelations after all...
Harry, its vitally important as the US desperately wants to keep Europe under its thumb and to stop this European army which
means Europe lead by Paris and Berlin becomes a world power. Trump's attempts to make nice with Russia is to keep it out of the
EU bloc.
Well, the liberal conspiracy car crash ensured downmarket Mussolini a second term, it appears...Hard Brexit Tories also look likely
to win thanks to centrist sabatoge of the left. You reap what you sow, corporate presstitutes!
Sane people have predicted the end of Russiagate almost as many times as insane people have predicted that the "smoking gun that
will get rid of Trump" has been found. And yet the Mighty Wurlitzer grinds on, while social media is more and more censored.
I expect it all to continue until the 2020 election circus winds up into full-throated mode, and no one talks about anything but
the next puppet to be appointed. Oops, I mean "elected".
You also need to behead the corpse, stuff the mouth with a lemon and then place the head down in the coffin with the body in
supine (facing up) position. Weight the coffin with stones and wild roses and toss it into a fast-flowing river.
Russiagate won't be finished until a wall is built around Capitol Hill and all its inhabitants and worker bees declared insane
by a properly functioning court of law.
I also suspect that a deal has been made with Trump, possibly in exchange for leaving his family alone. So we will see no
investigation of Hillary ...
Underlying your perspective is the assumption that USA is a democracy where a populist "outsider" could be elected President,
Yet you also believe that Hillary and the Deep State have the power to manipulate government and the intelligence agencies and
propose a "conspiracy theory" based on that power.
Isn't it more likely that Trump made it clear (behind closed doors, of course) that he was amenable to the goals of the Deep
State and that the bogus investigation was merely done to: 1) cover their own election meddling; 2) eliminate threats like Flynn
and Assange/Wikileaks; 3) anti-Russian propaganda?
Dowd, Trump's former lawyer on Russiagate stated there may not even be a report. If this is the case then the Zionist rulers have
gotten to Mueller who no doubt figured out that the election collusion breadcrumbs don't lead to Putin, they lead to Netanyahu
and Zionist billionaire friends! So Mueller may have to come up with a nothing burger to hide the truth.
B is the only alternative media blogger I've followed for a significant amount of time without becoming disenfranchised. Not because
he has no blind spot - his is just one I can deal with... optimism.
I will believe Russiagate is finished when expelled Russian staff gets back, when the US returns the seized Russian properties,
when the consulate is Seattle reopens and when USA issues formal apology to Russia.
Posted by: hopehely | Feb 12, 2019 5:14:49 PM |
link
Nobody has ever advanced the tiniest shred of credible evidence that 'Russia' or its government at any level was in any way implicated
either in Wikileaks' acquisition of the DNC and Podesta emails or in any form of interference with the Presidential election.
This has been going on for three years and not once has anything like evidence surfaced.
On the other hand there has been an abundance of evidence that those alleging Russian involvement consistently refused to listen
to explore the facts.
Incredibly, the DNC computers were never examined by the FBI or any other agency resembling an official police agency. Instead
the notorious Crowdstrike professionally russophobic and caught red handed faking data for the Ukrainians against Russia were
commissioned to produce a 'report.'
Nobody with any sense would have credited anything about Russiagate after that happened.
Thgen there was the proof, from VIPS and Bill Binney (?) that the computers were not hacked at all but that the information
was taken by thumbdrive. A theory which not only Wikileaks but several witnesses have offered to prove.
Not one of them has been contacted by the FBI, Mueller or anyone else "investigating."
In reality the charges from the first were ludicrous on their face. There is, as b has proved and every new day's news attests,
not the slightest reason why anyone in the Russian government should have preferred Trump over Clinton. And that is saying something
because they are pretty well indistinguishable. And neither has the morals or brains of an adolescent groundhog.
Russiagate is over, alright, The Nothingburger is empty. But that means nothing in this 'civilisation': it will be recorded
in the history books, still to be written, by historians still in diapers, that "The 2016 Presidential election, which ended in
the controversial defeat of Hillary Clinton, was heavily influenced by Russian agents who hacked ..etc etc"
What will not be remembered is that every single email released was authentic. And that within those troves of correspondence
there was enough evidence of criminality by Clinton and her campaign to fill a prison camp.
Another thing that will not be recalled is that there was once a young enthusiastic man, working for the DNC, who was mugged
one evening after work and killed.
The 'no collusion' result will only spur the 'beginning of the end' baboons to shout even more, they'll never stop until they
die in their beds or the plebs of the Republic made them adore the street lamp posts, you'll see. The former is by far more likely,
the unwashed of American have never had a penchant for foreign affairs except for the few spasms like Vietnam.
There was collusion alright but the only Russians who helped Trump get elected and were in on the collusion are citizens of ISRAEL
FIRST, likewise for the American billionaires who put Trump in the power perch. ISRAEL FIRST.
That's why Trump is on giant billboards in Israel shaking hands with the Yahoo. Trump is higher in the polls in Israel than
in the U.S. If it weren't that the Zionist upper crust need Trump doing their dirty work in America, like trying today get rid
of Rep. Omar Ilhan, then Trump would win the elections in Ziolandia or Ziostan by a landslide cause he's been better for the Joowish
state than all preceding Presidents put together. Mazel tov to them bullshet for the rest of us servile mass in the vassal West
and Palestinians the most shafted class ever. Down with Venezuela and Iran, up with oil and gas. The billionare shysters' and
Trump's payola is getting closer. Onward AZ Empire!
He proved himself so easy to troll during the election. It wouldn't surprise me if aim of the domestic intelligence agencies all
along was to get him elected and have a candidate they could manipulate.
At least Germany has the good sense not to throw taxpayer money at the F-35.
German F-35 decision sacrifices NATO capability for Franco-German industrial cooperation I don't know what they have
in mind with a proposed airplane purchase. If they need fighters, buy or lease Sweden's Gripen. If attack airplanes are what they're
after, go to Boeing and get some brand new F-15X models. If the prickly French are agreeable to build a 6th generation aircraft,
that would be worth a try.
Regarding Rachel Maddow, I recently had an encounter with a relative who told me 1) I visited too many oddball sites and 2)
he considered Rachel M. to be the most reliable news person in existence. I think we're talking "true believer" here. :)
It wouldn't surprise me if aim of the domestic intelligence agencies all along was to get him elected and have a candidate
they could manipulate.
Considering how those "intelligence agencies" are hard pressed to find their own tails, even if you allow them to use both
hands, it would surprise me.
That Trump would turn out to be a tub of jello in more than just a physical way has been a surprise to an awful lot of us.
Russiagate was very successful. You just have to understand the objectives. It was a great distraction. Diverting
peoples attention from the continued fleecing of the "real people" which are the bottom 90% by the "Corporate People" and their
Government Lackeys.
It provided an excuse for the acting CEO (a figurehead) of the Corporate Empire to go back on many of the promises made
that got him elected, and to fill the swamp with Neocon and Koch Brother creatures with the excuse the Deep State made him do
it. More proof that there is no deception that is too ridiculous to be believed so long as you have enough pundits claiming it
to be so
Allowed the bipartisan support for the clamp down on alt media with censorship by social media (Deep State Tools) and funded
by the Ministry of Truth set up by Obama in his last days in office to under the false pretense of protecting us from foreign
governments interference in elections (except Israel of course) . Similar agencies have been set up or planned to be in other
countries followig the US example such as UK, France, Russia, etc.
Did anyone really expect Mr "Cover It Up " Mueller to find anything? Mueller is Deep State all the way and Trump is as well,
not withstanding the "Fake Wrestling " drama that they are bitter enemies. All the surveillance done over the past 2-3 decades
would have so much dirt on the Trumpet they could silence him forever . Trump knew that going in and I sometimes wonder if he
was pressured to run as a condition to avoid prosecution. Pretty sure every President since Carter has been "Kompromat"
If you've done just a cursory look into Seth Rich, you'd be very suspicious about the story of his life and death. IMO
Assange/Wikilleaks were set up. And Flynn was set up too. What they are doing is Orwellian: White Helmets, election manipulation,
propaganda, McCarthism, etc. If you're not angry, you're not paying attention.
Russians and likely at the behest of the Russian state interfered and it was fair payback for Yeltsin's election. It is time to
move on but not in feigned ignorance of what was done. Was it "outcome" affecting, possibly, but not clearly and if the US electoral
college and electoral system generally is so decrepit that a second level power in the world can influence then its the US's fault.
It's not like the 2000 election wasn't a warning shot about the rottenness of system and a system that doesn't understand a
warning shot deserves pretty much what it gets. But there's enough non-hype evidence of acts and intent to say yes, the Russians
tried and may have succeeded. They certainly are acting guilty enough. but still close the book move and move on to Trump's 'real'
crimes which were done without a Russian assist.
I seem to recall former UK Ambassador to Uzbekistan Craig Murray saying that it was not a hack and that he had been handed
a thumb drive in a field near American University by a disgruntled Democrat whistleblower. Further, I seem to recall William Binney,
former NSA Technical Leader for intelligence, conducting an experiment to show that internet speeds at the time would not allow
the information to be hacked - they knew the size of the files and the period over which they were downloaded. Plus, Seth Rich.
So why does anyone even believe it was a hack, @32 THN?
Just another comment re Mueller. There is a great documentary by (Dutch, not Israeli---different person) Gideon Levy, Lockerbie
Revisited. The narration is in Dutch, but the interviews are in English, and there is a small segment of a German broadcast. The
documentary ends abruptly where one set of FBI personnel contradict statements by another set of FBI personnel. See also
this primer on Mueller's MO.
reply to Les 42
"It wouldn't surprise me if aim of the domestic intelligence agencies all along was to get him elected and have a candidate they
could manipulate."
Not the intelligence agencies, the Military IMO. They knew HC for what she was; horrifically corrupt and,again IMO,they know
she is insane.
They saw and I think still see Trump as someone they could work with, remember Rogers (Navy) of the NSA going to him immediately
once he was elected? That was the Military protecting him as best they could.
They IMO have kept him alive and as long as he doesn't send any troops into "real" wars, they will keep on keeping him alive.
This doesn't mean Trump hasn't gone over to the Dark Side, just that no military action will take place that the military command
doesn't fully support.
Again, I could be wrong, he could be backed by fiends from Patagonia for all I really know:)
The button pushers behind the Trump collusion and Russia election hacking false narratives got what they wanted: to walk the
democrats and republicans straight into Cold War v2; to start their campaign to suppress alternative voices on the internet; to
increase military spending; and more, more, more war.
Boy, I hope Jackrabbit sees this. Everyone knows I believe Trump is the anointed chosen of the Zionist 1%. There was no Russia
collusion; it was Zionist collusion with a Russian twist...
Oh yeah! Forgot to mention the latest. Trump is asking Kim to provide a list of his nuclear scientists! Before Kim acts on this
request, he should call up the Iranian government for advise 'cause they have lots of experience and can warn Kim of what will
happen to each of those scientists. They'll be put on a kill-list and will be extrajudicially wacked as in executed. Can you believe
the chutzpah? Trump must think Kim is really stupid to fall for that one!
Aye! The thought of six more years of Zionist pandering Trump. Barf-inducing prospect is too tame.
The view from the hermitage is, we are in the age of distractions. Russiagate will be replaced with one of a litany of distractions,
purely designed to keep us off target. The target being, corruption, vote rigging, illegal wars, war crimes, overthrowing sovereign
governments, and political assasinations, both at home and abroad. Those so distracted, will focus on sillyness; not the genuine
danger afoot around the planet. Get used to it; it's become the new normal.
@76Hw
I have yet to read anything more delusional, nay, utterly preposterous. Methinks you over-project too much. Even Trump would have
a belly-ache laugh reading that sheeple spiel. You're the type that sees the giant billboard of Zionist Trump and Yahoo shaking
hands and drones on and on that our lying eyes deceive us and it's really Trump playing 4-D chess. I suppose when he tried to
pressure Omar Ilhan into resigning her seat in Congress yesterday, that too was reverse psychology?
Trump instagramed the billboard pic, he tweeted it, he probably pasted it on his wall; maybe with your kind of wacky, Trump
infatuation, you should too!
Russiagate is finished because Mueller discovered an embarrassing fact: The collusion was and always will be with Israel. Here's
Trump professing his endless love for Zionism:
Trump Resign
Russiagate was very successful <=pls read, re-read Pft @ 46.. he listed many things. divide and conquer accomplished.
a nation state is defined as an armed rule making structure, designed by those who control a territory, and constructed by the
lawyers, military, and wealthy and run by the persons the designers appoint, for the appointed are called politicians.
Most designs of armed nation states provide the designers with information feedback and the designers use that information
to appoint more obedient politicians and generals to run things, and to improve the design to better serve the designers. The
armed rule making structure is designed to give the designers complete control over those targeted to be the governed. Why so
stupid the governed? ; always they allow themselves to be manipulated like sheep.
When 10 angry folks approach you with two pieces of ropes: one to throw over the tree branch under which your horse will be
supporting you while they tie the noose around your neck and the other shorter piece of rope to tie your hands behind ..your back
you need at that point to make your words count , if five of the people are black and five are white. all you need do is
say how smart the blacks are, and how stupid the whites are, as the two groups fight each other you manage your escape. democrat
vs republican= divide to conquer. gun, no gun = divide to conquer, HRC vs DJT = divide to conquer, abortion, no abortion = divide
to conquer, Trump is a Russian planted in a high level USA position of power = divide to conquer, They were all in on it together,,
Muller was in the white house to keep the media supplied with XXX, to keep the law enforcement agencies in the loop, and to advise
trump so things would not get out of hand ( its called Manipulation and the adherents to the economic system called Zionism
For the record, Zionism is not related to race, religion or intelligence. Zionism is a system of economics that take's no captives,
its adherents must own everything, must destroy and decimate all actual or imaginary competition, for Zionist are the owners and
masters of everything? Zionism is about power, absolute power, monopoly ownership and using governments everywhere to abuse the
governed. Zionism has many adherents, whites, blacks, browns, Christians, Jews, Islamist, Indians, you name it among each class
of person and walk of life can be found persons who subscribe to the idea that they, and only they, should own everything, and
when those of us, that are content to be the governed let them, before the kill and murder us, they usually end up owning everything.
1. why the Joint non nuclear agreement with Iran and the other nuclear power nations, that prevented Iran from developing nuclear
weapons, was trashed? Someone needs to be able to say Iran is developing ..., at the right time.
2. Why Netanyohu made public a video that claimed Iran was developing nuclear stuff in violation of the Iran non nuclear agreement,
and everybody laughed,
3. Why the nuclear non proliferation agreement with Russia, that terminated the costly useless arms race a decade ago, has
been recently terminated, to reestablish the nuclear arms race, no apparent reason was given the implication might be Russia could
be a target, but
4. why it might make sense to give nukes to Saudi Arabia or some other rogue nation, and
5. why no one is allowed to have nuclear weapons except the Zionist owned and controlled nation states.
Statement: Zionism is an economic system that requires the elimination of all competition of whatever kind. It is a winner
get's all, takes no prisoners, targets all who would threaten or be a challenge or a threat; does not matter if the threat is
in in oil and gas, technology or weapons as soon as a possibility exist, the principles of Zionism would require that it be taken
out, decimated, and destroyed and made where never again it could even remotely be a threat to the Empire, that Zionism demands..
Hypothesis: A claim that another is developing nuclear weapon capabilities is sufficient to take that other out?
I am glad that most commenters understand that Russiagate will not go away. But the majority appear to miss the real reason. Russiagate
is not an accusation, it is the state of mind.
At the beginnng of Russiagate, I wrote on Robert Parry's Consirtium News that Russiagate is Idiocracy piggy-backing on
decades and literally billions of dollars of anti-Soviet and anti-Russian propaganda. How hard would it be to brainwash an already
brainwashed population?
The purveyors of Russiagate will re-compose themselves, brush off all reports and continue on. One just cannot get away
from one's nature, even when that nature is pure idiocy. Of course, the most ironic in the affair is that it is the so called
US "intellectuals", academics and other assorted cretins who are the most fervent proponents. If you were wondering how Russia
can make such amazing defensive weapons that US can only deny exist and wet dream of having, there is your answer. It is the state
of mind. The whole of US establishment are legends in their on lunch time and totally delusional about the reality surrounding
them - both Russiagate and MAGA cretins, no report can help the Russiagate nation.
Finally, I am thinking of that crazy and ugly professor bitch from the British Cambridge University who gives her lectures
naked to protest something or other. I am so lucky that I do not have to go to a Western university ever again. What a catastrophic
decline! No Brexit can help the Skripal nation.
Russiagate is finished, but is DJT also among the rubble?
Hardly any money for the border wall and still lingering in the ME?
If Hoarsewhisperer proves to be correct above re: DJT, he will really have to knock our socks off before election 2020. To
do this he will have to unequivocally and unceremoniously withdraw from the MENA and Afghanistan and possibly declare a National
Emergency for more money for the wall.
The problem is, when he does this, he will look impulsively dangerous and this may harm his mystique to the lemmings who need
a president to be more "presidential."
My money is on status quo all the way to 2020 and the rethugz hoping the Dems will eat their own in an orgy of warring identities.
The collusion story may be faltering, but the blame for Russia poisoning the Skripals lives on. The other night on The News Hour,
"Judy" led off the program with this: "It has been almost a year since Kremlin intelligence officers attempted to kill a Russian
defector in the British city of Salisbury by poisoning him with a nerve agent. That attack, and the subsequent death of a British
woman, scared away tourists and shoppers, but authorities and residents are working to get the town's economy back on track. Special
correspondent Malcolm Brabant reports."
Russiagate will not go away unfortunately because it has evolved in the "Russiagate Industry". As mentioned by others,
the Russiagate Industry has been very profitable for many industries and people. Russiagate has generated an entire cottage industry
of companies around censorship and "find us a Russian". Dow Jones should have an index on the Russiagate Industry.
Here is one recent example. You know the measles outbreak in the US Pacific Northwest. Yup, the Russians. How do we know.
A government funded research grant. The study found that 899 tweets caused people to doubt vaccines. Looks like money is
to be had even by academics for the right results.
The use of mathematics to model human reality; one of the more bizarre offshoots
that followed the mathematization of economic thought in the 20th century.
Game theory focuses on strategies used by competing actors to make rational decisions.
What should I do given my opponent may subsequently decide A, B, C, or D? It was pioneered by
John von Neumann, John Nash, and Oskar Morgenstern. The assumption that social life is a game
of logic between conniving actors is foundational to this view of economics. But do we really
behave in such a "me versus you" manner?
Game Theory's rational individualism closely resonates with neoliberal capitalism because
it reconceptualizes everyone as mini corporations who are totally selfish.
Individuals compete rather than share; seek to outsmart the next person rather than
empathize. Proponents of the approach often use the "as if" defense. The model might not
perfectly match reality, but we can approximate how someone behaves in the real world by
assuming they act "as if" they're Nashian plotters.
It's the normative assumptions underlying this "as if" that are problematic that at bottom
we're all greedy and impatient bankers. One could just as well argue that people act "as if"
they're trusting and altruistic socialists, but Game Theory won't have any of that.
"... By Couze Venn, Emeritus Professor of Cultural Theory in the Media & Communications Department at Goldsmiths, University of London, and Associate Research Fellow at Johannesburg University. His recent book is After Capital, Sage, 2018. Originally published at openDemocracy ..."
"... From working conditions to welfare policies, from immigration to the internet – this zero sum game of winners and losers benefits only the far right. ..."
"... Image: Homeless man with commuters walking past, Waterloo Station, London. Credit: Jessica Mulley/Flickr, CC 2.0. ..."
"... As Ha Joon Chang has shown, by the 1990s, financial capitalism had become the dominant power, prioritising the interest of shareholders, and incentivising managers through share ownership and bonuses schemes. ..."
"... Meanwhile, neoliberal political economy gradually became the new orthodoxy, increasing its impact through right wing thinktanks and government advisors and spreading its influence in academia and economic thought. Its initial success in terms of growth and prosperity in the 1990s and turn of the century consolidated its hold over the economy until the crash of 2008. ..."
"... political economy ..."
"... Neoliberalism has promoted a self-centeredness that pushes Adam Smith-style individualism to an extreme, turning selfishness into a virtue, as Ayn Rand has done. It is a closed ontology since it does not admit the other, the stranger, into the circle of those towards whom we have a duty of responsibility and care. It thus completes capitalism as a zero-sum game of winners and 'losers'. Apart from the alt-right in the USA, we find its exemplary advocates amongst leading Brexiteers in the UK, backed by dark money. It is not the social democratic compromise of capitalism with a human face that could support the welfare state. Seen in this context, there is an essential affinity between alt-right, neoliberal political economy and neo- fascisms, punctuated by aggressivity, intolerance, exclusion, expulsion and generalised hostility. ..."
Neoliberalism puts markets above all else. In this paradigm, you are supposed to uproot
yourself if work dries up where you live or if there are better opportunities elsewhere. The
needs of your family or extended family are treated as secondary. And your community?
Fuggedaboudit. And this attitude has also led to what is arguably the most corrosive practice,
of companies treating employees like tissue paper, to be trashed after use.
Companies have increasingly adopted a transactional posture towards customers. This shift
happened on Wall Street as a result of deregulation in the 1980s (Rule 415; if anyone cares,
I'll elaborate in comments). The reduced orientation towards treating customers well as a sound
business practice, and merely going through the form is particularly pronounced at the retail
level. I can't tell you how many times I have had to go through ridiculous hoops merely to get
a vendor to live up to its agreement, and even though I am plenty tenacious, I don't always
prevail. It didn't used to be anywhere near this bad. And this is corrosive. Not only are
customers effectively treated as if they can be abused, the people in the support ops wind up
being on the receiving end of well deserved anger even though they aren't the proper target.
The phone reps are almost certainly not told that they are perpetrating an abuse (which then
leads to the question of who in the organization has set up the scripts and training with lies
in them) but for certain types of repeat cases, they have to know their employer is up to no
good. I am sure this is the case at Cigna, where at least twice a year, I have a problem with a
claim, the service rep says it should have been paid and puts it in to be reprocessed and I
typically have to rinse and repeat and get stroopy about it, meaning the later reps can see the
pattern of deliberate non-payment of a valid claim and continue to act as if they can do
something about it.
By Couze Venn, Emeritus Professor of Cultural Theory in the Media & Communications
Department at Goldsmiths, University of London, and Associate Research Fellow at Johannesburg
University. His recent book is After Capital, Sage, 2018. Originally published at openDemocracy
From working conditions to welfare policies, from immigration to the internet –
this zero sum game of winners and losers benefits only the far right.
Image: Homeless man with commuters walking past, Waterloo Station, London. Credit:
Jessica Mulley/Flickr, CC 2.0.
The hostile environment is not just about the Windrush generation in the UK, or the
harassment of migrants at the Mexican border in the USA, or the unwelcoming treatment of
refugees trying to reach Europe. It has become ubiquitous and widespread. We encounter it in
many aspects of daily life. In worsening conditions at work such as zero-hour 'contracts'. In
obstacles to accessing social and health services due to cutbacks, making people's lives more
precarious. Online threats and trolling are other signs of this normalisation of hostility.
The normalisation of hostile environments signals a worrying and global shift in values of
tolerance, empathy, compassion, hospitality and responsibility for the vulnerable. It's a
normalisation that was criticised recently in the UK by UN Poverty Rapporteur Philip Alston,
who described how "punitive, mean-spirited, often callous" government welfare policies were
contributing to an "
increasingly hostile and unwelcoming society ".
There's a pattern to hostile environments that harks back to the 1930s and 40s. As we know,
at the time, those targeted were considered as the enemy within, to be subject to expulsion,
exclusion and indeed, genocide, as happened to Jews and other so-called 'inferior races'. In
more recent time, the iterations of this discourse of the alien other who must be expelled or
eliminated to save the 'pure' or 'good race' or ethnicity and reconstitute the broken community
have found traction in Europe, the USA, Rwanda, India, parts of the Middle East. In its wake,
refugees have become asylum seekers, migrants are labelled illegal or criminal, cultural
differences become alien cultures, non-binary women and men are misgendered, and at the
extreme, those targeted for violence become vermin. It marks a shift in political culture that
inscribes elements of fascism.
Why has this atmosphere of hostility become the default position in politics? What have been
the triggers and what are the stakes in this great moving rightwards shift? One may be tempted
to identify the change in mood and attitudes with recent events like the election of Trump in
the USA. But the far right has been on the rise in Europe, the UK and the US for some years, as
seen in movements like the Tea Party, UKIP, or the National Front in France . They
have been given a boost by the flood of refugees generated by wars in the Middle East,
Afghanistan, parts of Africa, as well as by the spread of fundamentalist religious creeds that
have an affinity with forms of fascism.
Why? Two related sets of developments that from the 1970s have gradually altered the
political terrain. Economically, globalisation emerged as an integral part of a transnational
corporate strategy aimed at securing advantageous conditions for the consolidation of global
capital at a time of risky structural changes in the global economy. And politically,
neoliberalism took hold when the crises of the 1970s started to undermine the postwar consensus
in the Keynesian mixed economy and the role of the welfare state.
Globalisation saw the systematic deployment of outsourcing production in countries offering
cheap labour, minimised corporate tax burdens and other incentives for transnational
corporations, and the invention of the trade in derivatives (financial mechanisms intended to
leverage the value of assets and repackaged debts). They contributed to the 2008 crash. The
general public were made to bail out the banks through increased taxation and the establishment
of policies across social services that produce hostile environments for claimants seeking
state support.
As Ha Joon Chang has shown, by the 1990s, financial capitalism had become the dominant
power, prioritising the interest of shareholders, and incentivising managers through share
ownership and bonuses schemes. The disruptions due to this recomposition of capital have
been a global squeeze on income, the creation of a new precariat, and the debt society. People
who feel insecure, abandoned to forces outside their control become easy prey to demagogues and
prophets of deceit who promise the return of good times, provided enemies and outsiders who
wreck things are expelled.
Meanwhile, neoliberal political economy gradually became the new orthodoxy, increasing
its impact through right wing thinktanks and government advisors and spreading its influence in
academia and economic thought. Its initial success in terms of growth and prosperity in the
1990s and turn of the century consolidated its hold over the economy until the crash of
2008.
What is important here is the radical shift in values and attitudes that recall utilitarian
values in the 19th Century. In particular, it is reflected in the neoliberal hostility towards
the poor, the weak, the destitute, the ' losers', expressed in its denial or abnegation of
responsibility for their plight or welfare, and its project of dismantling the welfare or
providential state.
This pervasive atmosphere of hostility is the real triumph of neoliberal political
economy . Not the economy – privatisation, monetisation, deregulation,
generalised competition, and structural adjustments are immanent tendencies in globalised
capitalism anyway. But neoliberal political economy reanimates attitudes and values that
legitimate the consolidation of power over others, evidenced for example in the creation of an
indebted population who must play by the dominant rules of the game in order to survive. It
promotes new servitudes, operating on a planetary scale. What is rejected are ideas of common
interest and a common humanity that support the principle of collective responsibility for
fellow humans, and that radical liberal philosophers like John Stuart Mill defended. They were
the values, along with the principles of fundamental human rights, that informed major reforms,
and inspired socialism. The establishment of the welfare or providential state, and programmes
of redistribution, enshrined in Beveridge or New Deals, draw from these same principles and
values.
Neoliberalism has promoted a self-centeredness that pushes Adam Smith-style
individualism to an extreme, turning selfishness into a virtue, as Ayn Rand has done. It is a
closed ontology since it does not admit the other, the stranger, into the circle of those
towards whom we have a duty of responsibility and care. It thus completes capitalism as a
zero-sum game of winners and 'losers'. Apart from the alt-right in the USA, we find its
exemplary advocates amongst leading Brexiteers in the UK, backed by dark money. It is not the
social democratic compromise of capitalism with a human face that could support the welfare
state. Seen in this context, there is an essential affinity between alt-right, neoliberal
political economy and neo- fascisms, punctuated by aggressivity, intolerance, exclusion,
expulsion and generalised hostility.
There are other important stakes at this point in the history of humanity and the planet. We
tend to forget that support for fundamental human rights, like equality, liberty, freedom from
oppressive power, has long been motivated by the same kind of concern to defend the vulnerable,
the poor, the destitute, the oppressed from the injustices arising from unequal relations of
power. We forget too that these rights have been hard won through generations of emancipatory
struggles against many forms of oppressions.
Yet, it is sad to see many institutions and organisations tolerate intolerance out of
confusion about the principles at stake and for fear of provoking hostile reactions from those
who claim rights that in effect disadvantage some already vulnerable groups. Failure to defend
the oppressed anywhere and assert our common humanity is the slippery slope towards a Hobbesian
state and great suffering for the many.
For decades we have heard about the loss of industrial production throughout what is called the "Rust Belt". It's presented,
even as recent as the prior presidential election as a relative regional problem that only began post-Reagan.
With all due respect, it looks like you forgot that at some point quantity turns into quality, so making simple extrapolations
might well result in an oversimplification of the current situation.
You essentially ignore the current reality of rising popular anger, and the fact of breaking of the social contract by neoliberal
(and first of all financial) oligarchy, which is as detached from "deplorable" as French aristocracy ("let them eat cakes" mentality.)
While less dangerous for the oligarchy then when the USSR used to exist, the level of social anger comes into play as never
before. In 2016 became a material factor that decided the elections. I do not see that 2020 will be different.
The most detrimental effects from outsourcing and offshoring will come to the forefront probably in 10 years or so when the
oil price might be well over $100 per barrel. But even now this huge social experiment on live people in redistribution of wealth
up turn out to be detrimental for the unity of the country (and not only to the unity).
The current squabble between globalist, Clinton wing of Democratic Party allied with the corporatists with the Republican Party
(with supporting intelligence agencies) and rag-tag forces of the opposition is a good indication of the power of this resentment.
Spearheaded by intelligence agencies (with material support from British government ) attack on Trump (aka Russiagate) is the
attack on the idea of an alternative for neoliberal globalization, not so much on the personality or real or perceived Trump actions;
the brutal, Soviet-style attack on the deviation from neoliberal status quo directed on the political elimination of the opposition
by elimination of Trump from the political scene. Much like Show Trials were in the USSR (in this case people were charged to
be British spies ;-)
There are two countries now co-existing within the USA borders. Which often speak different languages. One is the country of
professionals, managers, and capital owners (let's say top 10%). The other is the country of common people (aka "deplorable",
or those who are below median wage -- ~$30K in 2017; ratio of average and median wage is now around 65% ).
With the large part of the latter living as if they live in a third world country. That's definitely true for McDonald, Wall-mart
(and all retail) employees (say, all less than $15 per hour employees, or around half of US workers).
I think the level of anger of "deplorable" will play the major role in 2020 elections and might propel Warren candidacy. That's
why now some MSM are trying to derail her by exploiting the fact that she listed her heritage incorrectly on several applications.
But when the anger of "deplorable" is in play, then, as Donald Trump aptly quipped, one could stand in the middle of Fifth
Avenue, shoot somebody and do not lose any voters. I think this is now true for Warren too.
-- The United States has lost approximately 42,400 factories since 2001
-- The United States has lost a total of about 5.5 million manufacturing jobs since October 2000
-- From 1999 to 2008, employment at the foreign affiliates of US parent companies increased an astounding 30 percent to 10.1 million
-- In 1959, manufacturing represented 28 percent of U.S. economic output. In 2008, it represented 11.5 percent
-- As of the end of 2009, less than 12 million Americans worked in manufacturing. The last time less than 12 million Americans
were employed in manufacturing was in 1941. The United States has lost a whopping 32 percent of its manufacturing jobs since the
year 2000
-- As of 2010 consumption accounts for 70 percent of GDP. Of this 70 percent, over half is spent on services
-- In 2001, the United States ranked fourth in the world in per capita broadband Internet use. Today it ranks 15th
-- Asia produces 84% of printed circuit boards used worldwide.
-- In September 2011, the Census Bureau said 46.2 million Americans are now living in poverty, which is the highest number of
poor Americans in the 52 years that records have been kept
Amazon boss Jeff Bezos exposing himself, and exposes the National Inquirer for attempted
blackmail. A young senator, Alexandria Ocasio-Cortez, snaring the headlines and proposing a
preposterous New Green Deal – while further splitting the Democrats. Europe plunging back
into recession. The UK no closer to a Brexit Deal (hang-on, that's not a headline that's just
normal..) Deutsche Bank paying up to demonstrate it can borrow in markets. Santander facing a
Euro 50 bln breach of promise lawsuit from Andreas Orcel (proving the Spanish banking adage: At
Santander – you are either a Botin or a.. servant..) So much out there
Are all these things linked? Yes – the world we live in determines the functionality
of global markets. You might believe Washington Post owner Jeff Bezos was the victim of an
Inquirer effort to "catch and kill" a story the paper has on Mr Trump's activities in Moscow,
or you might believe Deutsche Bank's problems are part of a deeper malaise across European
banking. Whatever the news changes our perceptions.
... ... ...
It's a difficult one: the current iteration of capitalism has spawned increased Global
Poverty, Income Inequality, Urban Deprivation, Squalor and Filth. Yet, somehow, such iniquity
isn't actually bad for markets? Should I therefore hurrah the continuation of low rates as good
for markets and ignore the bad for people thing? What's to worry about when share-buybacks push
up stock prices, and the Fed is keeping rates artificially low to i) placate the president, and
ii) counter the president's trade policies.
Long term – even my most hardened sink or sink free-market capitalist critics admit we
face a disruptive inequality crisis. We can address it sooner or later. The imbalances are
growing and the rules of mean reversion apply as much to society and politics as they do to
markets ! Long-term markets would probably function better if everyone is positively motivated.
Adam Smith, the father of modern capitalism and economics got it. So do most people – but
the sad reality is Change is Difficult – especially when the market leads opinion!
I've been thinking about the "hows" of making the world a better place all weekend, but I
don't know enough 'ologys or medicine to cure drug abuse, chronic greed, urban mental illness,
virtue-signaling philanthropy, or how to reform out education systems and society to improve
everyone's opportunities.
What I do suspect is markets are building up great long-term underlying weaknesses, but in
the short-terms low interest rates for longer is a distortion, but positive for financial asset
prices That can't be a good thing?
Shallow people and trolls are fond of saying, of capitalism, "this is not capitalism." In
1964 Professor Quigley (Tragedy And Hope) identified 5 stages of capitalism, and we have come
a long way since then, for the worse. But, like the current communist Chinese, it is all
capitalism, stock markets, banks and all. I believe Marx was right when he said communism and
capitalism are the same thing, at a different stage. We need some kind of free market. But as
to this capitalism thing, it is still a new phenomenon in history, and it is not working.
for all you keyboard commando defenders of Adam Smith one thing you fail to comprehend is
that life is about more than what you can just buy and sell, that is the point. Failing to
recognize this fact will only hasten your demise. On top of that, if 'true capitalism' is not
what we have now you say, which is a valid point, then how did we get here? That is how it
started out and now look where it ended up. It was flawed from the start because of the power
of greed in order to purchase influence and infiltrate your 'pure system'.
Where's Capitalism? This country is more fascist than Italy during Mussolini. So again.
This itineration ? This what, version? There aren't flavors to freedom , fknut.
There's something amiss in our money system and it's killing us. Why, in a system of
Fractional Reserve Banking, do the banks no longer need or want savers to deposit savings
with them? What happened?
For decades the various commercial banks courted depositors like eager suiters. They
offered competing interest rates on savings accounts, promoted their 5 and 10 year CDs, even
offered free toasters for opening a new savings account. Something fundamental changed with
the repeal of Glass-Steagal in November, 1999. Banks now promote their "services" - which
cost money - and their loans. Mortgage loans, HELOCs, car loans, student loans, credit cards,
all manner of loans. We're inundated with offers from banks to loan us money.
Prior to the repeal of Glass-Steagal the saying was, "The only way to get a loan is to
prove you don't need one."
Long term speaking, global 'capitalism' is really an alliance between global bankers and
one strong country at a time, to use that country's government to blow a national money and
asset bubble. ('Imperial' is probably better than 'national.')
First it was the Dutch Empire, then it was the British, and then it was America. When one
top country's strength is spent by debt, corruption and easy living, the bankers move on to
the next one.
Things look bad today because we're near the end of one global empire but the next one
(India) is still some way off. The elites have to do whatever ad hoc trickery to keep the
current charade going, absent real strength and growth from a new national bubble.
Until neoliberal elite stops its brutal squeeze of workers, expect collapsing of the social contract. The country was already
in a pre-revolutionary state in 2016 with the net result of election of Trump over Clinton (and, given a chance, people would
have chosen Sanders over Trump).
The color revolution against Trump, which is underway, is, as s side effect, undermining of influence of neoliberal MSM (aka
"fake news" ) and social unity of the nation. When the President calls WaPo "Bezos blog" that's delegitimization (and naked Bezos
photos does not help either) When FBI is compared to STASI and Mueller investigation is called a witch hunt that points on the
deeply divided country with the fractured neoliberal elite experiencing the crisis of legitimacy.
But the basic problem is that it costs a lot of money to cultivate a segment of the market now as it involves creation of a
group of new consumers. And the more sophisticated the segment is, the more expensive it is. If workers are squashed (good jobs
are displaced by McJob and/or permatemps) you face stagnation as top 10% can't replace bottom 80% as consumers.
That's probably why the US economy can't escape secular stagnation and reported growth is within the error margin of measurements
and heavily depends on the inflation metric and "expansive" treatment of GDP (gambling, financial industries, military expenses,
etc)
Paul Krugman said the US economy may be heading into a recession On the positive side that might end Trump run and give Warren
a chance. On the negative it will amplify the current inequality problems and might provoke social unrest.
Bert Schlitz , February 11, 2019 3:13 pm
Sorry, Lilbez, Trump didn't win anything and was a neoliberal invention which coincides with evangelical voters. Why you keep
on missing that point? Don't you want to admit that?
Another little fact, Sprague's growth peaked in 1959. It actually was bleeding jobs by the late 60's which triggered the real
strikes. Maybe, just maybe that growth was a illusion of the war driven destruction.
spencer , February 11, 2019 4:20 pm
Bert -- the first death of manufacturing was the New England textile and shoe industries in the 1920's–1940s. Those industries
finally became too small to have a significant negative impact in New England in the 1960s and 1970s. Boston and other New England
areas started rebounding in the 1960s, largely on the back of aerospace and other technology intensive industries. But the 1970
recession was lead by the fall in those industries. So the Massachusetts Miracle appeared to start with the recovery from the
1970 recession. What made Mass different. One by the 1960s shoes and textiles has become so small that they were no longer a significant
drag on the economy. Second, Massachusetts continued its very large investment in education, and it was not only MIT, but throughout
the public secondary and college level schools. So it had the educated population to move into the very early stages of the emerging
information technology industries that later came to be known as the Massachusetts Miracle. So Mass went through the death of
its key manufacturing industries earlier than other regions, but continued to invest heavily in education, something I'm afraid
I do not see in the Midwest. Moreover, in the Midwest the traditional industries are still large enough that weakness in them
still has a significant negative impact on GDP. Moreover, the growth we do see in autos and other Midwestern industries is occurring
in the South and does not help the Midwest much -- Alabama is now the second most important manufacturer of cars and light trucks.
There is a certain validity to your analysis, but it is off by enough to be misleading.
Kaleberg , February 11, 2019 7:53 pm
Spencer is right about manufacturing vanishing over a much longer time frame. Manufacturing jobs have been vanishing since
the early 20th century. A lot of this is increased efficiency. It used to take over 100 work-hours to build a car. Now it's down
to 20 and still falling. New England industrialized early, and by the 1970s the dead/dying shoe industry was a major item in the
presidential debates. In 'Still the Iron Age', Smil points out that the steel industry has probably gained an order of magnitude
in efficiency over the last 30 years, but this kind of thing never gets press coverage. Basic oxygen furnaces and direct reduction
or iron don't make good news stories.
The places that have recovered first emphasized education and having a broad portfolio. Who would have imagined how important
furniture design and manufacturing would be to Los Angeles recovery from the aerospace collapse after the Cold War? The big difference
with our "Rust Belt" is the overall massive level of denial combined with vicious racism and antisemitism: "If we could just kill
enough blacks and Jews, they'll start making washing machines here again."
While U.S. politicians from both parties have given standing ovations for the
U.S. oil and gas industry , investors appear to be losing their enthusiasm. The so-called
shale revolution, the fracking miracle, may have resulted in record oil and gas production in
North America, but the real miracle -- in which shale companies make money fracking that oil
and gas -- has yet to occur.
Amazon boss Jeff Bezos exposing himself, and exposes the National Inquirer for attempted
blackmail. A young senator, Alexandria Ocasio-Cortez, snaring the headlines and proposing a
preposterous New Green Deal – while further splitting the Democrats. Europe plunging back
into recession. The UK no closer to a Brexit Deal (hang-on, that's not a headline that's just
normal..) Deutsche Bank paying up to demonstrate it can borrow in markets. Santander facing a
Euro 50 bln breach of promise lawsuit from Andreas Orcel (proving the Spanish banking adage: At
Santander – you are either a Botin or a.. servant..) So much out there
Are all these things linked? Yes – the world we live in determines the functionality
of global markets. You might believe Washington Post owner Jeff Bezos was the victim of an
Inquirer effort to "catch and kill" a story the paper has on Mr Trump's activities in Moscow,
or you might believe Deutsche Bank's problems are part of a deeper malaise across European
banking. Whatever the news changes our perceptions.
The trick is too separate the chaos of new flow from the tau of markets . Markets are linear
functions of buy/sell – they are not necessarily about common sense. To illustrate: last
week I wrote about Italy, pointing out just how hopelessly its ensnared and entrapped within
the straight-jacket of the Euro, with little prospect of growth, employment or upside.
Yet Italian bonds are one of the top performing assets – AND WILL REMAIN SO –
because the ECB can't afford to let Italy go, and Europe sliding back into downturn pretty much
ensures they'll continue to bailout Italy and likely resurrect QE in some form – watch
out for something like long-term repos. An article in one weekend paper says the EU is now
turning a blind eye to European governments spending their way out of austerity driven
recession.
Therefore, smart investors might agree with my analysis of Italy as unsustainable, yet keep
buying Italy, and will keep on buying right up to the moment the arbitrage cracks. (According
the theory of flight bumble-bees can't fly – but they do.) That's why the smart hedge
fund bosses are watching the succession for Draghi's job at the ECB so carefully, and weighting
populism in Germany so carefully – as it requires a complicit German electorate to keep
the Euro illusion going. I suspect they care considerably less about the current spat betwixt
France and Italy – entertaining as it is.
On a purely common sense Macro perspective, you should probably ignore Europe completely.
Who cares about counties with sub 1% growth, demographic time-bombs ticking away, and a
hopeless mish-mash of unpredictable populist politics coming to the fore? Go invest in the fast
growing economies of Africa and Asia instead.. Yet, it still makes sense to arb the European
game.
Such things are just facets of the six-impossible things before breakfast approach to
investment.
Using the same logic, you might see US stock and bond markets as a screaming buy!
US growth remains robust – despite the FED clearly indicating its dialing back rate
hikes. Essentially rates will remain flat. Is that a problem? From the market's perspective
– get out the party hats! There is no long term inflation threat because there is zero
wage pressure. Despite "full employment" US companies pay as little as they can. Wages aren't
rising.
Low rates will fuel yet more share buy-backs for Bernie Sanders to fulminate against. Share
buybacks are great for the market and excellent for senior executives and owners of businesses
– converting equity into massively underpriced debt and handing more capital back to
them. More highly levered companies don't actually build anything more, or create new jobs but
the rich get richer – and, heck, isn't that what capitalism is all about? In the
short-run .
Last week I commented in the Morning Porridge about Squalor and Creeping Poverty in San
Francisco. It was an eye-opener. It got about a quarter
of a million views on Zerohedge , I got trolled and called a communist /socialist
/democratic no-nothing stooge. (On the plus side, I got over 300 comments from porridge
readers, and only one was nasty. The rest ranged from supportive to constructively
critical.)
It's a difficult one: the current iteration of capitalism has spawned increased Global
Poverty, Income Inequality, Urban Deprivation, Squalor and Filth. Yet, somehow, such iniquity
isn't actually bad for markets? Should I therefore hurrah the continuation of low rates as good
for markets and ignore the bad for people thing? What's to worry about when share-buybacks push
up stock prices, and the Fed is keeping rates artificially low to i) placate the president, and
ii) counter the president's trade policies.
Long term – even my most hardened sink or sink free-market capitalist critics admit we
face a disruptive inequality crisis. We can address it sooner or later. The imbalances are
growing and the rules of mean reversion apply as much to society and politics as they do to
markets ! Long-term markets would probably function better if everyone is positively motivated.
Adam Smith, the father of modern capitalism and economics got it. So do most people – but
the sad reality is Change is Difficult – especially when the market leads opinion!
I've been thinking about the "hows" of making the world a better place all weekend, but I
don't know enough 'ologys or medicine to cure drug abuse, chronic greed, urban mental illness,
virtue-signaling philanthropy, or how to reform out education systems and society to improve
everyone's opportunities.
What I do suspect is markets are building up great long-term underlying weaknesses, but in
the short-terms low interest rates for longer is a distortion, but positive for financial asset
prices That can't be a good thing?
"... The ruling class has successfully ruled out any concept of consent. Keep bringing consent up and their philosophies will be shown to be the same as gang rapists. ..."
"... They call themselves liberals, but they are intent upon abolishing liberty. ..."
"... They promise the blessings of the Garden of Eden ..."
'Liber' in Latin means:
1) free (man)
2) free from tribute
3) independent, outspoken/frank
4) unimpeded
5) void of
The author needs to recheck his definitions. Voluntary exchange, consent, free markets,
free will, etc are just some of the concepts at the heart of the true libertarian thought.
The ruling class has successfully ruled out any concept of consent. Keep bringing consent
up and their philosophies will be shown to be the same as gang rapists.
"The champions of socialism call themselves progressives, but they recommend a system
which is characterized by rigid observance of routine and by a resistance to every kind of
improvement. They call themselves liberals, but they are intent upon abolishing liberty. They
call themselves democrats, but they yearn for dictatorship. They call themselves
revolutionaries, but they want to make the government omnipotent. They promise the blessings
of the Garden of Eden, but they plan to transform the world into a gigantic post office.
Every man but one a subordinate clerk in a bureau. What an alluring utopia! What a noble
cause to fight!" – Ludwig Von Mises
No country or region of the world has ever broke out of the chains of
poverty through the magic of the market. And no country has developed because of the
benevolence of foreign capital. None. The consistent historical record has entailed growth and
development anchored in highly nationalist economic agendas with heavy involvement of public
institutions.
In fact, for much of medieval and early modern Europe, with England leading the way, national
economies were built around mercantilism. This was a system that directly employed state power
for national economic accumulation. Merchants and rulers drunk from the same teacup.
This system of mercantilism is in fact still alive today: For example, American military power
is intricately tied to business interests for national accumulation and when American
politicians talk about 'our national interest,' they primarily mean economic.
With a terribly disappointing record of modest growth, at best, without transformation, the
neoliberal creed has come under increasing doubt from the front-runner converts of the 1980s,
including our own NRM regime in Uganda. There has been a striking turnaround in rhetoric though
not practice.
It is instructive to hear the Ugandan ruler belatedly lamenting the dubious practices of
multinational telecom companies that evade taxes and repatriate all their profits: That is
precisely what we signed up for. Sorry Mr President. With rapidly growing and
disproportionately young populations, African countries are increasingly seen as the main
frontier for product innovation and experimentation. So, China's aggressive penetration of the
continent, seductively using infrastructural projects, has to be viewed in that light –
to capture markets and raw materials for the long-term.
The raw end to Africa's place in the global economy, and for which African governments show
little concern, is the one-way traffic of an unlimited open policy in Africa, but not for
African products out of Africa, not in China or India and not in the West.
Part of the problem, we are often told, is not having competitive products for the so-called
global markets, but how on earth is this ever going to happen when local producers are overrun
on the home turf by cheap Chines goods? Much the same way we hunger for foreign investors,
there is a rather misleading obsession with exporting to foreign markets. But the immediate,
domestic market provides the necessary testing ground for breaking into the distant
consumer.
African governments, more so the one of Mr Museveni, will do well to fully concede to the
neoliberal mirage. Markets can theoretically do many things, but they have never on their own,
delivered robust and sustained growth or brought about economic transformation. There is now
wide consensus in academic circles that fiscal coercion, to direct credit and investment to
certain critical sectors of a poor economy, is crucial to propel and sustain high growth.
For Uganda, the greatest obstacle to a radical rethink and turnaround of national economic
policy is the powerful cabal, comprising local comprador class and foreign speculators, who
have profiteered enormously from the laissez faire system, including commandeering public
property and using state power for economic predation.
In that regard, the struggle for political change is also, in fact, most importantly in
concrete terms, a struggle for economic revolution, to embark on a wholly different approach to
a long-term national economic strategy.
Without an internally coherent and clearly articulated long-term plan for economic
transformation, away from the orthodoxy of the IMF and the World, Uganda will remain trapped in
poverty 50 years down the road. Dr Khisa is assistant professor at North Carolina State
University (USA). [email protected]
"... The hope that the crisis would give rise to a more progressive capitalism, however, proved to be premature. From the competing visions of recovery, the ascendance of austerity as both a political and an economic project paved the way for the construction of a new economically-elite-driven, capital-centric, shrunken welfare state model founded on a non-ideological, pragmatic, economic 'truth'. ..."
"... Contemporary welfare states now exist within a world in which austerity as a broad set of ideas, encompasses the liberal (in a Hayekian sense) desire to shrink the (social welfare) state, deregulate labour and promote private markets as the driver of growth. ..."
"... Nationalism, protectionism, and trade wars are widely reported and international organisations are taking a more obvious interest in inequality . More solid emerging evidence of a possible paradigmatic shift came most recently from none other than the IMF , perhaps the ..."
"... The post-crisis welfare terrain can be characterised as one of 'neo-austerity' – an emboldened set of claims for the residualisation of state welfare combined with spending to safeguard the power of economic elites. ..."
"... Neo-austerity implies not less, but more reliance on the state to enforce, support and compensate for social, political and economic losses. But while a range of discretionary social provisions and services, from public spaces to social care, are erased from the social citizenship balance sheet, demand is increased for state support for private business and pressures for 'social' investment . ..."
"... The rise of the nationalist Right is, in many ways a response to this counter-narrative. It has sought to capitalise on the discontent by promising a cure for the symptoms of austerity. But of course, nationalist politics do little or nothing to change the medicine! ..."
IMF speeches do little to confirm hopes that the crisis would give rise to a more
progressive capitalism, write Kevin Farnsworth and Zoë Irving .
It is now over ten years since the collapse of Lehman Brothers paved the way for the
biggest, most global, and most significant financial crisis in living memory. It brought the
global capitalist economy to its knees, it shook belief and faith in the capitalist system
itself, and raised serious doubts about neoliberalism.
The hope that the crisis would give rise to a more progressive capitalism, however, proved
to be premature. From the competing visions of recovery, the ascendance of austerity as both a
political and an economic project paved the way for the construction of a new
economically-elite-driven, capital-centric, shrunken welfare state model founded on a
non-ideological, pragmatic, economic 'truth'.
Contemporary welfare states now exist within a world in which austerity as a broad
set of ideas, encompasses the liberal (in a Hayekian sense) desire to shrink the (social
welfare) state, deregulate labour and promote private markets as the driver of growth. This has
forced a reconfiguration of the fortunes of the wealthy, the interests of capital, the position
of middle-income and poorer citizens, and the state itself. And the biggest losers have been
the poorest citizens. Nor is this new politics driven simply by economic austerity. An austere
politics has sapped the political imagination and robbed people of hope that things might, one
day, get better. At every level austerity restricts the terms of debate.
Whilst the Left rail against the cruelty of austerity, for many on the Right the crisis and
the ascendance of austerity politics represents a 'dream come true'. Or does it? Whilst the
critical voices are often quiet, there remains a powerful counter-narrative which suggests that
in exposing the limitations of neoliberalism, the global crisis and subsequent austerity
created a backlash against globalisation and brought the wider costs of unfettered capitalism
into public focus.
Nationalism, protectionism, and trade wars are widely reported and
international
organisations are taking a more obvious interest in
inequality . More solid emerging evidence of a possible
paradigmatic shift came most recently from none other than the IMF , perhaps
the archetypal and unapologetic neoliberal institution ,
and one with the power to shape and frame the relationship between economies and welfare
states.
For welfare state progressives, the possibility that austerity's social harms are gaining
purchase in international and public discourse is heartening. However, as our research shows,
there is little to feel optimistic about as far as the expansion of social policy is concerned.
The post-crisis welfare terrain can be characterised as one of 'neo-austerity' – an
emboldened set of claims for the residualisation of state welfare combined with spending to
safeguard the power of economic elites.
Neo-austerity implies not less, but more reliance on the state to enforce, support and
compensate for social, political and economic losses. But while a range of discretionary social
provisions and services, from public spaces to social care, are erased from the social
citizenship balance sheet, demand is
increased for state support for private business and
pressures for 'social' investment . This is the key policy problematic that governments and
international organisations are currently grappling with – this rather than the morality
of inequality is the major contradiction within neoliberalism.
The rise of the nationalist
Right is, in many ways a response to this counter-narrative. It has sought to capitalise on the
discontent by promising a cure for the symptoms of austerity. But of course, nationalist
politics do little or nothing to change the medicine!
The public statements of the IMF are an important discursive window through which to examine
the strength of austerity in maintaining neoliberalism. Rather than coding the content of
speeches ourselves, our approach let maths categorise the data. Our research utilised
quantitative textual analysis (exploiting the capabilities of WordStat) to examine all public
speeches by senior IMF representatives between 2004 and 2015.
The contradictions are clear but there is little to indicate that conviction in the economic
fundamentals are on the wane. The IMF has at times appeared 'off-message' in its advice during
the period of the Great Recession, but economic growth through private market development has
remained its key priority. Unlike national governments, the IMF is an organisation playing the long and global game
... ... ...
Kevin Farnsworth – University of York -- is reader in international and comparative social policy at the University of York.
His research interests include the political economy of welfare, welfare states and economic crisis and corporate welfare. He is
author of Corporate Welfare versus social welfare (2012) and founder of corporate-welfare-watch. With Zoë Irving he is co-editor
of the Journal of International and Comparative Social Policy. He tweets at @Dr_K_Farnsworth
Zoë Irving – University of York -- is senior lecturer in international and comparative social policy at the University
of York. Her research interests include the international social politics of economic crisis and austerity with a special
interest in Iceland. With Kevin Farnsworth she co-edited Social Policy in Challenging Times (2011) and Social Policy in Times of
Austerity (2015)
"... The opposite of a neoliberal economic agenda isn't a progressive economic agenda, but democratic re-engagement. Neoliberalism taught us that "there is no alternative" to cutting taxes, cutting services and letting the banks treat us as they see fit. But of course not even the Coalition believes that any more. These days they proudly subsidise their friends and regulate their enemies in order to reshape Australia in their preferred form. ..."
"... While the hypocrisy is staggering, at least voters can now see that politics, and elections, matter. Having been told for decades that it was "global markets" that shaped our society, it's now clear that it is actually the likes of Barnaby Joyce and Tony Abbott who decide whether we get new coal mines or power stations. Luckily, millions of voters now realise that if it's OK to subsidise new coal mines, there's no reason we can't subsidise renewables instead. ..."
"... So, what to nationalise? What new machinery of state should we build first? Should we create a national anti-corruption watchdog, replace the productivity commission with a national interest commission, or abolish the failed network of finance sector regulators and build a new one from scratch? ..."
"... The death of neoliberalism means we can finally have a national debate about the size and role of government, and the shape of the economy and society we want to build. ..."
"... class warfare (by the rich against the 99%, though I should not need to say that) is still very much alive. ..."
"... The rise of nationalism is indeed worrying situation.. but its clear that mass discontent is driving a 'shift' away from the status quo and that opportunists of every creed are all trying to get in on the action.. ..."
"... the elephant in the room that no one wants to discuss is population growth and lack of natural resources and meaningful 'employment' .. which self serving politicians are exploiting via playing the fear card and creating further division in society in order to embrace and increase their own power. Further more, no one, it seems, has any valid answers as regards resolving the division and creating a path forward.. thereby making more conflict an inevitability. ..."
"... Like Octopus, the globalists have every one of their eight legs in a different pot of gold. On their arms, suction cups maintain an iron grip. Trying to pull those suckers out, leaves us raw and bleeding. To release their grip, without hurting ourselves, we must aim for the brain. ..."
"... Murdoch's media empire has arms in every Democracy on earth. As his poisonous ink spread across our lands, we wallowed in the dark. ..."
"... The Oil and Coal Tycoons have arms in every black hole on earth. As their suckers pull black gold from the land beneath our feet, we choke on the air we breathe. ..."
"... The Financial Tyrants have arms in our buildings, factories, farms and homes. Their suckers stripped our pockets bare and we ran out of money. ..."
"... The False Prophets spread their arms into our private lives. Their suckers turned our modest, humble faiths into global empires filled with mega-churches, televangelists, jet-setting preachers and evangelical armies Hell bent on disruption and destruction. ..."
"... Neoliberalism may be dead but the former Trotskyites who invented it are still alive and they still have an agenda. ..."
"... Neo Liberalism was a project cooked up back in the late 1970s by the Capital owning classes & enacted by successive govts of "right" or "left" ever since. They feared the growing power of the working & middle classes which they felt threatened their own power & wealth. So they set out to destroy any ability of the working class to organise & to gut the middle class. ..."
"... Key to this was decoupling wages from productivity & forcing us all into debt peonage. Deregulation of the financial markets & the globalization of capital markets, disastorous multilateral trade deals & off shoring jobs, slashing state social programmes, Union busting laws all part of the plan. All covered with a lie that we live in meritocracies & the "best & brightest" are in charge. The result has been evermore riches funneled to the wealthiest few percent & a wealth gap bigger than that of the gilded age ..."
"... The majority press are so organised around the idea that neoliberalism in the sense captured economically and to some extent socially as construed in the article above; ..."
"... Rumours of neoliberalism's death have been somewhat exaggerated. Its been on life support provided by the LNP since John Howard and there are still a few market fundamentalists lurking in the ranks of the ALP, just waiting for their chance to do New Labor MkII in memory of Paul Keating. ..."
"... Neoliberalism's lasting legacy will not be the ludicrous economic programs, privatizations and deregulation, those can all be rolled back if some party would grow a spine. The real damage was caused by the aping of the US and UK's cult of individual responsibility, the atomizing effects of neoliberal anti-social policy and demonization of collective action including unionism. ..."
The opposite of a neoliberal economic agenda isn't a progressive economic agenda, but
democratic re-engagement. Neoliberalism taught us that "there is no alternative" to cutting
taxes, cutting services and letting the banks treat us as they see fit. But of course not even
the Coalition believes that any more. These days they proudly subsidise their friends and
regulate their enemies in order to reshape Australia in their preferred form.
While the hypocrisy is staggering, at least voters can now see that politics, and elections,
matter. Having been told for decades that it was "global markets" that shaped our society, it's
now clear that it is actually the likes of Barnaby Joyce and Tony Abbott who decide whether we
get new coal mines or power stations. Luckily, millions of voters now realise that if it's OK
to subsidise new coal mines, there's no reason we can't subsidise renewables instead.
Neoliberalism: the idea that swallowed the world Read more
The parliament is filling with people of all political persuasions who, if nothing else,
decry the neoliberal agenda to shrink our government and our national vision. While there's
obviously quite a distance between MPs who want to build the nation, one new coal mine at a
time, and those who want to fill our cities with renewable energy, the whole purpose of
democracy is to settle such disputes at the ballot box.
So, what to nationalise? What new machinery of state should we build first? Should we create
a national anti-corruption watchdog, replace the productivity commission with a national
interest commission, or abolish the failed network of finance sector regulators and build a new
one from scratch?
... ... ...
The death of neoliberalism means we can finally have a national debate about the size and
role of government, and the shape of the economy and society we want to build. But we need to
do more than talk about tax and regulation. Australia is one of the oldest parliamentary
democracies in the world, and we once helped lead the world in the design of democratic
institutions and the creation of an open democratic culture. Let's not allow the legacy of
neoliberalism to be a cynical belief that there is no point repairing and rebuilding the
democratic institutions that ensure not just our economy thrives, but our society as well. A
quick look around the world provides clear evidence that there really are a lot of
alternatives.
Richard Denniss is chief economist for the Australia Institute
Mmmm, well, class warfare (by the rich against the 99%, though I should not need to say that)
is still very much alive.
Globalisation-driven financial deregulation was commenced here by Hawke Labor from 1983 as
a Laberal facade for the Australian chapter of the transnational ruling class policy of
self-enrichment. It was sold to the aspirationals as the ever-popular This Will Make You Rich
- as ever-rising house prices did, for home-owners then (paid for now through housing
unaffordability for their descendants). Then, transnational capital was able to loot both
aspirationals' productivity gains (easily 10% of GDP) plus usurious interest from the
borrowings made by the said aspirationals (easily 6% of GDP) to keep up with the Joneses.
Now, it loots 90% of all increases in GDP, leaving just 10% in crumbs from the filthy rich
man's table for 15 million workers to share.
We don't notice as much as we should, because the mainstream (mainly but not only Murdoch)
media is very good at persuading us - then and now - that there is nothing to see. It is a
tool of that transnational class, its role being to manufacture our consent to our own
exploitation. Thus they play the man because it is politically easier than open demands that
the public be robbed. In the case of penalty rates, thus adopting the obvious hypocrisy of
which "The Australian" accuses Shorten. Or they play the woman, in the case of the ferocious,
relentless media vilification of Julia Gillard and Gillard Labor – five years after the
demonization of Gillard Labor's Great Big New (Carbon) Tax, the need for one is now almost
universally accepted. Or they play the players, hence a focus on Dutton's challenge that
pretends that he has meaningful policies.
Labor's class traitors clearly intended to aggressively apply the standard neoliberal
model – look at how it helps their careers after politics (ask Anna Blight)! Shorten is
not working to promote some progressive agenda, he is doing as little as possible, and
expects to simply be voted into The Lodge as a committed servant of transnational
capitalism.
I stopped voting 40 years ago because the voting system is mathematically rigged to favor
the duopoly. Until a large number of minor parties can share their preferences and beat the
majors, which is now starting to happen. This is not just voting for a good representative,
but voting against the corrupt parties. A minority government should lead to proper debate in
parliament. More women will lead to lower levels of testosterone fuelled sledging and better
communication. A "Coalition of Representative Independents" could form government in the
future, leading by consensus and constantly listening to the community.
The rise of nationalism is indeed worrying situation.. but its clear that mass discontent is
driving a 'shift' away from the status quo and that opportunists of every creed are all
trying to get in on the action..
The big nut to crack is HOW do we collectively find sane and
honest leadership ? A huge part of the problem is the ongoing trend of disdain for government
in favor of embracing private monopolies as the be all and end all for solving the ongoing
societal rift. .. which has created a centralization of wealth and the power that that wealth
yields.. allied to the fact that huge swaths of the population in EVERY nation were hiding
when the brains were allocated.. and hence are very easy to dupe..
the elephant in the room
that no one wants to discuss is population growth and lack of natural resources and
meaningful 'employment' .. which self serving politicians are exploiting via playing the fear
card and creating further division in society in order to embrace and increase their own
power. Further more, no one, it seems, has any valid answers as regards resolving the
division and creating a path forward.. thereby making more conflict an inevitability.
Like Octopus, the globalists have every one of their eight legs in a different pot of gold.
On their arms, suction cups maintain an iron grip. Trying to pull those suckers out, leaves
us raw and bleeding. To release their grip, without hurting ourselves, we must aim for the
brain.
Murdoch's media empire has arms in every Democracy on earth. As his poisonous ink spread
across our lands, we wallowed in the dark.
The Oil and Coal Tycoons have arms in every black hole on earth. As their suckers pull
black gold from the land beneath our feet, we choke on the air we breathe.
The Financial Tyrants have arms in our buildings, factories, farms and homes. Their
suckers stripped our pockets bare and we ran out of money.
The False Prophets spread their arms into our private lives. Their suckers turned our
modest, humble faiths into global empires filled with mega-churches, televangelists,
jet-setting preachers and evangelical armies Hell bent on disruption and destruction.
Denniss offers us the cure! Start thinking fresh and new and starve the globalists to
death. They fed us BS, we ate BS and now we are mal-nourished. We need good, healthy
ideas.
Land. Infrastructure. Time.
Time - "WE" increased productivity and the globalists stole the rewards. Time to increase
our FREE time. 32 hours is the NEW full time. Pay us full time wages, give us full time
benefits, and reduce our work days by 20% and suddenly we have 20% more jobs. As the incomes
of billionaires drop, the money in circulation will increase. We are the job creators - not
globalists.
21st Century Infrastructure is about healthy human beings - not the effing economy. Think
healthcare, education, senior care and child care. If we find out you have sent your money
off-shore, your local taxes will increase by ten. So please, do, send your money off-shore -
our cities and towns would love to increase taxes on your stores, offices and real estate by
ten.
No more caps on taxes. If you are a citizen, you pay social taxes on every dime you get.
In America you will be paying 15.3% of every dollar to social security. That's $153,000.00 a
year for every million dollars you take out of our economy.
Land is not something you put in a museum, lock away in a vault, or wear on your neck.
Think fresh and new. If you own land, you are responsible for meeting community rules.
No more empty, weed filled lots allowed. If you have empty land, you better put in a nice
garden, pretty trees and walkways or we will do it for you and employ "eminent-domain" on
your bank accounts to pay for it.
No more empty buildings. If you own an empty building you will put it to good use, or we
will do it for you - and keep the profits to fund our local governments, schools, hospitals,
and senior/child care centers.
No more slumlords allowed. We have basic standards, for everyone. If we catch you renting
a slum to anyone, we will make repairs for you, and if you do not pay the bill, we will put a
lien on your building and wait until you sell it to pay ourselves back.
We do not trust you big-box types anymore. If you want to build your mega-store in our
cities, towns or communities, you must, first, deposit the entire cost of tearing it down,
and landscaping a park, or playground when you leave. While you stay, we will invest your
deposit in index funds and assure ourselves enough money down the road.
Sorry you BIG guys and gals, but you will find our countries are very expensive places for
you to invest. We put our families, our neighborhoods and our lives first.
However - and it's a big however - there is a very real danger that at the next election
the libs will again win by default due to the fact that many traditional labour voters are
defecting to the greens instead. Sadly, LNP supporters are a lot less likely to vote green.
Our best hope is to wipe the LNP out at the next election by voting labour, and then at the
election after that establishing the greens in opposition. It is unfortunatly unlikely to
happen at the next election....and I just hope that voters in certain seats understand that
by voting for the greens they might be in fact unwittingly handing the reins back to the
least green party of all: the LNP.
Neo Liberalism was a project cooked up back in the late 1970s by the Capital owning classes
& enacted by successive govts of "right" or "left" ever since. They feared the growing
power of the working & middle classes which they felt threatened their own power &
wealth. So they set out to destroy any ability of the working class to organise & to gut
the middle class.
Key to this was decoupling wages from productivity & forcing us all
into debt peonage. Deregulation of the financial markets & the globalization of capital
markets, disastorous multilateral trade deals & off shoring jobs, slashing state social
programmes, Union busting laws all part of the plan. All covered with a lie that we live in
meritocracies & the "best & brightest" are in charge. The result has been evermore
riches funneled to the wealthiest few percent & a wealth gap bigger than that of the
gilded age
The majority press are so organised around the idea that neoliberalism in the sense captured
economically and to some extent socially as construed in the article above; as normal and
natural that nothing can be done. As the system folds we see in its place Brexit, neoconservatism, Trump.
This is not new found freedom or Liberatarianism but a post liberal
world where decency and open mindedness and open nuanced debate take a a back seat to
populism and demagoguery.
The whole purpose of Anglophone liberal democracy has been twofold: 1. to establish and
protect private property rights and 2. TO guarantee some individual liberties. Guess who
benefits from the enshrinement of private property rights as absolute? Big owners, and you
know who they are. ... Individual tights are just not that sacred, summon the latest
bogeyman, and they can be shrunken or tossed.
Neoliberalism, the economic stablemate of big religion's Prosperity Evangelism cult.
https://en.wikipedia.org/wiki/Prosperity_theology
.
Dual streams of bull shit to confuse the citizens while the Country's immense wealth is
stolen.
It seems there's been a turning point recently though in the ideas of neoliberalism, as
pointed out by Denniss that suddenly it's okay for all and sundry to talk about nationalising
industries and infrastructure. It will probably take a couple of decades to turn things
around in practical ways. And there are surely plenty of powerful supporters of the ideas of
neoliberalism still around.
Is neo-liberalism really dead or is it wishful thinking?
If neo-liberalism really is on the decline in Australia, all i can say is bravo to Australia,
use this opportunity to build a stronger government and regain the terrain that was lost
during the TINA (there is no alternative) years.
Here in Canada neo-liberalism is stronger than ever, maybe because of the proximity to the
cancerous tumor at the south, so when i read this article, i did it with a bit of skepticism
but also with a bit of envy and a bit of hope for the future.
Neoliberalism is *not* dead, and it is counter-productive to claim that it is. It is clearly
the driver of what passes for policy by the LNP government. Just as trickle-down economics
remains as the basis of the government's economic actions.
It will look like it's dead when back bone services and infrastructure utilities are returned
to public ownership.
Those things are not fit for market style private ownership for a few big reasons:
They are by their nature natural monopolies (so a market private ownership won't work and
will rapidly creep up prices of reduced service precisely because they not in a natural
market context.
These core services and utilities are mega scale operations beyond a natural market ROI
value.
These core sovereign services and utilities, are nation critical to the national economy
and political stability. The last thing we want to do is hand that sovereign power over to
private control.
Australia is a very fortunate country. It enjoys national sovereignty, unshackled by
crippling bonds to anything like the neoliberal EU. It is thus able to concentrate on solving
its own issues.
Great article. Must say that we do have more than one vote per electorate. They're called
preference votes. Kerryn Phelps get 23% of the primary PLUS a heap of preferences! But a
proportional system would change a whole lot of results
Firstly we are not in America. America is a basket case and has been since, well, forever.
Secondly the so called "housing crisis" is a simple consequence of a growing population.
In the 1950s there were just 8m people in Australia, there 10m in the 1960s and 12m in the
1970s. And, no, neo-liebralism didn't cause the growing population. People having sex and
living longer caused the growing population. It is therefore all the more remarkable that we
have actually built enough houses to house a population which has doubled in size.
Thirdly, in the last 30 years 1 billion people have been lifted out of poverty. When you
talk about huge, unprecedented, un-fucking-believable levels of poverty, super-massive
inequality, dissatisfaction (Really? This is now a measure?), unemployment/sub-employment and
casualization, collapse (collapse?) of public services, high(er) costs of living.....do you
think you're being a little overly dramatic?
Do you really think it all comes to back to one silly economic theory?
Nothing to do with the reality of automation, globalisation, growing populations and the
realities of living in 2018 rather than 1978?
Are voters around the world going hard against Neoliberalism? (I note it's now a
capitalised term).
In the US they voted for a billionaire who blamed immigrants for people's problems while
promising tax and spending cuts.....sounds like an even more extreme version of
neo-liberlaism to me.
In Britain they voted for Brexit to....oh that's right....kick out immigrants and burn
"red tape".
In Brazil, yep, more neo-liberalism on steroids.
In fact, looking around the world it's actually the far right which are seizing power.
And this is the issue with the obsessive preoccupation with community decline. It feeds
directly into the hands of fascism and the far right.
I'm not saying things are perfect. I would prefer to see much more government investment.
The only way we'll get that is to educate ourselves about how government finances work so
that we're not frightened off by talk of deficits.
However, by laying this all on the door of one rather silly economic theory is to ignore
that economics is nothing without human beings. It is human beings who are responsible for
all of the good and bad in the world. No theory is going change that. If the world is the way
it is it's because humans made it like this.
The "deterioration of the environment"? We did that not neo-liberalism .....
In answer to the headline article question, yes WE citizens should collectively strive to
think radically, bigger and better than the existing status quo.
PAY CITIZENS TO VOTE!
We must bypass the vested interests and create a new system which encourages active,
regular participation in democracy.... lest we wake up one day and realise too late that, by
stealth and citizen apathy, the plutocrats and their corporate fascist servants have usurped
our nation state, corrupted our law and weakened our institutions, to such a point that our
individual rights are permanently crushed.
Change is coming, like it or not. This century - there is great risk to society that
advanced technologies such as artificial intelligence, robotics and lifespan enhancing
genetic engineering will be used by ultra-rich plutocrats to make the vast majority of
humanity redundant (within a couple of generations).
Citizens should advocate for DIRECT DEMOCRACY in which citizens are PAID on a per vote per
issue basis (subject to verification checks that support the rewarding of effort- citizens
should be asked to first demonstrate that they have made effort to obtain sufficient
knowledge on a particular topic, prior to being rewarded for their service of voting. Such a
process can be opt-in, those who want to be paid, work to do so by learning about the
governance issue which is to be voted upon. In this way, a minimum wage can be obtained by
direct citizen participation in the governance of communities and our nation). We have the
technologies TODAY to undertake open-ledger, smart-phone enabled, digital/postal voting on a
per issue basis... which can be funded by EFFECTIVE taxation on large multinational
corporations and ultra-wealthy (foreign) shareholders. Citizen will is needed to influence
change - the major political parties did not want a Federal ICAC and they certainly will not
support paid direct citizen democracy unless voters overwhelming demand it.
Citizens already accept that politicians are paid to vote (and frequently "rewarded" for
their "service" to large corporations and wealthy (foreign) shareholders by unethical,
corrupt means). Thus, in principle, why can society not collectively accept direct payment to
citizens for their individual vote upon an issue? Why do citizens continue to accept
archaic systems of democracy which have clearly FAILED to meet the needs of our population in
the 21st century?
Citizens are not sufficiently politically engaged in democracy and their civic
responsibilities BECAUSE they are not incentivised to do so and because they are economic
slaves without the luxury of time to sort through deliberate overload of disinformation,
distortion, distraction and deception. Citizens are struggling to obtain objective
understanding and to think critically because these crucial functions of democracy are
innately discouraged by our existing 20th century economy (that is, slaves are busy support
the systems of plutocrats in order that they may live, ants to a queen).
We must advocate for change in the systems of democracy which are failing our communities,
our nation, our planet. For too long, plutocrats and their servants have maintained control
over economic slaves and the vast majority of the population because citizens have accepted
the status quo of being governed by the powerful.
Technology has permanently changed our species. We must all collectively act before innate
human greed, lust for power and fear of loss of control (by the wealthy few) lead the
majority on an irrational path toward destruction - using the very technologies which helped
set us free from the natural world!
In answer to the headline article question, yes WE citizens should collectively strive to
think radically, bigger and better than the existing status quo. PAY CITIZENS TO VOTE!
We must bypass the vested interests and create a new system which encourages active,
regular participation in democracy.... lest we wake up one day and realise too late that, by
stealth and citizen apathy, the plutocrats and their corporate fascist servants have usurped
our nation state, corrupted our law and weakened our institutions, to such a point that our
individual rights are permanently crushed.
Change is coming, like it or not. This century - there is great risk to society that
advanced technologies such as artificial intelligence, robotics and lifespan enhancing
genetic engineering will be used by ultra-rich plutocrats to make the vast majority of
humanity redundant (within a couple of generations).
Citizens should advocate for DIRECT DEMOCRACY in which citizens are PAID on a per vote per
issue basis (subject to verification checks that support the rewarding of effort- citizens
should be asked to first demonstrate that they have made effort to obtain sufficient
knowledge on a particular topic, prior to being rewarded for their service of voting. Such a
process can be opt-in, those who want to be paid, work to do so by learning about the
governance issue which is to be voted upon. In this way, a minimum wage can be obtained by
direct citizen participation in the governance of communities and our nation). We have the
technologies TODAY to undertake open-ledger, smart-phone enabled, digital/postal voting on a
per issue basis... which can be funded by EFFECTIVE taxation on large multinational
corporations and ultra-wealthy (foreign) shareholders. Citizen will is needed to influence
change - the major political parties did not want a Federal ICAC and they certainly will not
support paid direct citizen democracy unless voters overwhelming demand it.
Citizens already accept that politicians are paid to vote (and frequently "rewarded" for
their "service" to large corporations and wealthy (foreign) shareholders by unethical,
corrupt means). Thus, in principle, why can society not collectively accept direct payment to
citizens for their individual vote upon an issue? Why do citizens continue to accept
archaic systems of democracy which have clearly FAILED to meet the needs of our population in
the 21st century?
Citizens are not sufficiently politically engaged in democracy and their civic
responsibilities BECAUSE they are not incentivised to do so and because they are economic
slaves without the luxury of time to sort through deliberate overload of disinformation,
distortion, distraction and deception. Citizens are struggling to obtain objective
understanding and to think critically because these crucial functions of democracy are
innately discouraged by our existing 20th century economy (that is, slaves are busy support
the systems of plutocrats in order that they may live, ants to a queen).
We must advocate for change in the systems of democracy which are failing our communities,
our nation, our planet. For too long, plutocrats and their servants have maintained control
over economic slaves and the vast majority of the population because citizens have accepted
the status quo of being governed by the powerful.
Technology has permanently changed our species. We must all collectively act before innate
human greed, lust for power and fear of loss of control (by the wealthy few) lead the
majority on an irrational path toward destruction - using the very technologies which helped
set us free from the natural world!
Richard went off the rails in his opening sentence: "The opposite of a neoliberal economic
agenda isn't a progressive economic agenda, but democratic re-engagement."
I say this because economically misinformed democratic engagement is a shackle around
democracy, at best, if not fatal to democracy. And the biggest and most fundamental
misinformation, spouted every bit as much by ALP and Greens as the Libs, is that we must
strive for a "sustainable surplus".
As Richard rightly observes, "Neoliberalism taught us that "there is no alternative" to
cutting taxes, cutting services and letting the banks treat us as they see fit. But of course
not even the Coalition believes that any more." But that doesn't stop them, or Labor, or the
Greens from guaranteeing the continuance of the neoliberal cut & privatise mania by
insisting that they believe in "budget repair" and "return to surplus" - an insistence which
their economically illiterate or misled supporters accept. If you believe in the obviously
ridiculous necessity for a currency issuer to run balanced budgets, you are forced into
invalid neoliberal thinking, into accepting a false "necessity" for cuts and privatisations,
or economy-sedating taxation increases.
Rumours of neoliberalism's death have been somewhat exaggerated. Its been on life support
provided by the LNP since John Howard and there are still a few market fundamentalists
lurking in the ranks of the ALP, just waiting for their chance to do New Labor MkII in memory
of Paul Keating.
Neoliberalism's lasting legacy will not be the ludicrous economic programs, privatizations
and deregulation, those can all be rolled back if some party would grow a spine. The
real damage was caused by the aping of the US and UK's cult of individual responsibility, the
atomizing effects of neoliberal anti-social policy and demonization of collective action
including unionism.
All of which have hastened the atrophy of our democracy.
First things first lets get rid of the neo-liberal national dinosaurs still wallowing in
parliament unaware of the mass extinction awaiting them in March next year. At the same time
vote in a minority Labor government with enough independent cross benchers, including a
preponderance of Greens to keep the bastards honest.
Then just maybe we can start looking at the wider project of repairing Australian society
and democracy while we try and reverse the near-decade of damage the LNP have done with their
dangerous pro-fossil fuel stance, their insane climate change denial and hypocritical big
business friendly economic policies.
The irony is that it's simple. It's the Heath Robinson contraptions that the economic
priesthood for the plutocracy snow us with that are complicated, that turn us off economic
thinking because they are impenetrable and make no sense. The simplicity comes from
accepting the blinding obvious truth, once you think about it. The federal government is the
monopoly issuer of the AUD. The rest of the world are users, not issuers. Its "budgets" are
not our budgets. Nothing like them. Kind of the opposite. Its surpluses are the economy's
deficits. Its deficits are the economy's surpluses.
Former RBA governor says "Coalition pursues low-tax road to jobs and growth despite lack of
evidence to support it"
The incumbent political cabal of grifters and leaners aren't interested in evidence, for
the self righteous it has always been inconvenient & unnecessary.
Neo liberal capitalism is based on the premise that the Govt. sector
has a minimal role to play in the economy in a regulatory manner
, in the provision of goods/services and in redistributing wealth
........basically, the less Govt. the better.
As a starting point, it is best to consider what level of services
society expects from Govt. and to cost these, that then gives
you an amount of revenue required to fund these.......in Australia
our figure in 2017 was 28.2% of GDP (which also allowed for a
$6.2b. deficit and for some debt repayment)...the Federal share of this
was 21.6 % of GDP. In the world of wealthy countries (the OECD)
we sit at 27th of 35 ie: we are a low taxing country....the OECD average
is 34.3%.
The next part of any debate is what range and quality of services we expect
...in the US their social services/$'s provided by Govt. has plummeted by 50%
since neo liberalism was introduced (the Reagan era) whilst, for example Defence/
Security has risen by 5% of GDP and is by far the highest proportion in the world.
In Australia our proportions have changed far less......even with Medicare,
PBS, Child care subsidies, Education spending etc. our revenue rate has
dropped from an average of 33.5% of GDP to an average of 26.2% since the
1980's. (NDIS is too recent to be included but will up the ante).
The next step to consider is WHERE will the revenue come from and this
is where we have NOT followed the US in their lunacy.......since Reagan
their tax take from corporate profits and income taxes from the rich have
plummeted (and their deficits risen inexorably).
Putting it simply, Australia has indeed swallowed the neoliberal pill, but
has largely preserved its social amenity and the size of its Govt. sector.
It has privatised much but kept many aspects in public hands eg; much
of our healthcare. The pressures continue to privatise more, however
it still sees the Govt. being the funder but not the provider.....THAT has
been our massive change. Our reality has also been that household
incomes have been stagnant for years for at least 50% of our population
(it is worse in the US) as have been our income support payments ie:
Pensions and benefits (especially the latter that have gone backwards).
and our social mobility ie: the support/opportunity for people to move
from low to higher incomes (mostly via higher educational achievement)
have also stagnated in many cohorts.......in other words neoliberalism
has changed Australia, it has allowed the affluent and rich to improve
their situations but has seen stagnation for everyone else .......not
exactly a success after > 35 years, but at least not as bad as the US !
Neo-liberalism and it's form of capitalism is obviously not working; it's more of a Ponzi
scheme, and causes societal division and inequality to an extreme. These intransigent
politicians will keep taking us down the road of destruction unless we stop them.
Morrison and his cohort are dangerous, very dangerous, and will become even worse because
what they do is transparent, and we let them get away with it. To them, they see their
positions of power, and their actions, as being approved by the voting public to keep the
unethical behaviour going.
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Neo-liberalism = Failed Democracy/Corrupt government/Corporate feudalism.
Really no other way to describe it, and it's consequences.
And more and more people are waking up to this fact.
It's the 'what to do about it' that is the problem.
Overturn the government?
Revolution?
Bring back the tumbrils?
Personally, I'd think an aware, involved, and empowered citizenry would be the best solution.
Capitalism has brought lots of debt to the masses. $4 trillion of it in fact and that will
lead to poverty and misery if it can't be paid back readily.
Capitalism is fine until it enters this debt binge stage and then it needs a great big
correction to get it back on an even keel.
Since the 1980's and Thatcher and Reagan, the dominant political and economic rational has
been neo-liberalism. Even under Blair and Brown (labour PM's in the UK) the thinking was
neo-liberalism, as it largely was under Rudd and Gillard in Australia.
It is decades of right wing thinking which has been all pervasive in western societies and it
will take decades to correct the faults that have been created in society; starting with
changing the perceived accepted idea that govts do not exist to create jobs and that we
exist, as individuals, to serve the economy (as is evidenced by the punishing of the
unemployed and the drive to get women back into work as soon as possible after having
children).
Neoliberalism's great strength is its ability to divide and rule effectively via its
emphasis on individual responsibility and its insistence (as Thatcher cynically thundered)
that there is no such thing as society.
In the absence of any kind of inspirational narrative or indeed hope, the morally bankrupt
LNP have actually come to believe their own TINA propaganda. Their impoverished imaginations
just can't imagine any other way of maintaining the status quo for their constituency than by
keeping as much of the population as possible undereducated but surviving sufficiently to be
jealous of what they have and fearful of the state taking it away.
An atomised population is one in which daily life, in the words of Thomas Hobbes, is a
'war of all against all'. How pathetic that conservative governments in 2018 remain intent on
driving us back to a 'state of nature' Hobbes was condemning in 1651.
While our governments continue to be run by and for the benefit of big business and the
wealthy at the expense of the rest of society, low-taxing neoliberal dogma will remain the
order of the day.
Dear Bernie, when have ideologues of any persuasion ever, ever relied on evidence...
The Neo-liberal project was conceived as an ideology- a way to hollow out the democratic
legitimacy, and replace it with a Corporatocracy... This was based less on an economic
rationale but more as a reaction to the democratization of voices and the challenges they
posed to the 'old world' spheres of authority and power that emerged front he 60's and early
70's.
The Washington Consensus was the ideological product of this reaction- so vigorously
championed by Reagan and Thatcher- who could forget her silly remark that there is no such
thing as a society...
That's why the electorate in today's democratic countries seem to be only left with
"rhetorical" Leaders- windbags, whose pronouncements signify nothing.
I'm not a conspiracy theorist but* if was I would say that the lizard people introduced the
word "neo-liberalism" to distract people from the real issues......
But seriously, what the hell do people even mean by this term? darkbluedragon bless
his/her/their/its cotton socks has done his/her/their/its best to explain what it is. In
fact, if in 2019 we no longer identify along the lines of traditional gender roles why does
anyone think we can agree on a over-arching economic theory which apparently is responsible
for all of the woes in the world?
And actually the premise of all of this is of course how shit everything is today. People
love talking about how the world was so much better 40 years ago or whenever.
You know when women and minorities were discriminated against and so there were more jobs for
white men. Good times I say.
The reality is that the world is the way it is because of people. If neo-liberalism is all
about greed and meanness then frankly it's because people are greedy and mean. 100 years ago
we were killing each other with bayonets. Bankers screwing vulnerable customers is an
improvement compared to that shit.
Many people who talk about "neo-liebralism" in the political sense instead of the economic
sense are also terrified of government deficits and think government finances are like a
households. So what are you going to do?
If we're all going to become economists overnight (which I would strongly advise against)
then we may as well go the whole hog and understand the other side of the coin i.e. the
different monetary theories. But no side of the coin is going to be perfect
because....because....people, people. People in the shit sense and a people in the glorious
sense. People in all senses....
*Why does "I'm not.....but" always mean "I am"? I'm not racist but...I don't mean to be
rude but........
During their undergraduate years future politicians and business people learn about ideas
that then form the foundations of their understanding of the world and how it works.
Unfortunately, while the scholarship moves on, the politicians and business people don't,
having dedicated their lives to their careers. So we end up with governments of people
operating on principles some decades out of date, and often discredited. And when they want
advice, who do they turn to? Not academia (and if they do they usually ignore it), but to
business people, who are working off the same base.
It is often noticed that politicians in the twenty-first century seem to be applying
nineteenth century solutions to twentieth century problems. What can be done?
In the absence of an RC, then at least a twenty-year comparative analysis of the economic
and social 'benefits' (few) and costs (incalculable) of privatisation to the taxpayers of
Australia, and the 'benefits' (massive) and costs (none) to the private sector. Surely
someone has his data at their fingertips?
At long freaking last some sanity is creeping back into the discussion of economics amongst
those who have run the economy. Neo-liberal capitalism has run its course. It ended ten years
ago in the GFC and probably before. Whatever good it has done is being undone in its
extremes.
Even the capitalists at capitalist central do not believe in capitalism. When broke during
the GFC they declared they were "too big to fail" and so market forces no longer applied to
them. The people who own and run the capitalist system have long abandoned it but the
Corporate State and its serfs - such as the liberal party - want to foist it on the peasants
as a means of control.
The "too big to fail" capitalists park their business risk in the treasuries of the West and
pocket the profits and then blame the poor for the lack of public money. It would be funny if
it wasn't doing so much damage.
On climate change capitalism has failed. It has no way to deal with such an emergency.
Capitalism has always taken such things as clean air, water and land from others without
compensation and turned them into massive profit for the few. It can never tackle climate
change as it means paying for environmental damage and other public resources and that
contradict centuries of capitalist exploitation.
The answer for the right-wing neo-liberal capitalist is what it has always been when
confronted with the contradictions of capitalism. Racism and division. Exactly what the
IPA-liberal party has been about this last week big time. It is all normal for this
system.
Following the twin shocks of 2016 -- the U.K. Brexit vote and the election of Donald Trump
in the U.S. -- right-leaning nationalism and populism appear to be gaining steam, buoyed by the
public's dissatisfaction with globalization. At the same time, the political left is also
growing more ambitious and confident; for instance, according to one recent poll, Americans
aged 18-29 have a more positive view of socialism than of capitalism. Overall, the elite
consensus surrounding the neoliberal economic model -- which advocated a relatively small role
for government, deregulating markets to encourage competition, and liberalized international
trade and financial policies -- is teetering.
In emerging markets, meanwhile, a related series of debates are unwinding, and have been for
many years. Among these countries, the neoliberal economic model peaked in popularity sometime
in the 1990s, in the aftermath of the collapse of the Soviet Union and amidst optimism in an
accelerating globalization, epitomized in the creation of the World Trade Organization (WTO).
Even at its peak, however, the neoliberal reform program was always implemented unevenly across
countries and adapted to local contexts. Since then, a number of alternative models have been
proposed in response to a series of economic and political shocks, from the Asian financial
crisis to the "Pink Tide" in Latin America to the Arab Spring. These experiences provide a
fertile ground for assessing the possible futures of capitalism, across both emerging and
developed markets.
Neoclassical economics' focus on individual incentives and utility maximization misses much
bigger questions about structural power relations, which play a central role in determining
economic outcomes. Similarly, individuals' desires for status, happiness, and identity are
first order concerns, and cannot be easily incorporated into neoclassical models based on
assumptions of rationality. Alternative, heterodox approaches to economics -- which had
flourished in earlier eras but lost ground to neoclassical approaches in recent decades -- are
due for a revival. Such approaches could, for example, pay more attention to crises, tipping
points, and transitions rather than equilibria outcomes; provide a richer treatment of power
and politics; and study how governments create and shape markets, rather than simply respond to
market failures.
So what's next? The return to New Deal capitalism? But coalition of workers a management that
was at the core of the New Deal Capitalism does not exits. Look whom Democratic Party represents
today: they represent Wall Street and intelligence agencies.
The problem is that almost every authority figure - in economics, politics and the media -
tells us otherwise. You will hear plenty this week, as the global elite converge on the Swiss
mountain resort of Davos to discuss the challenges facing our economies and our world. Yet, I
can guarantee that despite all the talk, there will be no substantive questioning of the
immoral foundation of our modern economies.
The current inequality crisis is the direct result of this moral failure. Our exclusive,
highly unequal society based on extreme wealth for the few may seem sturdy and inevitable right
now, but it will collapse. Before long, the pitchforks will come out and the ensuing chaos will
benefit no one. Not wealthy people like me - and certainly not the poorest people who have
already been left behind.
To avert this existential crisis, we must drive a stake through the heart of the neoliberal
religion that instantly rewards greed at the expense of our future. We must replace it with a
new economic framework that recognises that justice and inclusion are not the result of
economic prosperity, but rather the cause of economic prosperity.
Only a society that seeks to include all its people in the economy can succeed in the long
term: no company, and certainly no billionaire is an island. We owe our wealth to society - to
the millions working each day for us at home and across the world, often for poverty wages. We
owe our fortunes to governments, who provide the education, the infrastructure, and the
research investment on which we build our empires. None of the companies I have invested in
would have been able to function without this.
A fundamental prerequisite for a more just society is that the wealthiest should pay their
fair share of tax. However, as Oxfam's inequality report, Private Wealth or Public
Good , demonstrates, this is not happening. Here in the United States, the richest in
society – people like me – have just benefited from one of the biggest tax cuts in
decades. Meanwhile our public schools are crumbling, and our healthcare system continues to
exclude millions, leading to huge pain and suffering. The top rates of tax on the wealthiest
people and corporations are lower than they have been for decades. Unprecedented levels of tax
avoidance and evasion ensure that the super-rich pay even less.
There can be no moral justification for this behaviour beyond a discredited neoliberal dogma
that if everyone maximises their selfishness, the world will somehow be a better place: that
ever-lower taxation on the richest will somehow benefit us all; that health and education left
to the mercy of the free market, available only to those who have the money to pay for them, is
somehow more efficient. It has no economic justification, either. As Henry Ford famously
identified, you can't grow a business or an economy if people are impoverished.
I have absolutely no doubt in my mind that the richest in our society can and should pay a
lot more tax to help build a more equal society and prosperous economy. As Oxfam shows, a
fairer tax system could help ensure that every child gets an education, and that no one lives
in fear of getting sick because they can't afford their medical bills.
Ultimately it is our humanity, not the absence of it, that is the true source of economic
growth and a flourishing civilisation. This is not just an imperative for activists and
academics but for all of us – including every billionaire. It is no longer a question of
whether we can afford to do this but rather whether we can afford not to.
"... The elite thinkers who penned this manifesto need to wake up. Any chance of holding onto Western Civilization and "the legacy of Erasmus, Dante, Goethe and Comenius (Comenius?)" lies with the nationalist right. The academic left no longer gives a shit about the Western Canon, they're all just dead privileged white guys to them. Book burnings to follow. ..."
"... Did Cook and other so called Geniuses ever consider our nations are failing apart because we finance and fight wars for Israel. What would the trillions spent in Iraq, Afghanistan, and the Middle East have fixed in our own country. ..."
"... "The first is the status-quo cheerleaders like the European writers of liberalism's latest – last? – manifesto. With every utterance they prove how irrelevant they have become, how incapable they are of supplying answers to the question of where we must head next. They adamantly refuse both to look inwards to see where [neo]liberalism went wrong and to look outwards to consider how we might extricate ourselves." ..."
"... "Action makes propaganda's effect irreversible. He who acts in obedience to propaganda can never go back. He is now obliged to believe in that propaganda because of his past action. He is obliged to receive from it his justification and authority, without which his action will seem to him absurd or unjust, which would be intolerable. He is obliged to continue to advance in the direction indicated by propaganda, for action demands more action." ..."
"... Much the same could have been said about the last days of the USSR, or for that matter the last phase of the 30 Years War or the Napoleonic Wars. As back then, so now: The old elite and new authoritarians actively crushing the new group, well, they are are actively crushing _themselves_ at an even greater rate than they are crushing the new group. ..."
"... Example: Decay of Democratic leadership -- which is now, apparently, two old crazy people, one of which has active dementia. Waiting in the wings we see various groups that hate each other and propose what is pretty clearly a loot and burn approach to governing the US. They vary only in whom they will loot and what they will burn. ..."
"... Example: Decay of the media, which now knows it is as ineffective as Russian propaganda towards the USSR's end, and apparently either doesn't care or is unable to change. ..."
"... If resource scarcity prompts armed response, well, humanity has enough shiny new weapons _and untried weapons technologies_ to produce destruction as surprising in its extent as WW I and WW II were for their times [1] (or as the self supporting tercio was during the 30 Years War). ..."
"... However, that classical liberalism has absolutely nothing to do with what this author labels "liberalism'. The modern so-called "neoliberalism" he talks about is a complete reversal of the original ideals of the classical liberals. ..."
"... In medieval times, the "nobles" could throw peasants who revolted too much off their land, impoverishing them in the process. The monarchies of the time could exert much control on the nobles, and indirectly on the peasants, BUT they had to be careful themselves, as there were a lot more peasants than nobles or royalty. Pushing too hard could initiate revolts, almost all of which would not bode well for the nobles or royalty. ..."
"... They are responsible for the islamization of Europe as well as destruction of the European "social fabric", for the longest time, which was based on ethnicity and commonality of purpose. ..."
"... The EU switched to open external frontiers, Asian outsourcing and the free international flow of capital (i.e. the full Neo-Liberal agenda), and it was when the consequences (de-industrialization, unemployment, mass non-European immigration) became apparent, that the public turned against the EU. ..."
Unless the tide can be turned, elections across the European Union will be "the most calamitous that we have ever known: victory
for the wreckers; disgrace for those who still believe in the legacy of Erasmus, Dante, Goethe, and Comenius; disdain for intelligence
and culture; explosions of xenophobia and antisemitism; disaster".
The elite thinkers who penned this manifesto need to wake up. Any chance of holding onto Western Civilization and "the legacy
of Erasmus, Dante, Goethe and Comenius (Comenius?)" lies with the nationalist right. The academic left no longer gives a shit about
the Western Canon, they're all just dead privileged white guys to them. Book burnings to follow.
Thirty Elite ..really how about fucking Communists. Social media is a cancer on society run by Jews for the Deep State. Meanwhile
in Israel they murder Palestinians, bulldoze their homes, build a wall and throw blacks out. Did Cook and other so called Geniuses
ever consider our nations are failing apart because we finance and fight wars for Israel. What would the trillions spent in Iraq,
Afghanistan, and the Middle East have fixed in our own country.
To put it bluntly: Does anyone have John Wick's phone number? We can take care of these problems very quickly.
"The first is the status-quo cheerleaders like the European writers of liberalism's latest – last? – manifesto. With every utterance
they prove how irrelevant they have become, how incapable they are of supplying answers to the question of where we must head
next. They adamantly refuse both to look inwards to see where [neo]liberalism went wrong and to look outwards to consider how we might
extricate ourselves."
Indeed, once they lie they must continue to lie, even they admit it:
"Action makes propaganda's effect irreversible. He who acts in obedience to propaganda can never go back. He is now obliged
to believe in that propaganda because of his past action. He is obliged to receive from it his justification and authority,
without which his action will seem to him absurd or unjust, which would be intolerable. He is obliged to continue to advance
in the direction indicated by propaganda, for action demands more action."
– from ' Propaganda ', by French communist, Jacques Ellul
Henryk Broder (also a Jew) recently spoke (on invitation) before the AfD faction of the Bundestag -- one theme of his talk
was: Seit die Menschen nicht mehr an Gott glauben, glauben sie allen möglichen Unsinn -- since people stopped believing
in God, they believe in all kinds of nonsense.
'Liber' in Latin means:
1) free (man)
2) free from tribute
3) independent, outspoken/frank
4) unimpeded
5) void of
The author needs to recheck his definitions. Voluntary exchange, consent, free markets, free will, etc are just some of the
concepts at the heart of the true libertarian thought. The ruling class has successfully ruled out any concept of consent. Keep
bringing consent up and their philosophies will be shown to be the same as gang rapists.
"The champions of socialism call themselves progressives, but they recommend a system which is characterized by rigid observance
of routine and by a resistance to every kind of improvement. They call themselves liberals, but they are intent upon abolishing
liberty. They call themselves democrats, but they yearn for dictatorship. They call themselves revolutionaries, but they want
to make the government omnipotent. They promise the blessings of the Garden of Eden, but they plan to transform the world into
a gigantic post office. Every man but one a subordinate clerk in a bureau. What an alluring utopia! What a noble cause to fight!"
– Ludwig Von Mises
"What is needed to save us is radical change. Not tinkering, not reform, but an entirely new vision that removes the individual
and his personal gratification from the centre of our social organisation."
I feel Cook's scorn for the hypocrisy of Levy and his self-infatuated band of scribblers and talkers, but when I hear someone
proposing to "save us" with "radical change" my reaction is: I don't want anyone trying to "save" me, particularly someone who
wants to do it in a "radical" way, which usually means a lot of coercion and often killing. He never gets to the specifics of
what that salvation will look like, but if the past is any indication, being saved by radicals means, learning-to-love the radicals
as they coerce you to do what they think is best for you and being happy to see your "personal gratification" eclipsed by theirs.
Alexandria Ocasio-Cortez, one of our "radicals" in Congress wants to put that "new vision" into place. I'll go with reactionaries
instead.
Bernard Henry Levy is a Sephardic jew born in Algeria ,
https://en.wikipedia.org/wiki/Bernard-Henri_L%C3%A9vy
, He lives in France and is always warmongering for Israel , demanding that the " west " intervenes and bombs all the countries
that he orders Libia, Syria , Iraq , Ukraine , Russia , Venezuela , Afghanistan , Iran , Yemen , Cuba , you name it .
The third trend is the only place where hope can reside. This trend – what I have previously ascribed to a group I call
the "dissenters" – understands that radical new thinking is required. But given that this group is being actively crushed by
the old liberal elite and the new authoritarians, it has little public and political space to explore its ideas, to experiment,
to collaborate, as it urgently needs to.
Much the same could have been said about the last days of the USSR, or for that matter the last phase of the 30 Years War
or the Napoleonic Wars. As back then, so now: The old elite and new authoritarians actively crushing the new group, well, they
are are actively crushing _themselves_ at an even greater rate than they are crushing the new group.
Example: Decay of Democratic leadership -- which is now, apparently, two old crazy people, one of which has active dementia.
Waiting in the wings we see various groups that hate each other and propose what is pretty clearly a loot and burn approach to
governing the US. They vary only in whom they will loot and what they will burn.
Example: Decay of the media, which now knows it is as ineffective as Russian propaganda towards the USSR's end, and apparently
either doesn't care or is unable to change.
Example: Reaction to yellow vests in France, which drew the reactions described in Cook's article (at the root of this comment
thread). "Back to your kennels, curs!" isn't effective in situations like this, but it seems to be the only reply the EU has.
New groups take over when the old group has rotted away. At some point, Cook's third alternative will be all that is left.
The real question is what will be happening world wide at that point. If resource scarcity prompts armed response, well, humanity
has enough shiny new weapons _and untried weapons technologies_ to produce destruction as surprising in its extent as WW I and
WW II were for their times [1] (or as the self supporting tercio was during the 30 Years War).
Counterinsurgency
1] To understand contemporary effect of WW I on survivors, think of a the survivors of a group playing paintball who accidentally
got hold of grenade launchers but somehow didn't realize that until the game was over. WW II was actually worse -- people worldwide
really expected another industrialized war within 20 years (by AD 1965), this one fought with nuclear weapons.
"[neo]Liberalism, like most ideologies, has an upside. Its respect for the individual and his freedoms, "
Yes, that was an ideal of the original , 19th century classical liberalism. Other features of the classical liberal ideal were:
1] small governments tightly constrained to particular functions [ defense, courts only]
2]freedom of trade between individuals.
However, that classical liberalism has absolutely nothing to do with what this author labels "liberalism'. The modern so-called "neoliberalism" he talks about is a complete reversal of the original ideals of the classical liberals.
Many people have an erroneous concept of the relationships between "leaders" and their "subjects".
In medieval times, the "nobles" could throw peasants who revolted too much off their land, impoverishing them in the process.
The monarchies of the time could exert much control on the nobles, and indirectly on the peasants, BUT they had to be careful
themselves, as there were a lot more peasants than nobles or royalty. Pushing too hard could initiate revolts, almost all of which
would not bode well for the nobles or royalty.
It is entirely possible that our "leaders" are fearful of losing control with the proliferation of the internet and social
media, and the ability for every person with an internet connection to be a seeker of truth and a "true" journalist, free of the
constraints of the "old systems, the "powers that be" are running scared. They no longer control the narrative, as much as they
would like to the jewish "brainwashing" of the masses is starting to wear off.
They are responsible for the islamization of Europe as well as destruction of the European "social fabric", for the longest
time, which was based on ethnicity and commonality of purpose. That has pretty much been lost, with the introduction of immigrants
who don't even know how to read or use flush toilets. Add to that, the prohibition on criticism of many practices of these immigrants,
as well as making excuses for their criminality. The debasement of European societies is deliberate. The elites want destruction,
period they want their "new world order"
no nationalism before ours. Apparently, only Jewish Identity is real while all others are false identities no better than false
idols.
Cultural Marxism : Its central idea is to soften up and prepare Western Civilization for economic Marxism after a
gradual, relentless, sustained attack on every institution of Western culture, including schools, literature, art, film, the
Christian religious tradition, the family, sexual mores, national sovereignty, etc. The attacks are usually framed in Marxist
terms as a class struggle between oppressors and oppressed; the members of the latter class allegedly include women, minorities,
homosexuals, and adherents of non-Western ideologies such as Islam. Cultural Marxism has been described as "the cultural branch
of globalism."
Trotskyism : The political, economic, and social principles advocated by Trotsky especially the theory and practice
of communism developed by or associated with Trotsky and usually including adherence to the concept of worldwide revolution
as opposed to socialism in one country.
Bernard Henry Levy is like a vulture, he was in the Yugoslavian wars also , in the Georgian invasion of Russia wherever he goes
there will be war , blood and misery , soon
The Guardian ( of the British Empire ) like other " prestigious " " liberal " journals has to be read the other way around
. If they praise a lot someone , it means that this someone is a servant of the western System , and if they critizise sistematically
someone , it means that he probably is a patriot ,that defends his country from western greed .
If the attitude of the nation's Elites is "You the National Folk are NOT our people and, if anything, we globo-homo
elites side with the foreign masses who shall replace you" , then the attitude of the National Folk should be "You the
globo-homo pseudo-national elites are not OUR leaders, and if anything, we patriotic folks side with foreign elites who shall
subvert you."
[neo]Liberalism, like most ideologies, has an upside. Its respect for the individual and his freedoms, its interest in nurturing
human creativity, and its promotion of universal values and human rights over tribal attachment have had some positive consequences
Nazi Germany was beaten, so was the USSR. Liberalism wins actual and cold wars, it's stronger because it creates a larger more
powerful economy. The only trouble is it sows the seeds of long term future dissolution.
More immediately pertinent, Liberalism, in
its current self correcting theory of the free market mutation is not working against China because the entry of a billion Chinese
into the globalized labour market is eroding the basis for indigenous labour in Western countries along with their productive
capacity.
The problem is that the business class are strongly incentivized to like a hagfish eating up the economic and demographic
core of Western countries from the inside.
If the EU were by the Europeans for the Europeans and not promoting anti-European policies like population replacement by non-Europeans
then there would be no need to call for the various exits.
Bernard-Henri Levy is (((liberal elite)))? Why the unnecessary occlusion? His position precisely reflects the Jewish Tanakh politics of foreign nation destruction. These politics are not vague in their
book, nor do they differ in the slightest from his politics. See his simultaneous support of both Jewish nationalism and liberalism
for non-Jews that is the marker of Jewish Supremacy.
Re: Dante
Although Guelph by ethnicity, Dante was a Ghibelline imperialist, that is a monarchist, who supported the Holy Roman Empire.
The HRE was the nobility or land-owner faction. The Papacy was the supporter of the merchant class. Dante was the opposite of
everything that Bernard Levy is espousing, and his most famous work, the Inferno, was an allegory that reflected those politics.
Levy's invocation of Dante is strange in that it either reveals a curious lack of knowledge in regard to Dante or a disingenuous
co-opting of his illustrious name for political purposes.
Excellent piece, as always, Jonathan! What is missing is your vision of the doctrine you approve of. I understood you do not like
neoliberalism, fine. I understand you do not like nationalism of Trump and Salvini, of Le Pen and BNP, fine. But what do you like?
Give us a hint. Is it Corbyn's Labour and Sanders' Dems? Or more radical Communism?
I absolutely agree with the necessity of restoring value and focus to the family/tribe/community, but I'm deeply suspicious of
any blanket indictment of individualism. Individualism is not inherently destructive selfishness, any more than using the resources
of the state to benefit its people is inherently "socialist."
Any plan for moving forward that starts by bad-mouthing individualism is simply riding history's baby-with-the-bathwater pendulum
to the opposite extreme – a sad and hollow caricature of communitarianism immediately made suspect by the coercive abuses baked
into systems such as communism, theocracy, faceless bureaucracy, homogenizing consumerism, etc
According to a book I read, How Sweden Became Multicultural , a man named (((David Schwarz))) almost singlehandedly
spearheaded the changes that led to Sweden becoming a multicultural country, one in which they are destined to become a minority.
(((Emanuel Celler))) also made it his lifelong mission to get the restrictionist Immigration Act of 1924 repealed and replaced
by the non-restrictionist Immigration Act of 1965.
Thanks to George Soros and the work of his Open Society Foundations, this story has been replicated in almost all Western
nations.
As George W Bush once infamously claimed, Mission Accomplished !
The letter was penned by Bernard Henry Levy a French jew. this guy, an Israeli firster, is a warmonger of the worst kind. he was
behind the destruction of Libya. Actively supports the aggression on Syria, Yemen; Calls for aggression on Iran. He opposes the
planned US withdrawal from Syria and thinks that trump is a danger to the "Jewish people" . The fact that he is sponsoring
the letter speaks volumes. He doesn´t like politicians who favor nationalist policies; he calls them populists. He doesn't like
criticism of Israeli racist policies, he calls it anti-Semitism, etc. I wonder how he managed to secure so many signatures.
Yes, but he's attacked for other reasons entirely. As matters stand, if you join in the vilification of Jeremy Corbyn, you're
helping to establish Zionism as unassailable.
It's a bit like if you were Labour, and this were 1940. You might not like Churchill, but the alternative is to accede
to appeasing Hitler. That was in fact the choice Labour faced, and they had to swallow Churchill -- for the time being.
It's no longer a matter of liking Corbyn. It's a matter of who would rather have to put up with: Corbyn or Zionist domination?
@Anon
Because BHL is himself a multimillionare: "His father, André Lévy, was the founder and manager of a timber company, Becob, and
became a multimillionaire from his business In 2004, his fortune amounts to 150 million euros. Owner of seven companies, his fortune
comes essentially from the inheritance of his parents, then completed by stock exchange investments (he is in 2000 suspected of
insider trading by the Commission des opérations de bourse) "
@Christopher
Black ts of European people. The EU switched to open external frontiers, Asian outsourcing and the free international flow
of capital (i.e. the full Neo-Liberal agenda), and it was when the consequences (de-industrialization, unemployment, mass non-European
immigration) became apparent, that the public turned against the EU.
The ideal solution would be a return to the original EEC (with its closed external frontier and removal of internal barriers
to the internal movement of people and goods), but it's probably too late for that, as the whole Europe idea will probably be
trashed in the counter reaction with a return to all the inter-European trade hassles of the 1950's and 60's.
This 20 year old satire looks like it was written yesterday...
Notable quotes:
"... In the past, the underworld was ill-equipped to handle the new breed of sinners flooding our gates -- downsizing CEOs, focus-group coordinators, telemarketing sales representatives, and vast hordes of pony-tailed entertainment-industry executives ..."
"... Among the tortures the Corpadverticus Circle of Total Bastards boasts: the Never-Ending Drive-Thru Bank, the Bottomless Pit of Promotional Tie-In Keychains, and the dreaded Chamber of Emotionally Manipulative Home Shopping Network Products. ..."
"... condemned TV-exercise-show personalities, clad in skin-tight Spandex outfits soaked in flesh-dissolving acid, are forced to exercise for centuries on end ..."
"... In a nearby area, corporate raiders are forced to carry the golf clubs of uneducated Hispanic migrant workers from hole to hole for eternity, withering under a constant barrage of verbal abuse ..."
"... "In life, I was a Salomon Brothers investment banker," one flame-blackened shade told reporters. "When I arrived here, they didn't know what to do with me. They put me in with those condemned to walk backwards with their heads turned all the way around on their necks, for the crime of attempting to see the future. But then I sent a couple of fruit baskets to the right people, and in no time flat, I secured a cushy spot for myself in the first circle of the Virtuous Unbaptized. Now that was a sweet deal. But before long, they caught on to my game and transferred me here to the realm of Total Bastards. I've been shrieking for mercy like a goddamn woman ever since." ..."
After nearly four years of construction at an estimated cost of 750 million souls,
Corpadverticus, the new 10th circle of Hell, finally opened its doors Monday.
Tenth Circle Added To Rapidly Growing Hell
The Blockbuster Video-sponsored circle, located in Nether Hell between the former eighth and
ninth levels of Malebolge and Cocytus, is expected to greatly alleviate the overcrowding
problems that have plagued the infernal underworld in recent years. The circle is the first
added to Hell in its countless-millennia history.
"A nightmarishly large glut of condemned spirits in recent years necessitated the expansion
of Hell," inferno spokesperson Antedeus said. "The traditional nine-tiered system had grown
insufficient to accommodate the exponentially rising numbers of Hellbound."
Adding to the need for expansion, Antedeus said, was the fact that a majority of the new
arrivals possessed souls far more evil than the original nine circles were equipped to handle.
"Demographers, advertising executives, tobacco lobbyists, monopoly-law experts retained by
major corporations, and creators of office-based sitcoms–these new arrivals represent a
wave of spiritual decay and horror the likes of which Hell has never before seen," Antedeus
said.
Despite the need for expansion, the plan faced considerable resistance, largely due to the
considerable costs of insuring construction projects within the Kingdom Of Lies. Opposition
also came from Hell purists concerned about the detrimental effect a tenth level would have on
the intricate numerology of Hell's meticulously arranged allegorical structure. In 1994,
however, funding was finally secured in a deal brokered between Blockbuster CEO Wayne Huizenga
and Satan himself.
Prior to the construction of the tenth circle, many among the new wave of sinners had been
placed in such circles as Hoarders and Squanderers, Sowers of Discord, Flatterers and Seducers,
Violent Against Art, and Hypocrites. Hell authorities, however, say that the new level, the
Circle of Total Bastards, located at the site of the former Well of Giants just above the
Frozen Lake at Hell's center, better suits their insidious brand of evil.
Frigax The Vile, a leading demonic presence, is one of the most vocal supporters of the new
circle.
" In the past, the underworld was ill-equipped to handle the new breed of sinners
flooding our gates -- downsizing CEOs, focus-group coordinators, telemarketing sales
representatives, and vast hordes of pony-tailed entertainment-industry executives
rollerblading and talking on miniaturized cell-phones at the same time. But now, we've finally
got the sort of top-notch Pits of Doom necessary to give such repellent abominations the
quality boilings they deserve."
Pausing to tear off the limbs of an Access Hollywood host, Frigax added, "We're all
tremendously excited about the many brand-new forms of torture and eternal pain this new
level's state-of-the-art facilities will make possible."
Among the tortures the Corpadverticus Circle of Total Bastards boasts: the Never-Ending
Drive-Thru Bank, the Bottomless Pit of Promotional Tie-In Keychains, and the dreaded Chamber of
Emotionally Manipulative Home Shopping Network Products.
The Circle also features a Hall of Aerobics, where condemned TV-exercise-show
personalities, clad in skin-tight Spandex outfits soaked in flesh-dissolving acid, are forced
to exercise for centuries on end , covered in vomit and prodded with the distended ribs of
skeletal, anorexic demons, accompanied by an unending, ear-splittingly loud dance-remix version
of the 1988 Rick Astley hit "Together Forever."
In a nearby area, corporate raiders are forced to carry the golf clubs of uneducated
Hispanic migrant workers from hole to hole for eternity, withering under a constant barrage of
verbal abuse from their former subservients as crows descend from trees to peck at their
eyes. In one of the deepest and most profane portions of the circle, unspeakable acts are said
to be committed with a mail-order Roly-Kit.
"In life, I was a Salomon Brothers investment banker," one flame-blackened shade told
reporters. "When I arrived here, they didn't know what to do with me. They put me in with those
condemned to walk backwards with their heads turned all the way around on their necks, for the
crime of attempting to see the future. But then I sent a couple of fruit baskets to the right
people, and in no time flat, I secured a cushy spot for myself in the first circle of the
Virtuous Unbaptized. Now that was a sweet deal. But before long, they caught on to my game and
transferred me here to the realm of Total Bastards. I've been shrieking for mercy like a
goddamn woman ever since."
His face contorted in the Misery of the Damned, a Disney lawyer said: "It's hell
here–there are no executive lounges, I can't get any decent risotto, and the suit I have
to wear is a cheap Brooks Brothers knock-off. I'm beeped every 30 seconds, and there's no way
to return the calls. Plus, I'm being boiled upside down in lard while jackals gnaw at the soles
of my feet. If I could just reach the fax machine on that nearby rock, I could contact some
well-placed associates and work something out, but it's just out of my grasp, and it's out of
ink and constantly blinking the message, 'Replace Toner Cartridge, Replace Toner Cartridge,
Replace Toner Cartridge.'"
He then resumed screaming in agony.
Grogar The Malefic, a Captain in Hell's elite Demon Corps and supervisor in charge of
admissions for the new circle, said Hell's future looks bright, thanks to the new circle.
"Things are definitely looking up," Grogar said. "We're now far better equipped, and we're
ready to take on the most Unholy Atrocities humanity has to offer."
"We're really on the grow down here," Grogar added. "This is an exciting time to be in
Hell."
What we are experiencing today is the worst and most extreme form of predatory and parasitic
financialised monopoly crony capitalism (crapitalism), allied with blatant aggressive
jingoistic militarism and the crudest form of imperialist exploitation.
I'm not sure even Marx envisaged anything this corrupt and degraded. This must be the
terminal stage of crapitalism's death throes. It can only end in war and complete
collapse.
It comes as no surprise to see the Faux Left Blairite Backstabbers and the
Oh-So-Right-On-Politically-Correct Trudeau Regime leading the charge for a bog standard
Pinochet style US coup behind the likes of Trump, Bolton, Pompeo and recycled neocon war
criminal and death squad queen Abrams.
They have taken off the mask and showed their true colours. The final outcome is uncertain
but the fall out will extend way beyond Venezuela. It may well sound the death knell of our
current system.
Isn't it amazing how the scum of the Earth arrange to get into high places? I am totally
outraged that Canada had anything to do with fostering a coup in Venezuela! It disturbs my
sense of national sovereignty and I rue the day that Trudeau made this apostosy a member of
his cabinet. What a poor choice for a Minister of Foreign Affairs! Just consider Canada's
recent problems with Saudi Arabia, the Meng problem with /China, the chastising of Russia
because it protected its sole military base on the Black Sea and now this foolish
interference in Venezuela's internal affairs brought on by US sanctions. Canada's stupidity
in all these matters makes me bilious.
Trudeau made Soros' protege Chrystia Freeland part of his cabinet because it was on that
condition that Soros generously funded and otherwise caused Trudeau's election bid to be well
supported. Billionaires make "democratic" politics so very easy. Canadians, naive,
unquestioning, insouciant, swayed by very well rewarded PR & media and with the
transacted aquiesence of the other two warmongering neoliberal parties (Conservative &
NDP) voted their hopes and Justin Trudeau to PM. But positioning Chrystia Freeland on the
global stage and creating a neoliberal path to imperious fascist globalization is the
assigned purpose of the swish disposable Canadian Dauphin. Harper played his Soros assigned
role, Trudeau will play his and Chrystia hers and they, as quislings all, will exit rewarded
as pet functionaries of Soros and his overly entitled ilk. We authorize Soros by wishing
& believing this coup is at worst simply a flawed democracy. Ukraine was a Soros coup,
Canada is a Soros coup and Venezuela is a Soros coup. All very, very profitable. Don't look,
this is how omelettes are made. Our political parties are always for rent by billionaires
–that is the main function of political parties. Being corrupt is a design
characteristic not a flaw. Buying political parties in supposed democracies is easier, less
risky and much more profitable than stealing candy from babies. Canada is undefended against
billionaires, invest here, concentrated public assets and resources are available and the
quaint people are professionally deactivated. m\\
"... Unfettered individual creativity may have fostered some great – if fetishised – art, as well as rapid mechanical and technological developments. But it has also encouraged unbridled competition in every sphere of life, whether beneficial to humankind or not, and however wasteful of resources. ..."
"... At its worst, it has unleashed quite literally an arms race, one that – because of a mix of our unconstrained creativity, our godlessness and the economic logic of the military-industrial complex – culminated in the development of nuclear weapons. We have now devised the most complete and horrific ways imaginable to kill each other. We can commit genocide on a global scale ..."
"... Those among the elites who understand that neoliberalism has had its day are exploiting the old ideology of grab-it-for-yourself capitalism while deflecting attention from their greed and the maintenance of their privilege by sowing discord and insinuating dark threats. ..."
"... The criticisms of the neoliberal elite made by the ethnic nationalists sound persuasive because they are rooted in truths about neoliberalism's failure. But as critics, they are disingenuous. They have no solutions apart from their own personal advancement in the existing, failed, self-sabotaging system. ..."
"... This trend – what I have previously ascribed to a group I call the "dissenters" – understands that radical new thinking is required. But given that this group is being actively crushed by the old neoliberal elite and the new authoritarians, it has little public and political space to explore its ideas, to experiment, to collaborate, as it urgently needs to. ..."
Ok neoliberalism is bad and is collapsing. We all understadn that. The different in opinions
here is only in timeframe of the collapse and the main reason (end of cheap oil, WWIII, etc).
But so far no plausible alternative exists. Canwe return to the New Deal, if top management
betrayed the working class and allied with capital owners in a hope later to became such
capital owners themselves (and many did).
The experience of the USSR tells as that each Nomenklatura (technocratic elite with the goal
of "betterment" of people) degrade very quickly (two generations were enough for Bolshevik's
elite for complete degradation) and often is ready switch sides for the place in neoliberal
elite.
So while after 2008 neoliberalism exist in zombie states (which is more bloodthirsty then
previous) they issue of successor to neoliberalism is widely open.
In one sense, their diagnosis is correct: Europe and the [neo]neoliberal tradition are
coming apart at the seams. But not because, as they strongly imply, European politicians are
pandering to the basest instincts of a mindless rabble – the ordinary people they have so
little faith in.
Rather, it is because a long experiment in Neoliberalism has finally run its course.
Neoliberalism has patently failed – and failed catastrophically.
... ... ...
Neoliberalism, like most ideologies, has an upside. Its respect for the individual and his
freedoms, its interest in nurturing human creativity, and its promotion of "universal values"
over tribal attachment have had some positive consequences.
But neoliberal ideology has been very effective at hiding its dark side – or more
accurately, at persuading us that this dark side is the consequence of neoliberalism's
abandonment rather than inherent to the neoliberal's political project.
The loss of traditional social bonds – tribal, sectarian, geographic – has left
people today more lonely, more isolated than was true of any previous human society. We may pay
lip service to universal values, but in our atomised communities, we feel adrift, abandoned and
angry.
Humanitarian resource grabs
The neoliberal's professed concern for others' welfare and their rights has, in reality,
provided cynical cover for a series of ever-more transparent resource grabs. The parading of
neoliberalism's humanitarian credentials has entitled our elites to leave a trail of carnage
and wreckage in their wake in Afghanistan, Iraq, Libya, Syria and soon, it seems, in Venezuela.
We have killed with our kindness and then stolen our victims' inheritance.
Unfettered individual creativity may have fostered some great – if fetishised
– art, as well as rapid mechanical and technological developments. But it has also
encouraged unbridled competition in every sphere of life, whether beneficial to humankind or
not, and however wasteful of resources.
At its worst, it has unleashed quite literally an arms race, one that – because of
a mix of our unconstrained creativity, our godlessness and the economic logic of the
military-industrial complex – culminated in the development of nuclear weapons. We have
now devised the most complete and horrific ways imaginable to kill each other. We can commit
genocide on a global scale .
Meanwhile, the absolute prioritising of the individual has sanctioned a pathological
self-absorption, a selfishness that has provided fertile ground not only for capitalism,
materialism and consumerism but for the fusing of all of them into a turbo-charged
neoliberalism. That has entitled a tiny elite to amass and squirrel away most of the planet's
wealth out of reach of the rest of humanity.
Worst of all, our rampant creativity, our self-regard and our competitiveness have blinded
us to all things bigger and smaller than ourselves. We lack an emotional and spiritual
connection to our planet, to other animals, to future generations, to the chaotic harmony of
our universe. What we cannot understand or control, we ignore or mock.
And so the neoliberal impulse has driven us to the brink of extinguishing our species and
possibly all life on our planet. Our drive to asset-strip, to hoard resources for personal
gain, to plunder nature's riches without respect to the consequences is so overwhelming, so
compulsive that the planet will have to find a way to rebalance itself. And if we carry on,
that new balance – what we limply term "climate change" – will necessitate that we
are stripped from the planet.
Nadir of a dangerous arrogance
One can plausibly argue that humans have been on this suicidal path for some time.
Competition, creativity, selfishness predate neoliberalism, after all. But neoliberalism
removed the last restraints, it crushed any opposing sentiment as irrational, as uncivilised,
as primitive.
Neoliberalism isn't the cause of our predicament. It is the nadir of a dangerous arrogance
we as a species have been indulging for too long, where the individual's good trumps any
collective good, defined in the widest possible sense.
The neoliberal reveres his small, partial field of knowledge and expertise, eclipsing
ancient and future wisdoms, those rooted in natural cycles, the seasons and a wonder at the
ineffable and unknowable. The neoliberal's relentless and exclusive focus is on "progress",
growth, accumulation.
What is needed to save us is radical change. Not tinkering, not reform, but an entirely new
vision that removes the individual and his personal gratification from the centre of our social
organisation.
This is impossible to contemplate for the elites who think more neoliberalism, not less, is
the solution. Anyone departing from their prescriptions, anyone who aspires to be more than a
technocrat correcting minor defects in the status quo, is presented as a menace. Despite the
modesty of their proposals, Jeremy Corbyn in the UK and Bernie Sanders in the US have been
reviled by a media, political and intellectual elite heavily invested in blindly pursuing the
path to self-destruction.
Status-quo cheerleaders
As a result, we now have three clear political trends.
The first is the status-quo cheerleaders like the European writers of neoliberalism's latest
– last? –
manifesto . With every utterance they prove how irrelevant they have become, how incapable
they are of supplying answers to the question of where we must head next. They adamantly refuse
both to look inwards to see where neoliberalism went wrong and to look outwards to consider how
we might extricate ourselves.
Irresponsibly, these guardians of the status quo lump together the second and third trends
in the futile hope of preserving their grip on power. Both trends are derided indiscriminately
as "populism", as the politics of envy, the politics of the mob. These two fundamentally
opposed, alternative trends are treated as indistinguishable.
This will not save neoliberalism, but it will assist in promoting the much worse of the two
alternatives.
Those among the elites who understand that neoliberalism has had its day are exploiting
the old ideology of grab-it-for-yourself capitalism while deflecting attention from their greed
and the maintenance of their privilege by sowing discord and insinuating dark threats.
The criticisms of the neoliberal elite made by the ethnic nationalists sound persuasive
because they are rooted in truths about neoliberalism's failure. But as critics, they are
disingenuous. They have no solutions apart from their own personal advancement in the existing,
failed, self-sabotaging system.
The new authoritarians are reverting to old, trusted models of xenophobic nationalism,
scapegoating others to shore up their own power. They are ditching the ostentatious,
conscience-salving sensitivities of the neoliberal so that they can continue plundering with
heady abandon. If the ship is going down, then they will be gorging on the buffet till the
waters reach the dining-hall ceiling.
Where hope can reside
The third trend is the only place where hope can reside. This trend – what I have
previously ascribed to a group I call the "dissenters" – understands that radical new
thinking is required. But given that this group is being actively crushed by the old neoliberal
elite and the new authoritarians, it has little public and political space to explore its
ideas, to experiment, to collaborate, as it urgently needs to.
Social media provides a potentially vital platform to begin critiquing the old, failed
system, to raise awareness of what has gone wrong, to contemplate and share radical new ideas,
and to mobilise. But the neoliberals and authoritarians understand this as a threat to their
own privilege. Under a confected hysteria about "fake news", they are rapidly working to snuff
out even this small space.
We have so little time, but still the old guard wants to block any possible path to
salvation – even as seas filled with plastic start to rise, as insect populations
disappear across the globe, and as the planet prepares to cough us out like a lump of infected
mucus.
We must not be hoodwinked by these posturing, manifesto-spouting liberals: the philosophers,
historians and writers – the public relations wing – of our suicidal status quo.
They did not warn us of the beast lying cradled in our midst. They failed to see the danger
looming, and their narcissism blinds them still.
We should have no use for the guardians of the old, those who held our hands, who shone a
light along a path that has led to the brink of our own extinction. We need to discard them, to
close our ears to their siren song.
There are small voices struggling to be heard above the roar of the dying neoliberal elites
and the trumpeting of the new authoritarians. They need to be listened to, to be helped to
share and collaborate, to offer us their visions of a different world. One where the individual
is no longer king. Where we learn some modesty and humility – and how to love in our
infinitely small corner of the universe.
Jonathan Cook won the Martha Gellhorn Special Prize for Journalism. His books include
"Israel and the Clash of Civilisations: Iraq, Iran and the Plan to Remake the Middle East"
(Pluto Press) and "Disappearing Palestine: Israel's Experiments in Human Despair" (Zed Books).
His website is www.jonathan-cook.net .
With the growing movement towards nuclear war, we have indeed reached the nadir. It is
important to see how humanity got here, for the signs are ominous.
The pattern of history is clear. Power (manifested as interest) has been present in every
conflict of the past – no exception. It is the underlying motivation for war.
Other
cultural factors might change, but not power. Interest cuts across all apparently unifying
principles: family, kin, nation, religion, ideology, politics – everything. We unite
with the enemies of our principles, because that is what serves our interest. It is power,
not any of the above concepts, that is the cause of war.
Maybe it is just me but I didn't see any actual solution or much of anything in his third
group. You know, the one with all the "correct" answers. All I saw was that it was a glorious
vision without all the failings of the other two while rejecting all the badthink.
Every major tragedy in human history starts out with people thinking they have a system
better than all the previous that ever occurred. It too soon becomes a religion that needs to
defend itself by executing all the blasphemers.
Maybe it is just me but I didn't see any actual solution or much of anything in his
third group. You know, the one with all the "correct" answers. All I saw was that it was a
glorious vision without all the failings of the other two while rejecting all the
badthink.
Exactly.
I've been waiting for the author, or some from his "group", to post here at least a LINK
to that solution, even a suggestion, of theirs. Hell, even the proper analysis of what's not
right. A foundation of sort.
So far, as you said, nothing.
Anon[248], February 3, 2019 at 5:29 am GMT
Levy another Jewish "intellectual" shilling for globalization and open borders - for Western nations only, to hasten their
demise. What else is new?
"... Living standards are more than a house with indoor plumbing automatic heat, and lights at the flip of a switch. Its being able to talk with interested people about interesting topics. About being able to see interesting things when looking at the window, or walking, or riding. ..."
Have you ever been to
Kansas? Might as well move to Mexico, or Puerto Rico.
Kansas has gotten worse because of cost cutting. Cost cutting means living costs are less
because the standard of living is less.
Living standards are more than a house with indoor plumbing automatic heat, and lights at
the flip of a switch. Its being able to talk with interested people about interesting topics. About being able to see interesting things when looking at the window, or walking, or
riding.
It tried to be connected to the world. If the politics were say 1870, they would want 600kph
high speed train service so a day trip to a city like St Louis or Chicago was
reasonable.
"... Last night, President Trump reserved a few minutes of his State of the Union address to praise his tax reform law, which turned a year old last month. To promote its passage, Mr. Trump and his congressional allies promised Americans that drastically lowered corporate tax rates would bring home large sums of capital that had been stashed overseas and finance a surge of domestic investment. ..."
"... Why would any multinational corporation pay America's 21 percent tax rate when it could pay the new "global minimum" rate of 10.5 percent on profits shifted to tax havens, particularly when there are few restrictions on how money can be moved around a company and its foreign subsidiaries? ..."
"... For starters, the law's repatriation deal did prompt a brief surge in offshore profits returning to the United States. But the total sum returned so far is well below the trillions many proponents predicted, and a large chunk of the returned funds have been used for record-breaking stock buybacks, which don't help workers and generate little real economic activity. ..."
"... Bottom line: the Trump tax cut is a giveaway to corporations that doesn't promote investment here ..."
The Global Con Hidden in Trump's Tax Reform Law, Revealed
Why would any multinational corporation pay the new 21 percent rate when it could use the new
"global minimum" loophole to pay half of that?
By Brad Setser
Last night, President Trump reserved a few minutes of his State of the Union address
to praise his tax reform law, which turned a year old last month. To promote its passage, Mr.
Trump and his congressional allies promised Americans that drastically lowered corporate tax
rates would bring home large sums of capital that had been stashed overseas and finance a
surge of domestic investment.
"For too long, our tax code has incentivized companies to leave our country in search of
lower tax rates," he said, pitching voters in the fall of 2017. "My administration rejects
the offshoring model, and we have embraced a brand-new model. It's called the American
model."
The White House argued they wanted a system that "encourages companies to stay in America,
grow in America, spend in America, and hire in America." Yet the bill he signed into law
includes a sweetheart deal that allows companies that shift their profits abroad to pay tax
at a rate well below the already-reduced corporate income tax -- an incentive shift that
completely contradicts his stated goal.
Why would any multinational corporation pay America's 21 percent tax rate when it
could pay the new "global minimum" rate of 10.5 percent on profits shifted to tax havens,
particularly when there are few restrictions on how money can be moved around a company and
its foreign subsidiaries?
These wonky concerns were largely brushed aside amid the political brawl. But now that a
full year has passed since the tax bill became law, we have hard numbers we can evaluate.
For starters, the law's repatriation deal did prompt a brief surge in offshore profits
returning to the United States. But the total sum returned so far is well below the trillions
many proponents predicted, and a large chunk of the returned funds have been used for
record-breaking stock buybacks, which don't help workers and generate little real economic
activity.
And despite Mr. Trump's proud rhetoric regarding tax reform during his State of the Union
address, there is no wide pattern of companies bringing back jobs or profits from abroad. The
global distribution of corporations' offshore profits -- our best measure of their tax
avoidance gymnastics -- hasn't budged from the prevailing trend.
Well over half the profits that American companies report earning abroad are still booked
in only a few low-tax nations -- places that, of course, are not actually home to the
customers, workers and taxpayers facilitating most of their business. A multinational
corporation can route its global sales through Ireland, pay royalties to its Dutch subsidiary
and then funnel income to its Bermudian subsidiary -- taking advantage of Bermuda's corporate
tax rate of zero.
Where American Profits Hide
[Graph]
No major technology company has jettisoned the finely tuned tax structures that allow a
large share of its global profits to be booked offshore. Nor have major pharmaceutical
companies stopped producing many of their most profitable drugs in Ireland. And Pepsi, to
name just one major manufacturer, still makes the concentrate for its soda in Singapore, also
a haven.
Eliminating the complex series of loopholes that encourage offshoring was a major talking
point in the run-up to the 2017 tax bill, but most of them are still in place. The craftiest
and largest corporations can still legally whittle down their effective tax rate into the
single digits. (In fact, the new law encourages firms to move "tangible assets" -- like
factories -- offshore).
Overall, the Tax Cuts and Jobs Act amounted to a technocratic sleight of hand -- a scheme
set to shift an even greater share of the federal tax burden onto the shoulders of American
families. According to the Treasury Department's tally for fiscal year 2018, corporate income
tax receipts fell by 31 percent, an unprecedented year-over-year drop in a time of economic
growth (presumably a time when profits and government revenue should rise in tandem).
These damning results, to be sure, don't make for a good defense of what came before the
new law. In theory under the old system, American-based firms still owed the government a cut
of their global profits. In practice, large firms could indefinitely defer paying this tax
until the funds could be repatriated -- usually when granted a tax holiday by a friendly
administration.
Over a generation, this political dance was paired with rules that made it relatively easy
for firms to transfer their most prized intellectual property -- say, the rights to popular
software or the particular mix of ingredients for a hot new drug -- to their offshore
subsidiaries. Taken together, they created a tax nirvana of sorts for multinational
corporations, particularly in intellectual-property-intensive industries like tech and
pharmaceuticals. But it wasn't enough.
For their next trick, the companies worked with their political allies to favorably frame
the 2017 tax debate. When he was the House speaker, Paul Ryan was fond of talking about $3
trillion in "trapped" profits abroad. But those profits weren't actually, physically, sitting
in a few tax havens.
Dwarf Economies, Giant American Profits
[Graph]
They were largely invested in United States bank accounts, securities and bonds issued by
the Treasury or other companies headquartered in the States. As Adam Looney -- a Brookings
Institution fellow and former Treasury Department official -- has explained, companies that
needed to finance a new domestic investment could simply issue a bond effectively backed by
its offshore cash. (For instance, Apple could bring its "trapped" funds onshore by selling a
bond to Pfizer's offshore account, or vice versa.)
Put plainly, they got the best of both worlds: Uncle Sam could tax only a small slice of
their books while they traded with one another based on the size of the entire pie.
The scale of the tax shifting has become so immense that some economists believe curbing
it could raise reported G.D.P. by well over a percentage point -- something Mr. Trump, who's
been absorbed by opportunities to brag about the economy, should notionally welcome.
President Trump's economic advisers and the key architects of the bill on Capitol Hill
must have known their reform wasn't going to end business incentives that hurt American
workers. Honest reform would have meant closing corporate loopholes -- a move they originally
promised to make.
Should the opportunity present itself, perhaps to the next president, there are a couple
of viable options for a fundamental tax overhaul that wouldn't require reinstating the 35
percent corporate tax rate.
One of several possibilities is to return to a system of global taxation without the
deferrals that enabled empty repatriations. That would mean profits sneakily booked tax-free
in Bermuda would be taxed every year at 21 percent. Profits booked in Ireland -- or other
low-tax nations -- would be taxed at the difference between Ireland's rate and America's
rate.
It's an approach that would protect small and midsize American companies while cracking
down on bad corporate actors with enough fancy accountants and lawyers to rig the game to
their advantage. And it would be far better than the fake tax reform passed a year ago.
This is very good from the essential Brad Setser, our leading expert on international
trade and money flows. Bottom line: the Trump tax cut is a giveaway to corporations that
doesn't promote investment here 1/
The Global Con Hidden in Trump's Tax Reform Law, Revealed
Why would any multinational corporation pay the new 21 percent rate when it could use the
new "global minimum" loophole to pay half of that?
2:14 PM - 6 Feb 2019
@Brad_Setser also gets at something I've been trying to explain: corporate cash "overseas"
isn't really a stash of money that can be brought home, it's an accounting fiction that lets
them avoid taxes, with no real consequences for investment 2/
And this chart, showing the predominance of tax avoidance in overseas "investment", is a
classic 3/
If Trump runs of the defense of neoliberalism platform he will lose. But Trump proved to be a bad, superficial politician,
Republican Obama so to speak, so he may take this advice from his entourage. Trump proved to be a puppet of MIC and
Israel, his tax cuts had shown that he is a regular "trickle down" neoliberal. So he attraction to voters is down
substantially. Now
Polling is unambiguous here. If you define the "center" as a position
somewhere between those of the two parties, when it comes to economic issues the public is overwhelmingly left of center; if anything,
it's to the left of the Democrats. Tax cuts for the rich are the G.O.P.'s defining policy, but two-thirds of voters believe that taxes
on the rich are actually too low, while only 7 percent believe that they're too high. Voters support Elizabeth Warren's proposed tax
on large fortunes by a three-to-one majority. Only a small minority want to see cuts in Medicaid, even though such cuts have been central
to every G.O.P. health care proposal in recent years.
Notable quotes:
"... Insiders have suggested that Trump plans to explicitly run against socialism in 2020. In fact, in playing up the dangers of socialism, he may be positioning himself to run against Bernie Sanders in 2020. ..."
"... Sanders's rebuttal to Trump's address gave us a preview of how he plans to respond to the mounting attacks on socialism from the Right. President Trump said tonight, quote, "We are born free, and we will stay free," end of quote. Well I say to President Trump, people are not truly free when they can't afford to go to the doctor when they are sick. People are not truly free when they cannot afford to buy the prescription drugs they desperately need. People are not truly free when they are unable to retire with dignity. People are not truly free when they are exhausted because they are working longer and longer hours for lower wages. People are not truly free when they cannot afford a decent place in which to live. People certainly are not free when they cannot afford to feed their families. ..."
"... As Dr Martin Luther King Jr said in 1968, and I quote, "This country has socialism for the rich, and rugged individualism for the poor." What Dr. King said then was true, and it is true today, and it remains absolutely unacceptable. ..."
"... In essence what we're seeing here is Bernie Sanders challenging the popular equation of capitalism with democracy and freedom. This is the same point Bernie has been making for decades. "People have been brainwashed into thinking socialism automatically means slave-labor camps, dictatorship and lack of freedom of speech," he said in 1976. This Cold War dogma swept the pervasive reality of capitalist unfreedom - from the bondage of poverty to the perversions of formal democracy under the pressure of a dominant economic class - under the rug. In a 1986 interview, Bernie elaborated: ..."
"... All that socialism means to me, to be very frank with you, is democracy with a small "d." I believe in democracy, and by democracy I mean that, to as great an extent as possible, human beings have the right to control their own lives. And that means that you cannot separate the political structure from the economic structure. One has to be an idiot to believe that the average working person who's making $10,000 or $12,000 a year is equal in political power to somebody who is the head of a large bank or corporation. So, if you believe in political democracy, if you believe in equality, you have to believe in economic democracy as well. ..."
"... The rise of neoliberalism and the fall of the Soviet Union relieved the capitalist state's elite of the need to keep shoring up the equation between capitalism and freedom. Capitalists and their ideology had triumphed, hegemony was theirs, and socialism was no real threat, a foggy memory of a distant era. But forty years of stagnating wages, rising living costs, and intermittent chaos caused by capitalist economic crisis remade the world - slowly, and then all at once. When Bernie Sanders finally took socialist class politics to the national stage three years ago, people were willing to listen. ..."
Trump Is Right to Be Afraid of Socialism
BY MEAGAN DAY
... I think he's scared," said Ocasio-Cortez of Trump's socialism remarks. "He sees that everything is closing in on him. And
he knows he's losing the battle of public opinion when it comes to the actual substantive proposals that we're advancing to the
public." Given the remarkable popularity of proposals like Bernie's Medicare for All and tuition-free college and Ocasio-Cortez's
70 percent top marginal tax rate, she's probably onto something.
Insiders have suggested that Trump plans to explicitly
run against socialism in 2020. In fact, in playing up the dangers of socialism, he may be positioning himself to run against Bernie
Sanders in 2020. That would be a smart move, since Bernie is the most popular politician in America and could very well be
Trump's direct contender in the general election, if he can successfully dodge attacks from the establishment wing of the Democratic
Party in the primary.
Sanders's rebuttal to Trump's address gave us a preview of how he plans to respond to the mounting attacks on socialism
from the Right. President Trump said tonight, quote, "We are born free, and we will stay free," end of quote. Well I say to President
Trump, people are not truly free when they can't afford to go to the doctor when they are sick. People are not truly free when
they cannot afford to buy the prescription drugs they desperately need. People are not truly free when they are unable to retire
with dignity. People are not truly free when they are exhausted because they are working longer and longer hours for lower wages.
People are not truly free when they cannot afford a decent place in which to live. People certainly are not free when they cannot
afford to feed their families.
As Dr Martin Luther King Jr said in 1968, and I quote, "This country has socialism for the rich, and rugged individualism
for the poor." What Dr. King said then was true, and it is true today, and it remains absolutely unacceptable.
In essence what we're seeing here is Bernie Sanders challenging the popular equation of capitalism with democracy and freedom.
This is the same point Bernie has been making for decades. "People have been brainwashed into thinking socialism automatically
means slave-labor camps, dictatorship and lack of freedom of speech," he said in 1976. This Cold War dogma swept the pervasive
reality of capitalist unfreedom - from the bondage of poverty to the perversions of formal democracy under the pressure of a dominant
economic class - under the rug. In a 1986 interview, Bernie elaborated:
All that socialism means to me, to be very frank with you, is democracy with a small "d." I believe in democracy, and by
democracy I mean that, to as great an extent as possible, human beings have the right to control their own lives. And that means
that you cannot separate the political structure from the economic structure. One has to be an idiot to believe that the average
working person who's making $10,000 or $12,000 a year is equal in political power to somebody who is the head of a large bank
or corporation. So, if you believe in political democracy, if you believe in equality, you have to believe in economic democracy
as well.
For more than four decades, Bernie made these points to relatively small audiences. In 2016, everything changed, and he now
makes them to an audience of millions.
The rise of neoliberalism and the fall of the Soviet Union relieved the capitalist state's elite of the need to keep shoring
up the equation between capitalism and freedom. Capitalists and their ideology had triumphed, hegemony was theirs, and socialism
was no real threat, a foggy memory of a distant era. But forty years of stagnating wages, rising living costs, and intermittent
chaos caused by capitalist economic crisis remade the world - slowly, and then all at once. When Bernie Sanders finally took socialist
class politics to the national stage three years ago, people were willing to listen.
Bernie has been so successful at changing the conversation that the President now feels obligated to regurgitate Cold War nostrums
about socialism and unfreedom to a new generation.
Good, let him. Each apocalyptic admonition is an opportunity for Bernie, and the rest of us socialists, to articulate a different
perspective, one in which freedom and democracy are elusive at present but achievable through a society-wide commitment to economic
and social equality. We will only escape "coercion, domination, and control" when we structure society to prioritize the well-being
of the many over the desires of the greedy few.
Mr. Bill said in reply to anne... February 06, 2019 at 03:29 PM
A lot of the opinion part of what Paul Krugman says, in this article, maybe, doesn't ring quite true, although I don't dispute
the facts.
Poll after poll show that 75% of us agree on 80% of the issues, regardless of which political tribe we identify with.
I tend to think that the real problem is that neither the GOP, which represents the top 1% of the economically comfortable, nor the
Democrats who represent the top 10%, are representative of the majority of Americans.
Frantically trying to slice and dice the electorate into questionably accurate tranches, ignores the elephant in the room, Paul.
As neocolonial empire of it s own (albeit the one that is vassal of the USA) yes it does,
especially in xUSSR state where EU wants to capture the makets. Ukraine is a nice example
here.
Does the European Union generate external instability?
The historic achievement of peace within a Europe of universal norms is belied by the external
instability engendered by violent and incoherent interventions.
By Branko Milanovic
The European Union is justly admired for making war among its members impossible. This is no
small achievement in a continent which was in a state of semi-permanent warfare for the past
two millennia.
It is not only that we cannot even imagine the usual 19th and 20th century antagonists, such
as France and Germany, going to war ever again. The same is true of other, lesser-known
animosities which have led periodically to bloodlettings: between Poles and Germans, Hungarians
and Romanians, Greeks and Bulgarians. Unthinkable is also the idea that the United Kingdom and
Spain could end up, regarding Gibraltar, in a reprise of the Falklands/Malvinas war.
Destabilised
But creating geopolitical stability internally has not, during the last two decades, been
followed by external geopolitical stability along the fringes of the union. Most of the big EU
member states (UK, Poland, Italy, Spain) participated, often eagerly, in Operation Iraqi
Freedom, which led to the deaths of some half a million people, destabilised the middle east
even further and produced Islamic State.
Then, seemingly not having learned from this fiasco, France and Italy spearheaded another
regime change, this time in Libya. It ended in anarchy, another civil war, two competing
governments and a UN Security Council deadlocked for years to come -- since it is clear that
China and Russia will not in the foreseeable future vote to allow another western military
intervention.
The wars along the long arc from Libya to Afghanistan, in which EU powers participated, were
the proximate cause of large refugee flows a few years ago, which continue even now. (As I have
written elsewhere, the underlying cause of migration is the large gap in incomes between
Europe, on the one hand, and Africa and the 'greater middle east', on the other, but the sudden
outbursts were caused by wars.)
The next example of generating instability was Ukraine, where the then government of Viktor
Yanukovych, having only postponed the signing of an EU agreement, was driven out of power in
2014 in a coup-like movement supported by the union. It is sure that a reasonable
counterfactual, with the same EU-Ukraine agreements being signed and without a war in eastern
Ukraine and with Crimea still part of Ukraine, would have been much preferable to the current
situation, which threatens to precipitate a war of even much greater dimensions.
Finally, consider Turkey, in an association agreement with the European Economic Community
since 1963, and thus in a membership-awaiting antechamber for more than half a century. The
initial period in power of Recep Tayyip Erdoğan was marked by pro-European policies, a
desire to create an 'Islamic democracy', in the mould of the Christian democracies of Italy and
Germany, and civilian control over the army. But realisation that, because of its size and
probably because of its dominant religion, Turkey would never be recognised as part of Europe
led Erdoğan, gradually, to move in an altogether different direction -- with an almost
zero chance that he would come back to his original pro-European stance.
The endless waiting period, with similarly protracted negotiations over what are now 35
chapters which need to be agreed between candidate countries and all 28 (or soon 27) members,
is what lies behind the frustration with the EU in the Balkans. Long gone are the days when
Greece could become a member after a couple of months (if that) of negotiations and an
agreement between the French president, Valéry Giscard d'Estaing, and the German
chancellor, Helmut Schmidt. The European bluff -- it neither has the stick nor the carrot --
albeit long hidden behind the veil of negotiations, was recently called by the Kosovo
leadership, when it engaged in a trade war with Serbia. The EU could express its 'regrets' but
it was squarely ignored. In the past, nether Kosovo nor any other Balkan state would have dared
to defy Europe so openly.
Slow and hesitant
It all means that Europe needs a much better thought-out external policy with respect to its
neighbours. There are already some signs that it is moving in that direction but it is doing so
too slowly and hesitantly. A multilateral compact with Africa is needed to regulate migration
from a continent with the fastest rising population and lowest incomes. Much more European
investment -- in hard stuff, not conferences -- is needed. Rather than complaining about
China's Belt and Road initiative, Europe should imitate it -- and, if it desires to counteract
Chinese political influence, invest its own money to make more African friends. A similar set
of much more proactive policies is required within the framework of the Mediterranean
initiative, while military options in the region should be forsworn no less clearly than they
are within the union.
When it comes to the potential members, as in the Balkans or the western republics of the
former Soviet Union, interminable talks should be replaced by either special association with
no expectation of EU membership or clearer, time-limited negotiations leading to membership.
Both would manage expectations better and avoid the build-up of resentment and frustration.
The most important challenge is the relationship with Turkey. The EU does not have a
blueprint for a Turkey after Erdoğan; nor can it offer anything to the Turkish secular
opposition, as it is not clear within itself whether it wants Turkey in or out. It should be
rather obvious that a European Turkey, with its vast economic potential and influence in the
middle east, would be a huge economic and strategic asset. Such a Turkey would also behave
differently in Syria and in Anatolia, because it would have an incentive to follow European
rules.
This rethinking of the EU's neighbourhood policy thus calls, in short, for three things:
greater economic aid to Africa, no support for wars or regime change, and much clearer rules
and time-limits for membership talks.
Perhaps, you ascribe to the EU successes that it did not create.
The formation of the EU is not the vehicle that created, nor sustained, the uneasy peace.
I suggest it was the resolution of WW2 that has determined the current state of
tolerance.
I fear that the formation of the EU, in the end, will be the cause of a re-instigation of
the age old skirmishes that have plagued the world, as you say, for two millennia.
The destruction of the Middle East by the West, not just the EU but the US, is a
foolishness of biblical proportions.
The EU's disposition of Greece and Brexit are red flags that the EU is an unsustainable
contrivance that will eventually, come undone. The mercantilist wars between France, England,
Spain, Germany, Italy, etc, may rise again. Hopefully, I'm wrong.
The Sum of Some Global Fears
Setting the table for a smorgasbord recession.
By Paul Krugman
The last global economic crisis, for all its complex detail, had one big, simple cause: A
huge housing and debt bubble had emerged in both the United States and Europe, and it took the
world economy down when it deflated.
The previous, milder recession, in 2001, also had a single cause: the bursting of a bubble
in technology stocks and investment (remember Pets.com?).
But the slump before that, in 1990-91, was a messier story. It was a smorgasbord recession
-- a downturn with multiple causes, ranging from the troubles of savings and loan institutions,
to a glut of office buildings, to falling military spending at the end of the Cold War.
The best guess is that the next downturn will similarly involve a mix of troubles, rather
than one big thing. And over the past few months we've started to see how it could happen. It's
by no means certain that a recession is looming, but some of our fears are beginning to come
true.
Right now, I see four distinct threats to the world economy. (I may be missing others.)
China: Many people, myself included, have been predicting a Chinese crisis for a long time
-- but it has kept not happening. China's economy is deeply unbalanced, with too much
investment and too little consumer spending; but time and again the government has been able to
steer away from the cliff by ramping up construction and ordering banks to make credit
ultra-easy.
But has the day of reckoning finally arrived? Given China's past resilience, it's hard to
feel confident. Still, recent data on Chinese manufacturing look grim.
And trouble in China would have worldwide repercussions. We tend to think of China only as
an export juggernaut, but it's also a huge buyer of goods, especially commodities like soybeans
and oil; U.S. farmers and energy producers will be very unhappy if the Chinese economy
stalls.
Europe: For some years Europe's underlying economic weakness, due to an aging population and
Germany's obsession with running budget surpluses, was masked by recovery from the euro crisis.
But the run of good luck seems to be coming to an end, with the uncertainty surrounding Brexit
and Italy's slow-motion crisis undermining confidence; as with China, recent data are ugly.
And like China, Europe is a big player in the world economy, so its stumbles will spill over
to everyone, the U.S. very much included.
Trade war: Over the past few decades, businesses around the world invested vast sums based
on the belief that old-fashioned protectionism was a thing of the past. But Donald Trump hasn't
just imposed high tariffs, he's demonstrated a willingness to violate the spirit, if not the
letter, of existing trade agreements. You don't have to be a doctrinaire free-trader to believe
that this must have a depressing economic effect.
For now, corporate leaders reportedly believe that things won't get out of hand, that the
U.S. and China in particular will reach a deal. But this sentiment could turn suddenly if and
when business realizes that the hard-liners still seem to be calling the shots.
The shutdown: It's not just the federal workers not getting paid. It's also the contractors,
who will never get reimbursed for their losses, the food stamp recipients who will be cut off
if the stalemate goes on, and more. Conventional estimates of the cost of the shutdown are
almost surely too low, because they don't take account of the disruption a nonfunctioning
government will impose on every aspect of life.
As in the case of a trade war, business leaders reportedly believe that the shutdown will
soon be resolved. But what will happen to investment and hiring if and when corporate America
concludes that Trump has boxed himself in, and that this could go on for many months?
So there are multiple things going wrong, all of which threaten the economy. How bad will it
be?
The good news is that even taking all these negatives together, they don't come close to the
body blow the world economy took from the 2008 financial crisis. The bad news is that it's not
clear what policymakers can or will do to respond when things go wrong.
Monetary policy -- that is, interest rate cuts by the Federal Reserve and its
counterparts abroad -- is normally the first line of defense against recession. But the Fed has
very limited room to cut, because interest rates are already low, and in Europe, where rates
are negative, there's no room at all.
Fiscal policy -- temporary hikes in government spending and aid to vulnerable workers -- is
the usual backup to monetary easing. But would a president who's holding federal workers
hostage in pursuit of a pointless wall be willing to enact a sensible stimulus? And in Europe,
any proposal for fiscal action would probably encounter the usual German nein.
Finally, dealing effectively with any kind of global slump requires a lot of international
cooperation. How plausible is that given who's currently in charge?
Again, I'm not saying that a global recession is necessarily about to happen. But the risks
are clearly rising: The conditions for such a slump are now in place, in a way they weren't
even a few months ago. Reply
Tuesday, January 29, 2019 at 11:07 AM
As Karl Marx wrote in the middle of the nineteenth century: Imbalances in pre-capitalist
economies do not produce aggregate demand crises and collapses. Why don't they? Because
Pharaoh can always command that another pyramid be built, the king can always set out on
another crusade, and the bishop can always build another cathedral. The expenditures that
provide employment for those not producing the consumption-goods-in-demand only have to make
profit-and-loss sense under the capitalist mode of production. Capitalist economies suffer
Hayek-Minsky crises when deluded financial markets suddenly recognize that they have been
over optimistic, have over invested, and need to shift investment-goods production back down
not to normal but way below normal. And the collapse comes as near-universal bankruptcy and
financial disruption prevents any such smooth expenditure-shifting. That Hayek-Minsky
overinvestment crisis is what Paul Krugman, I, and other China-pessimists have been fearing
for two decades now. But perhaps socialism with Chinese characteristics is insufficiently
capitalist for that Hayek-Minsky logic to apply, and Paul and I and others should have been
paying more attention to Uncle Karl. * **
Let us get Delong to write about a public banking system, not-for-profit, that provides
basic banking services to account holders and has the credit-creating privilege to fund
mortgages, durable goods lending, educational support lending with the goal of supporting
medium term basic consumption needs of the population while even offering to pay a good
interest on the monies held in these personal accounts.
He needs to think more about why credit creation by the public's government cant
supplement the private wielding of this privilege (held by banks now, which he ponts out is a
source of instability of great risk) as done in the US type countries.
The Chinese have moved to a mixed view, coming from one pole; we can have a mix too?
I'd suspect we would do it better because of our form of government and freedoms. We need
more people like him thinking about this mix. And more people like Bernie Sanders who
mobilizes such discussions into public discourse.
The state must control the commanding heights of the credit system
And use that control for the common good
Btw
The citizenry needs a place to store money form
Wealth against devaluation
Nothing more nothing less
A rate of real interest equal to the rate of change in labor productivity should
be.limited to stored income directly from labor earnings
Not earning on earnings
Or the Pharoah can increase military spending. Like Rome. A corruption of the human
conscience that lasted for over one thousand years, compared to our puny 250 years.
I am a critic of Dr. De Long, with a memory of his ambition exceeding his reasoning. In his
former life, he was a China dove, selling the neoliberal nostrum of free trade at the
pinnacle of power.
A Walmartian apologist without the requisite wisdom.
Part of their criticism of China was its alleged overinvestment in "pyramids" in the form of
ghost cities, empty buildings, and fast trains without passengers.
Turns out that even if true, that was a pretty clever economic plan.
As I understand it, the Chinese government has kept a tight rein on their financial system
and its allocation of investments. You can have considerable private property and enrichment
under that "insufficiently capitalistic" umbrella.
As I understand it, the Chinese government has kept a tight rein on their financial system
and its allocation of investments. You can have considerable private property and enrichment
under that "insufficiently capitalistic" umbrella.
[ Chinese monetary and fiscal policy are primarily directed rather than general. So that a
region, urban or rural, or class of companies or class of households will be the focus. China
is presently building entire cities...
As for building pyramids, building usually anticipates use so that a project may take time
to be well "occupied" or "utilized" but as I track projects the use comes and comes. The
Chinese are just now completing a global positioning system and while the system adds to that
of the United States use is increasing dramatically in China and beyond. This year there will
be between 2 and 3 satellite launches weekly on average, but the Chinese anticipate need.
]
Yes
Building for future use that will come in time
The discount in the delay only applies if superior sides of finds are passed over
Ie if there's slack the opportunity cost is
Not a real cost
Every development system faces an unknowable path of innovation and pattern development
Vieeeing development at the firm level is never optimal.
Yes full best use utilization earlier is
Improving outcomes and clearly a constant goal of development
But real cost is measured by alternative projects not actual built because the chosen project
crowds it out
With slack this can be avoided by increasing use of existing but unde utlized productive
factors
Notice the causal circle here
Better utilization all the way around
In a a system with unknown unknowns
And real time planning constraints
We just do the best we can 24/7/365
Were Chinese planners to work according to demonstrated present need alone, most of Chinese
infrastructure would not be built. Planning means anticipation for the Chinese and I can
assure any reader who has not been to, say, Shanghai that the supposed pyramids that have
been built are repeatedly proven useful to essential.
I remember an especially fierce typhoon approaching the southern coast of China west of
Hong Kong not long after new rail lines had been completed. The Chinese emergency authorities
evacuated some 4 million people in 24 hours to avoid the storm and there was no difficulty.
The return was also smooth and fast.
Article after article in the Western press about China will argue that projects are
"pyramids," and far too expensive, in the building and in use, even for pyramids, and Chinese
planners seldom respond, but later a high-speed rail system extending from Hong Kong to
Beijing will come to be so well traveled that there will be complaints in the Hong Kong press
about all those bustling "mainland" commuters (880,000 passengers in the opening 2 weeks).
The bridge-tunnel system extending across the bay from Hong Kong to Macao? Well, the
Chinese want an urban area extending from Hong Kong to Macao...
Keynes used the narrative about burying stuff and paying people to dig it up as a way to
support demand and physical distributions of flow where needed.
I wonder what he might have said if he faced a population of this size. I think he would
understand what the chinese officials have done.
Keynes used the narrative about burying stuff and paying people to dig it up as a way to
support demand and physical distributions of flow where needed.
I wonder what he might have said if he faced a population of this size. I think he would
understand what the Chinese officials have done.
[ What the Chinese have done is create moderately prosperous lives for hundred of millions
of people, so in a sense stuff has been buried and dug up but this was wildly productive
stuff. Forty-two years of real GDP growth at 9.5% yearly and per capita GDP growth at 8.4%
yearly with the "slow" GDP growth of 2018 at 6.6%.
Life expectancy increased by 11 years from 1977 through 2016, and was 7.7 years higher
than that in India in 2016 and within 2.4 years of that in the United States. ]
I think what you meant to say that American capitalists made a deal with a communist
dictatorship to undermine the labor movement in the Western economies, resulting in a
transfer of wealth from the Western middle class to the Chinese peasantry and the
capitalists. Labor arbitrage.
You always claim that the pittance to the peasants justifies the destruction of American
labor. You are a neoliberal apologist of the worst kind. You must have tenure.
Conjecture China should still be developing at 9 percent...
[ This must be explained. After all, what about India or Brazil or South Africa or
Indonesia or Mexico or Nigeria...?
Chinese planners projected yearly growth at 6.5% through this current 5 year period. The
gains that are being aimed for take more application of technology, more advanced technology,
and specific programs for the poorer regions. ]
And the chinese may have acknowleged the need to move a bit more slowly, urbanization brings
environmental issues that ought to be balanced and rapid change threatens a much needed
balance.
And perhaps they are getting more stable, so to speak, in anticipation of inroducing a
retirement earning system, like our social security system. I assume they will do this as it
is one way to boost consumerism and reconcile the ageing society pressures (fewer next
generation people to take care of the elderly as they ply their urban lives means the old
needs an income stream to buy services). So they need to take care more not to dissipate
resources wastefully or public sentiments until they are ready - so going a but more slowly
might help.
Also, in thinking about the rate of Chinese growth slowing from a 42 year average of 9.5% to
6.5%, the emphasis that is being placed in China on clean or green growth might slow the rate
at least in transition years. I think that Dean Baker wrote on this growth characteristic a
few years ago and I will find the paper.
Make no mistake however, green growth is being emphasized through China.
Simply accelerate the green transition in as much as its about new and different machines.
[ Agreed, which is just what China is now doing in regard to electric vehicles. This year
will be a fine test of how fast China and grow as a greening economy, for President Xi is
going to publish a paper this week focusing on just how necessary green growth is for
China.
I have the paper from Dean Baker, but an unconvinced that a green transition for an
economy means slower growth:
They way our economists measure the value of these "pyramids" is hopelessly inadequate. E.g.
where is the accounting that measures the opportunities opened to young people from remote
villages engaged in small-scale agriculture.
And to your other point, they measure each project at a firm level (would a private
company be making a profit from this?) and miss the projects effect on the larger
economy.
And to make them (our economists) look even worse, even by their own measures most of
these projects are quite successful.
Maybe they should be looking at China and trying to learn something. Wait, hasn't someone
been saying that?
They way our economists measure the value of these "pyramids" is hopelessly inadequate. E.g.
where is the accounting that measures the opportunities opened to young people from remote
villages engaged in small-scale agriculture....
Oh they are looking at China and learning plenty about how a dictatorship can control the
population and repress opposition. I cannot believe the ignorant, glowing discussion of
Chinese fascism on this site in defense of disproven economic principles, actually quoting
Marx, the disprover.
A sense of what green infrastructure development has meant in urban China comes from American
company 3M recording a revenue decline because the sales of masks to protect against smog in
Chinese cities has fallen so steeply. Turning coal use to natural gas, makes lots and lots of
difference...
The stats should put a value on pollution reduction
[ That has been a thought for years and years, but has gone nowhere. I am interested in
what is counted in GDP, with a green emphasis being reflected by other data. Weighing turtles
against shovels is of no consequence. ]
As I understand it, the Chinese government has kept a tight rein on their financial system
and its allocation of investments....
[ Not company by company control, but control of investment direction coupled with
monitoring of company performance. China has been increasingly emphasizing the importance of
advanced technology investment (research and development).
The United States years ago blocked China from participation in the International Space
Station program. China then began to develop a space station of its own and is already
offering access internationally. China just sent a satellite and rocket and lander and rover
to explore the far side of the moon. The intent late this year is to land again on the moon
and this time to retrieve samples of the crust and return them to earth. ]
Returning to earth, there is scarcely a day when the Chinese leadership does not call
attention to the severe poverty ending programs that will hopefully have set an economic
floor for Chinese through the entire country. That means infrastructure through the poorer
regions of the country or those regions that are considered economically viable with
assistance. As for pyramids, that means building houses and all that is necessary for housing
to be viable from roads and power and communications to schools and health care facilities
and investing in jobs.
Yes simply expanding payments to households will increase GDP
How much real how much just nominal is a good question
Tra Dr could go put of wack of course
But so what
China is a developing nation
Short run
Trade deficits are not a problem at full tilt domestic production
"Stocks have reached a permanently high plateau", "subprime is contained", "there's no
icebergs this far south" and now "The Fed's balance sheet is not the threat that people seem to
think it is."
Man's ability to willfully ignore 'downside possibilities' and remain cognitively dissonant
far longer than logic (or their pocketbook) should allow seems to know no bound and none other
than
The Federal Reserve's Bill Dudley just unleashed what could be the piece de resistance of
"nothing to see here, move along" agitprop.
Great Picture' Cowboying a Nuke while discussing confidence in the FED, quite appropo'
!
TRUTH @ 9:00; Plus this week, Friday will be Huge !
Should a seated President jail someone that attempted his Assassination, or a Former
President that planned to Nuke the Yellowstone Super Volcano Caldera, or someone that sold
email password to China and CC copied all 'to and from' messages including those highly
Confidential, or blame a former President for planning 911 False Flag attack, or expose
Planned Parenthoods first Amputating tongues for silently shipping in bulk, or expose
Democrat history of Decades of Projecting blame while committing War Crimes, or end 19 Year
War in Afghanistan ( Longest War ) then Syria against Last Night's Congressional Vote to keep
status quo, or 'take a knee' and quit being President !
"... By Steve Roth, publisher of Evonomics. He is a Seattle-based serial entrepreneur, and a student of economics and evolution. He blogs at Asymptosis, Angry Bear, and Seeking Alpha. Twitter: @asymptosis. Originally published at Evonomics ..."
"... And they're dead wrong that there's no difference between the two. Buybacks steal money not so much from corporate wages, but much more obviously and explicitly: from taxes that contribute to our common public purse. ..."
"... noblesse oblige ..."
"... Given the legal ability of corporate managers to use corporate funds to actively manipulate stock prices for their private benefit, how many of those corporate managers use their 'omniscience' to goose their private benefits and just how closely has the SEC been watching for insider trading? Martha Stewart learned her lesson in a show trial for our entertainment, but are we really supposed to believe she is the only person making use of inside knowledge to do a little private stock dealing? ..."
"... Our Society gives a special place to business enterprise on the theory that it benefits us all through innovation in products, their production, and distribution, and that business provides a livelihood for our people. Corporations receive disproportionate benefits protecting them from risk in their ventures. Stock buybacks and financial manipulations undermine the creative impetus [such as there were] that once drove corporate management, or more accurately they redirect that 'creative impetus' toward schemes for most efficiently looting what past managers built. ..."
The Real
Reason Stock Buybacks Are a Problem Posted on February 5,
2019 by Yves
Smith Yves here. Even though this article on stock buybacks by Steve Roth, cross posted
below after this lenghty introduction, makes an important central point, I believe it is
missing the forest for the trees. Roth acts as if stock buybacks are merely an alternative to
dividends (or investing or paying workers more). It's far worse than that. Since the crisis,
many companies have been borrowing to buy back stock. And why is that? Duh, because executives
have big time incentives to goose the stock price, and stock buybacks have become a socially
acceptable way to manipulate share prices.
We have from time to time published the work of William Lazonick, who has made a much more
comprehensive critique of stock buybacks, with considerable underlying data. It's great to see
his ideas finally going mainstream with the publication of an op-ed in the
New York Times by Chuck Schumer and Bernie Sanders (odd couples like that tell you the
tectonic plates are moving), and more important, their plan to introduce legislation to curb
buybacks. As they sketched out:
Our bill will prohibit a corporation from buying back its own stock unless it invests in
workers and communities first, including things like paying all workers at least $15 an hour,
providing seven days of paid sick leave, and offering decent pensions and more reliable
health benefits.
In other words, our legislation would set minimum requirements for corporate investment in
workers and the long-term strength of the company as a precondition for a
corporation entering into a share buyback plan. The goal is to curtail the overreliance on
buybacks while also incentivizing the productive investment of corporate capital.
As you'll see, this is actually a modest proposal, although forcing companies to take care
of workers before they engage in share price manipulation is an important reordering of
priorities.
By way of contrast, here is the key section of a 2018 post by Lazonick, who also gives
credit to the Congresscritters who have been dogging this abuse for some time:
For the Republican corporate tax cut to result in job creation, Congress must follow it up
with legislation to rein in these distributions to shareholders. There is a straightforward
and practical way to accomplish this objective: Congress should ban corporations from doing
stock buybacks, more formally known as open-market stock repurchases. As if more evidence
were needed, here are three reasons to expect that corporations will use the Republican tax
break to do stock buybacks.
First, the stock-based
compensation of senior executives incentivizes them to do distributions to shareholders.
Annual mean remuneration of CEOs of the same 475 companies listed on the S&P 500 from
2007 through 2016 ranged from $9.4 million in 2009, when the stock market was in the dumps,
to $20.1 million in 2015, when the stock market was booming. The vast majority of this total
remuneration, ranging from 53 percent in 2009 to 77 percent in 2015, was in the form of
realized gains from stock-based options and awards.
Second, for more than three decades, executives of major U.S. corporations have preached,
conveniently masking their self-interest, that the paramount responsibility of their
companies is to " create value " for shareholders.
Most recently, from 2007 through 2016, stock repurchases by 461 companies on listed on the
S&P 500 totaled $4 trillion, equal to 54 percent of profits. In addition, these companies
declared $2.9 trillion in dividends, which were 39 percent of profits. Indeed, top corporate
executives are often willing to incur debt, lay off employees, cut wages, sell assets, and
eat into cash reserves to "maximize shareholder value."
Third, in recent years hedge fund activists have ramped up the pressure on companies to do
buybacks. With their immense war chests of billions of dollars of assets under management,
these corporate
predators have used the proxy voting system, " wolfpack " collaboration
among hedge funds, and direct engagement with management, which was once illegal, to
participate in the looting of the U.S. business corporation.
Repurchases done on the open market, which constitute the vast majority of all buybacks,
are nothing but manipulation of the stock market. So why are companies allowed to do them?
Because of the 1980 election of Ronald Reagan as president on a platform of market
deregulation. In November 1982, after Reagan had appointed Wall Street banker John Shad as
chairman of the Securities and Exchange Commission (SEC), the agency adopted
Rule 10b-18 , which permits a company to do buybacks that can amount to hundreds of
millions of dollars per day, trading day after trading day, without fear of being charged
with stock-price manipulation. Rule 10b-18, which remains in force 35 years later, is a
license to loot the U.S. business corporation.
The argument for rescinding Rule 10b-18 is overwhelming. As research I've done with the
Institute for New Economic Thinking documents, buybacks wreak immense damage on households,
companies, and the economy. The profits that major corporations reinvest in productive
capabilities form the
foundation for a prosperous middle class. Buybacks deprive companies of that investment
capital, instead serving as a prime mode of making the richest households richer while
eroding middle-class employment opportunities.
Moreover, the justification for buybacks rests on the faulty
ideology that, for the sake of economic efficiency, companies should be run to "maximize
shareholder value." Agency theory, the academic thinking that underpins this ideology,
assumes that only
shareholders take the risk of investing in the productive capabilities of companies. In
fact, public shareholders do not as a rule provide financial capital to companies. They
simply buy and sell
outstanding shares. The true investors in productive capabilities are "households as
workers," whose skills and efforts generate the company's innovative products, and
"households as taxpayers," who devote a portion of their incomes to fund public investments
in infrastructure and knowledge that companies need to be competitive.
Finally, the insidious Rule 10b-18 that for more than three decades has encouraged massive
stock-market manipulation is just an ill-considered SEC regulation, adopted as part of Reagan
"voodoo economics." The justification for Rule 10b-18 has never been debated, nor have its
provisions been legislated, by Congress. That may, however, finally be changing. A number of
U.S. senators, including Elizabeth Warren (D-Mass.), Bernie Sanders (I-Vt.),
Brian Schatz (D-Hawaii),
and Cory Booker (D-N.J.),
have voiced criticisms of buybacks, as has former Vice President Joseph Biden
.
The most persistent challenge to this corrupt practice has come from Sen. Tammy Baldwin (D-Wis.), who in
2015 wrote
two highly critical letters to
former SEC Chairman Mary Jo White, and who has recently challenged the
prescription drug lobby group PhRMA to reconcile its claim that the pharmaceutical companies
need high drug prices to fund research and development with the fact that the major companies
spend virtually all their profits on buybacks and dividends.
It has hit the point where the biggest buyers of US stocks in aggregate are the companies
that once issued them. This is not how a well functioning economy operates.
By Steve Roth, publisher of Evonomics. He is a Seattle-based serial entrepreneur, and a
student of economics and evolution. He blogs at Asymptosis, Angry Bear, and Seeking Alpha.
Twitter: @asymptosis. Originally published at Evonomics
Bernie Sanders and Chuck Schumer's New York Times op-ed, " Limit Corporate
Stock Buybacks ," has thrown internet gasoline on the buyback debate. The left is waving
the flag, and the right is trying to tear it down.
The core Sanders/Schumer argument: buybacks extract money from firms, money that could be
used to pay workers more, and fund productive investment (including worker training and
upskilling).
The counterargument: how are buybacks any different from dividend distributions that way?
Both transfer cash from firms to households. We don't hear people complaining about dividend
distributions stealing money from workers and investment.
That counterargument is absolutely right, even while it's completely wrong. Because both
sides miss the overwhelming effect of stock buybacks (vs dividends). Buybacks are a massive tax
dodge for shareholders.
Imagine Megacorp wants to transfer a billion dollars to its shareholders (notably including
the huge shareholders in its C suite and on its corporate board). Whether they distribute
dividends or buy back shares, either way Megacorp has a billion dollars less on its balance
sheet. Its book value drops by $1B.
But what happens on the household, shareholder side? With a dividend distribution it's
simple; households get $1B in taxable dividend income. With a buyback, households that sell
shares also receive $1B in cash, but they give up their shares, which obviously have value.
That's where the (perfectly legal) tax avoidance lies -- perhaps best explained by
example:
Suppose the average shareholder's shares were purchased for $20 each. That's the
shareholders' tax basis. If Megacorp pays $25 a share (for 40M shares), the shareholders who
sell have cap gains of $5 a share -- $200M in taxable income -- versus $1B if the same cash is
paid out via dividends.
Dividends and long-term cap gains in the U.S. are currently taxed using the same rates and
brackets: 15% if your income is above $38K, 20% if it's above $425K. If Megacorp chooses a $1B
stock buyback, our imagined shareholders pay $40M in taxes (at the 20% rate), versus $200M in
taxes on a dividend distribution.
Neither of these has any effect on corporate taxes, by the way. C-corporation profits (as
opposed to S corporations and other "pass-throughs") are taxed at the corporate level, whether
they get distributed or not, and no matter which distribution method is used.
There are other important problems with buybacks, mainly having to do with boards' and C
suites' greater discretion over the timing and amounts of buybacks, and the potential for
self-dealing price manipulation. (Contra Schumer and Sanders' odd bank-shot approach to this problem,
we could just repeal Rule 10B-18 .)
But the right is right: Buybacks are no more pernicious than dividends in "stealing money"
from firms, that could otherwise be used for worker pay and productive investment.
And they're dead wrong that there's no difference between the two. Buybacks steal money
not so much from corporate wages, but much more obviously and explicitly: from taxes that
contribute to our common public purse.
There is another consideration – back when marginal taxes at the highest bracket
were much higher, one of the limits of executive compensation was the fact that even if they
engaged in such behvaiour, most of this would be taxed away.
1. A straight up ban on stock buybacks, as they seem to be mainly an instrument for
maximizing executive compensation by boosting EPS and share price, which are common metrics
used to pay executives. They also result in debt from buybacks and less capital for actually
meaningful investments.
2. The "Carried Interest" loophole should be immediately eliminated. This will also
discourage "vulture private equity" as well, a social drain on society.
3. Taxes should be steeply progressive. This is to act as a deterrence against rent
seeking. Perhaps the standard deduction could be increased even for ordinary working class
citizens. Capital gains should be taxed at a comparable rate to labour or even higher (as the
top 10% control 85% of stocks anyways).
4. A special high net worth enforcement unit should be set up in tax collection agencies
around the world. This is to identify and catch high net worth individuals who engage in tax
evasion and possibly aggressive tax planning as well.
5. Tax incentives should encourage corporations to invest in things that are actually
productive, such as R&D, capital expenditures, and employee training. One key issue is
that company executives know that share buybacks are the easiest way to maximize executive
compensation and that they will often only be there for a few years. Competing through a
superior product/service, developing R&D, good corporate culture, etc, is "hard" for
executives and may not lead to a return. Plus it is often short term pain, long term
gain.
6. Corporate governance clearly needs reform and I think that we may need something far
more independent on boards than what is currently there. Often executives have a bias towards
voting for high compensation knowing that they will someday face similar boards. They also
tend to support management or be appointed to be "yes people" as opposed to be
independent.
The biggest issue though is that our society's rich have no sense of noblesse
oblige anymore. Their goal is to maximize their own compensation at society's expense.
Tools like shareholder buybacks and private equity are just a cover for those objectives.
If we want to get fussed over taxes and tax evasion, domestic stock buybacks, capital
gains taxes, and dividend taxes seem like small potatoes compared to the games international
corporations play to realize their profits in countries that don't tax them.
I fail to see the monstrous tax dodge because the analysis fails to consider the integral
of tax payments over the life of the stock.
Whomever sold the current shareholders their stock at $20 must have paid capital gains on
that sale , unless it IPO'd at 20.
So there are effectively two cases. The first is that it IPO'd at 20. In this case, the
shareholders put in the first 800M, and it doesn't seem unfair to tax them only on the
additional 200M the company made.
The second is that it IPO'd at zero. Then the total amount of capital gains tax as it
changed hands up to $20 (where current shareholders bought it) is on $800M. So again, taxing
only $200M doesn't seem unfair.
For ipo prices between 0 and 20 you just have a combination of the two arguments.
One might conclude that the dividend tax double-taxes early share gains.
Why capital gains tax should be less than income tax makes no sense or obvious fairness.
You might want to argue that dividend double-taxation isn't such a bad thing and effectively
compensates for a low capital gains rate.
But the buyback isn't per se a tax dodge any more than the capital gains tax in the first
place. And it would probably be conceptually cleaner just to raise the capital gains
rate.
I didn't address this, and should have. He really is making a mountain out of a
molehill.
Only about 1/4 of US stocks are held by taxable investors (the households he mentions).
Retirement accounts including public and private pension funds, foundations, endowments, and
foreign investors are all tax exempt. So any of them could have been the seller to the
taxable household back in the day.
You could argue that dividends get taxed at current rate, whereas capital gains from
selling shares taxes at the rate at the time of the sale. Ergo, shareholders can wait for a
decrease in capital gains taxes to sell and functionally dodge the taxes they would have paid
if they received a dividend. However, it's still a weak argument as the capital gains rate
could easily go up, and/or the value of the stock itself could fall for some other, unrelated
reason. Yves' and Lazonick's critiques are much more relevant.
It's laudable and important to force companies to properly compensate workers before
initiating stock buybacks. This won't solve he problem of using funds for buybacks instead of
capital investments, R&D etc. To accomplish that we also need to un-Bork anti-trust law
and actually have companies that are honestly competing with each other.
To what extent have stock buybacks enabled corporate managers to leverage income streams
in the corporations they 'manage' to increase corporate debt through bond issues? What
happens to a corporation when it's revenue streams are impacted by ups-and-downs of the
economy? Hasn't Professor Hudson gone on at length describing the instability such debt
creates for a business? Dividends can move up-and-down with revenue streams, but bonds must
be paid or there is a corporate cash flow problem. For a small business that means bankruptcy
while for large corporate players I think that means takeover and merger further
consolidating our monopoly and monopsony bloated Corporations. After all these years of stock
buybacks and consolidation how much cash flow remains to leverage?
Given the legal ability of corporate managers to use corporate funds to actively
manipulate stock prices for their private benefit, how many of those corporate managers use
their 'omniscience' to goose their private benefits and just how closely has the SEC been
watching for insider trading? Martha Stewart learned her lesson in a show trial for our
entertainment, but are we really supposed to believe she is the only person making use of
inside knowledge to do a little private stock dealing?
Worry about stock buybacks now? Too little and I fear much too late. How many of our great
corporations are little more than Potemkin fronts for hollowed out shells of debt feeding a
massive transfer of the wealth our country built over many generations into the hands of the
obscenely wealthy?
Our Society gives a special place to business enterprise on the theory that it
benefits us all through innovation in products, their production, and distribution, and that
business provides a livelihood for our people. Corporations receive disproportionate benefits
protecting them from risk in their ventures. Stock buybacks and financial manipulations
undermine the creative impetus [such as there were] that once drove corporate management, or
more accurately they redirect that 'creative impetus' toward schemes for most efficiently
looting what past managers built.
The bottom line is that this preoccupation with the 'headline number' for the current month
as a single datapoint that is promoted by Wall Street and the Government for official economic
data is misleading.
The effective method of considering a heavily adjusted and revised data series like this is
with a trend analysis of at least seven to twelve observations, and more if you can get
them.
But, that makes for a much less interesting and convenient narrative.
And as for the median wage and income -- it is still too weak to sustain an economic
recovery.
Stocks were a bit weak today, despite all this fabulous economic data, having exhausted the
sugar rush that was spoonfed to them by their friendly neighborhood Federal Reserve.
Follows the excerpt from his latest Gartman letter.
We remain positive of equities because of what we have said time and time again each
morning for the past several weeks and which needs to be re-said here this morning yet again
for nothing has changed: the Fed has indeed "changed" its monetary policies and this change
was made clear by Mr. Powell's comments of now more than a month ago and made clearer midweek
last week following the FOMC meeting .
Looks like pendulum moved in opposite direction and neoliberals (and first of all financial
oligarchy) might be crashed by the return of the New Deal style regulations as well as higher
taxes on incomes. the latter measure is popular even in the USA.
Notable quotes:
"... By Don Quijones of Spain, Mexico, and the UK, and an editor at Wolf Street. Originally published at Wolf Street ..."
"... The bill will face stiff opposition from the domestic banking sector as well as the European Commission, which in 2017, under pressure from Europe's banking lobbies, abandoned its own pledge to break-up too-big-to-fail lenders. ..."
"... Since the global financial crisis, big banks on both sides of the Atlantic have been fighting tooth and nail all regulatory attempts to split their deposit-taking commercial units from their riskier investment banking units. ..."
By Don Quijones of Spain, Mexico, and the UK, and an editor
at Wolf Street. Originally published at
Wolf Street
On Friday, Italy's coalition government
unveiled new banking regulations that it hopes to pass in the coming months, including a
rule that would separate banks' commercial and investment arms. It would be the Italian
equivalent of the Glass-Steagall Act, the 1933 U.S. law that separated commercial banks that
took deposits, made loans, and processed transaction, from riskier investment banking
activities. The law was designed to protect deposits. Its repeal in 1999 led to the
consolidation of the U.S. banking sector, unfettered risk-taking by deposit-taking banks, and
arguably the Financial Crisis just eight years later.
... ... ...
The bill will face stiff opposition from the domestic banking sector as
well as the European Commission, which in 2017, under pressure from Europe's banking lobbies,
abandoned its own pledge to break-up too-big-to-fail lenders.
Since the global financial crisis, big banks on both sides of the Atlantic have been
fighting tooth and nail all regulatory attempts to split their deposit-taking commercial units
from their riskier investment banking units. Such legislation would would make each entity
smaller. And that is not in the interests of the big banks, nor the ECB, which
hopes to breathe life into a new generation of trans-European super-banks by serving as
matchmaker to Europe's largest domestic lenders.
Is anyone else tired of the longest, least productive waste of war in American history ? What
have we achieved, where are we going with this ? More war.
We are being fed a fairy tale of war about what men, long dead, did. And the reason they did
it. America is being strangled by the burden of belief that now is like then.
By the patrician men and women administrators, posturing as soldiers like the WW2 army, lie
for self profit. Why does anyone believe them ? Korea, Vietnam, Iraq, each an economic
decision, rather than a security issue.
Capitalists need their options regulated and their markets ripped from their control by the
state. Profits must be subject to use it to a social purpose or heavily taxed. Dividends
executive comp and interest payments included
Well done! Much clearer than your usual. There are several distinct motivations for taxes. We
have been far enough from fairness to workers, for so long, that we need to use the tax
system to redistribute the accumulated wealth of the plutocrats.
So I would say high marginal rates are a priority, which matches both objectives. Wealth
tax is needed until we reverse the massive inequality supported by the policies of the last
40 years.
Carbon tax and the like are a different thing, use of the tax code to promote a particular
policy and reduce damage to the commons.
"...we need to use the tax system to redistribute the accumulated wealth of the plutocrats.
So I would say high marginal rates are a priority..."
Forgive me, but high marginal rates (which I hugely favor) don't "redistribute the
accumulated wealth" of the plutocrats. If such high marginal rates are ever enacted, they'll
apply only to the current income of such plutocrats.
You merged paragraphs, and elided the next one. The way I see it, high rates are a
prerequisite to prevent the reaccumulation of obscene wealth, and its diversion into
financial gambling.
But yes that would be a very slow way to redistribute what has already accumulated.
Didn't mean to misinterpret what you were saying, sorry. High rates are not only "a
prerequisite to prevent the reaccumulation of obscene wealth," they are also a reimposition
of fair taxation on current income (if it ever happens, of course).
Wealth tax is needed until we reverse the massive inequality supported by the policies of the
last 40 years. Carbon tax and the like are a different thing, use of the tax code to promote
a particular policy and reduce damage to the commons.
"
more wisdom as usual!
Although wealth tax will be unlikely, it could be a stopgap; could also be a guideline to
other taxes as well. for example, Elizabeth points out that billionaires pay about 3% of
their net worth into their annual tax bill whereas workers pay about 7% of their net worth
into their annual tax bill. Do you see how that works?
it doesn't? this Warren argument gives us a guideline. it shows us where other taxes
should be adjusted to even out this percentage of net worth that people are taxed for. Ceu,
during the last meltdown 10 years or so ago, We were collecting more tax from the payroll
than we were from the income tax. this phenomenon was a heavy burden on those of low net
worth. All this needs be resorted. we've got to sort this out.
and the carbon tax? may never be; but it indicates to us what needs to be done to make
this country more efficient. for example some folks, are spending half a million dollars on
the Maybach automobile, about the same amount on a Ferrari or a Alfa Romeo Julia
quadrifoglio, but the roads are built for a mere 40 miles an hour, full of potholes.
What good is it to own a fast car like that when you can't drive but 40 -- 50 miles an
hour? and full of traffic jams. something is wrong with taxation incentives. we need to get a
better grid-work of roads that will get people there faster.
Meanwhile most of those sports cars just sitting in the garage. we need a comprehensive
integrated grid-work of one way streets, roads, highways, and interstates with no traffic
lights, no stop signs; merely freeflow ramp-off overpass interchanges.
Jesus Christ said, in so many words, that a man's worth will be judged by his generosity and
his avarice.
" 24And the disciples were amazed at His words. But Jesus said to them again, "Children,
how hard it is to enter the kingdom of God! 25It is easier for a camel to pass through the
eye of a needle than for a rich man to enter the kingdom of God." 26They were even more
astonished and said to one another, "Who then can be saved?"
If you are dealing with Goldman Sachs that last thing is to expect moral behaviour from them. They are financial
preduitors and generally dealing with them for smaller clients is a very dangerous undertaking, if you ask me.
Notable quotes:
"... Three months ago, when the loan market was freezing up, Goldman struck an unusual deal with a group of hedge funds to offload a buyout loan from its books, saving the bank and the funds from potential losses. What was odd, is that Goldman was also serving as the underwriter to the company issuing the loans...while at the same time arrenging a "kicker" to loan buyers by having them bet on the potential insolvency of its own client. ..."
"... Now, this bizarre arrangement is at the center of a lawsuit accusing the Wall Street giant of gorging on fees while also exposing the acquirer in the buyout, United Natural Foods, to hedge-fund sharks who stand to reap major profits if the company collapses as a result of the incremental debt: according to Bloomberg , United Natural had hired Goldman Sachs for the takeover and is now demanding at least $52 million - and potentially much more - from the bank. ..."
"... "I have never experienced this kind of egregious and immoral behavior from a bank in my entire life," United Natural Chief Executive Officer Steve Spinner told Bloomberg in an interview after his company filed the suit Wednesday in a state court in New York. Goldman, which until that moment had been retained by United Natural , vowed to vigorously fight the case, calling it "entirely without merit." ..."
"... Indeed, as Bloomberg notes, " again and again, the contracts have played strange roles in debt transactions, sometimes straining allies or encouraging unlikely alliances. " ..."
"... According to the lawsuit, Goldman adjusted the terms on a $2 billion financing deal in a way that allowed hedge funds to reap a windfall from their CDS bets, as first reported by Bloomberg in October . United Natural said it initially heeded Goldman's advice, agreeing to the changes so it could complete the takeover of grocery chain Supervalu. ..."
"... Where things got complicated, is that Goldman enlisted the help of hedge funds that had been betting on Supervalu's demise. Those funds now stand to benefit if United Natural struggles to repay. That was just the beginning: United Natural also alleges that the bank unfairly withheld fees, burdened it with additional interest expenses and relied on "scare tactics" by a senior banker to back it into a corner ..."
"I Have Never Experienced This Kind Of Immoral Behavior From A Bank In My Entire Life":
Goldman Slammed In Latest CDS Scandal
Not a month seems to pass any more without a major bank or hedge fund getting in hot water
for using CDS in a way that was never intended, and now it's Goldman's turn, again.
Three months ago, when the loan market was
freezing up, Goldman struck an unusual deal with a group of hedge funds to offload a buyout
loan from its books, saving the bank and the funds from potential losses. What was odd, is that
Goldman was also serving as the underwriter to the company issuing the loans...while at the
same time arrenging a "kicker" to loan buyers by having them bet on the potential insolvency of
its own client.
Now, this bizarre arrangement is at the center of a lawsuit accusing the Wall Street giant
of gorging on fees while also exposing the acquirer in the buyout, United Natural Foods, to
hedge-fund sharks who stand to reap major profits if the company collapses as a result of the
incremental debt:
according to Bloomberg , United Natural had hired Goldman Sachs for the takeover and is now
demanding at least $52 million - and potentially much more - from the bank.
Worse, the distributor of natural and organic foods, specialty foods is absolutely furious
at the bank that until recently was its strategic advisor:
"I have never experienced this kind of egregious and immoral behavior from a bank in my
entire life," United Natural Chief Executive Officer Steve Spinner told Bloomberg in an
interview after his company filed the suit Wednesday in a state court in New York. Goldman,
which until that moment had been retained by United Natural , vowed to vigorously fight the
case, calling it "entirely without merit."
As hinted above, Wall Street's latest drama once again revolves around the increasingly
dysfunctional credit-default swaps market, where hedge funds and others wager on the ability of
companies to keep up with their borrowings, only the traditional role of CDS as bankruptcy
hedges has long ago given way to more "creative" applications. Indeed, as Bloomberg notes, "
again and again, the contracts have played strange roles in debt transactions, sometimes
straining allies or encouraging unlikely alliances. "
According to the lawsuit, Goldman adjusted the terms on a $2 billion financing deal in a way
that allowed hedge funds to reap a windfall from their CDS bets, as first
reported by Bloomberg in October . United Natural said it initially heeded Goldman's
advice, agreeing to the changes so it could complete the takeover of grocery chain
Supervalu.
Where things got complicated, is that Goldman enlisted the help of hedge funds that had been
betting on Supervalu's demise. Those funds now stand to benefit if United Natural struggles to
repay. That was just the beginning: United Natural also alleges that the bank unfairly withheld
fees, burdened it with additional interest expenses and relied on "scare tactics" by a senior
banker to back it into a corner.
In the beginning it was nothing but rainbows and roses: United Natural, which is a supplier
to Whole Foods, announced the $2.9 billion Supervalu acquisition in July, and with the market
soaring and credit and loan spreads near all time tights, not a cloud appeared on the horizon.
And, as so often happens, the company announced that Goldman Sachs would act as lead
underwriter to sell the billions in debt needed to fund the deal. But just a few months later,
as equities first tumbled and shortly thereafter credit markets - especially in the leveraged
loan market - froze up, the investment bank faced the prospect of being saddled with millions
in losses unless it found a way to offload the loan from its books.
Meanwhile, hedge funds were facing major losses too after having bet against Supervalu's
debt by loading up on CDS, but the company's sale threatened to create a situation known as an
orphaned CDS contract, a situation similar to the infamous McClatchy fiasco (one which we
profiled extensively in "
Orphan CDS, Manufactured Credit Events, Insufficient Deliverables: What The Hell Is Going On In
The CDS Market ?"). Because new debt being issued to purchase Supervalu would have paid
down the grocer's obligations, it could have made swaps linked to Supervalu effectively
worthless - referencing an entity with no significant borrowings - even as the default risk of
the purchaser, United Natural, soared. However, due to the specific nature of the CDS contract,
there was no continuity in tracking the referenced entity, as such those who were betting on a
Supervalu default would end up with nothing, even if the successor company did eventually file
for bankruptcy.
It is here that Goldman had an "epiphany", one which would kill two birds with one
stone.
The key was to restore the value of the roughly $470 million of net CDS wagers linked to
Supervalu's debt. While the cost of the Supervalu derivatives had plunged through most of last
year, by tweaking the loan docs to make Supervalu a co-borrower on the new financing, Goldman
sparked a surge in the value of the swaps.
That, along with several other concessions, not only rescued hedge funds from getting wiped
out on their SVU CDS, but more importantly, helped Goldman fill its order book for the loan and
eliminate its exposure risk.
And while Goldman was the clear winner here, helping a couple of millionaire credit PMs
avoid major losses for 2018 while avoiding taking a loss on its buyout loan exposure, United
Natural claims that Goldman left it exposed to a group of lenders whose interests are at odds
with its own and who are motivated to create roadblocks aimed at forcing a default so that they
can notch further gains in the CDS market.
That may be difficult to prove, especially since Goldman can claim that without the contract
fudge, the deal may never have been funded. Still, United Natural alleges that it never
received a final list of funds participating in the loans and, had it known, would've raised
concerns, even though without making the concessions to hedge funds, Goldman would have
struggled to place the deal.
United Natural meanwhile claims that it went along with the changes after warnings from
Stephan Feldgoise, who helps oversee Goldman's mergers business in the Americas. The bank
allegedly warned that if the company didn't adjust the terms, it might "scare off" investors,
trigger "blowback" from its own shareholders and "things would get ugly."
What Goldman apparently did not explain is that the one entity most on the hook - in terms
of both P&L and reputation - was Goldman. Which is why Feldgoise and Bank of America, to
co-lead arranger on the loan, are also named as defendants.
As Bloomberg concludes, it's another twist in Feldgoise's time at Goldman Sachs, which
ironically, included a stint as chairman of the firm's global fairness committee. Curiously, in
mid-2017, division chiefs announced he would be departing the bank, stepping down from his post
in senior management to become an advisory director. Yet he's still at the bank, now in a
heated battle with a client for whom he's handled various deals. That said, with the millions
in fees from the United Natural-Supervalu deal, at least Feldgoise's tenure at Goldman is
secure. Worst case, he can always get a job at one of the many hedge funds that made a killing
on SVU CDS thanks to the Goldman fudge.
"I have never experienced this kind of egregious and immoral behavior from a bank in my
entire life," United Natural Chief Executive Officer Steve Spinner
Well, Steve, perhaps you should have been paying more attention for the last 11 years.
Financial industry has inherent trend toward parasitism and gangsterism and as such should be
as tightly regulated as gambling. Probably even more. But under neoliberalism where financial
oligarchy a the ruling class this is a pipe dream. I do not see any significant countervailing
force other the far right nationalism. Far right nationalism has power to brake bankers spine,
but usually they allied with them (fascism)
Those that have been following events for several years know they are under attack by an
enemy that has no face and means to do them great harm. Nothing less than their sovereignty and
freedom is at stake.
Absolute control over people and resources is the ultimate goal.
...the bankers want to show up after the population has lost everything in a collapse,
to be their savior and gain control of everyone by offering resources in exchange for
compliance.
In the end these bankers are just people . They yield NO power other than a
cheap magi c trick called money. They are simply losers pulling levers behind the curtain .
They are terrified of real people. They are terrified of being exposed. They are worthless
conjurers of useless paper. Their power is a cheap spell. They always have known that once
people are aware of the trick, they are done. They are afraid of elevated souls. They are
afraid of the awakened. They are terrified of the big red pill that is coming for the masses. Game over.
"... 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 French economist Thomas Piketty argued last year in a surprising best-seller, "Capital in
the Twenty-First Century," that rising wealth inequality was a natural result of free-market policies,
a direct challenge to the conventional view that economic inequalities shrink over time. The controversial
implication drawn by Mr. Piketty is that governments should raise taxes on the wealthy.
Notable quotes:
"... His speeches can blend biblical fury with apocalyptic doom. Pope Francis does not just criticize the excesses of global capitalism. He compares them to the "dung of the devil." He does not simply argue that systemic "greed for money" is a bad thing. He calls it a "subtle dictatorship" that "condemns and enslaves men and women." ..."
"... The Argentine pope seemed to be asking for a social revolution. "This is not theology as usual; this is him shouting from the mountaintop," said Stephen F. Schneck, the director of the Institute for Policy Research and Catholic studies at Catholic University of America in Washington. ..."
"... Left-wing populism is surging in countries immersed in economic turmoil, such as Spain, and, most notably, Greece . But even in the United States, where the economy has rebounded, widespread concern about inequality and corporate power are propelling the rise of liberals like Senator Bernie Sanders of Vermont and Senator Elizabeth Warren of Massachusetts, who, in turn, have pushed the Democratic Party presidential front-runner, Hillary Rodham Clinton, to the left. ..."
"... Even some free-market champions are now reassessing the shortcomings of unfettered capitalism. George Soros, who made billions in the markets, and then spent a good part of it promoting the spread of free markets in Eastern Europe, now argues that the pendulum has swung too far the other way. ..."
"... Many Catholic scholars would argue that Francis is merely continuing a line of Catholic social teaching that has existed for more than a century and was embraced even by his two conservative predecessors, John Paul II and Benedict XVI. Pope Leo XIII first called for economic justice on behalf of workers in 1891, with his encyclical "Rerum Novarum" - or, "On Condition of Labor." ..."
"... Francis has such a strong sense of urgency "because he has been on the front lines with real people, not just numbers and abstract ideas," Mr. Schneck said. "That real-life experience of working with the most marginalized in Argentina has been the source of his inspiration as pontiff." ..."
"... In Bolivia, Francis praised cooperatives and other localized organizations that he said provide productive economies for the poor. "How different this is than the situation that results when those left behind by the formal market are exploited like slaves!" he said on Wednesday night. ..."
"... It is this Old Testament-like rhetoric that some finding jarring, perhaps especially so in the United States, where Francis will visit in September. His environmental encyclical, "Laudato Si'," released last month, drew loud criticism from some American conservatives and from others who found his language deeply pessimistic. His right-leaning critics also argued that he was overreaching and straying dangerously beyond religion - while condemning capitalism with too broad a brush. ..."
"... The French economist Thomas Piketty argued last year in a surprising best-seller, "Capital in the Twenty-First Century," that rising wealth inequality was a natural result of free-market policies, a direct challenge to the conventional view that economic inequalities shrink over time. The controversial implication drawn by Mr. Piketty is that governments should raise taxes on the wealthy. ..."
"... "Working for a just distribution of the fruits of the earth and human labor is not mere philanthropy," he said on Wednesday. "It is a moral obligation. For Christians, the responsibility is even greater: It is a commandment." ..."
"... "I'm a believer in capitalism but it comes in as many flavors as pie, and we have a choice about the kind of capitalist system that we have," said Mr. Hanauer, now an outspoken proponent of redistributive government ..."
"... "What can be done by those students, those young people, those activists, those missionaries who come to my neighborhood with the hearts full of hopes and dreams but without any real solution for my problems?" he asked. "A lot! They can do a lot. ..."
ASUNCIÓN, Paraguay - His speeches can blend biblical fury with apocalyptic doom. Pope Francis
does not just criticize the excesses of global capitalism. He compares them to the "dung of the devil."
He does not simply argue that systemic "greed for money" is a bad thing. He calls it a "subtle dictatorship"
that "condemns and enslaves men and women."
Having returned to his native Latin America, Francis has renewed his left-leaning critiques on
the inequalities of capitalism, describing it as an underlying cause of global injustice, and a prime
cause of climate change. Francis escalated that line last week when he made a
historic apology for the crimes of the Roman Catholic Church during the period of Spanish colonialism
- even as he called for a global movement against a "new colonialism" rooted in an inequitable economic
order.
The Argentine pope seemed to be asking for a social revolution. "This is not theology as usual; this is him shouting from the mountaintop," said Stephen F. Schneck,
the director of the Institute for Policy Research and Catholic studies at Catholic University of
America in Washington.
The last pope who so boldly placed himself at the center of the global moment was John Paul II,
who during the 1980s pushed the church to confront what many saw as the challenge of that era, communism.
John Paul II's anti-Communist messaging dovetailed with the agenda of political conservatives eager
for a tougher line against the Soviets and, in turn, aligned part of the church hierarchy with the
political right.
Francis has defined the economic challenge of this era as the failure of global capitalism to
create fairness, equity and dignified livelihoods for the poor - a social and religious agenda that
coincides with a resurgence of the leftist thinking marginalized in the days of John Paul II. Francis'
increasingly sharp critique comes as much of humanity has never been so wealthy or well fed - yet
rising inequality and repeated financial crises have unsettled voters, policy makers and economists.
Left-wing populism is surging in countries immersed in economic turmoil, such as Spain, and,
most notably, Greece. But even in the United States, where the economy has rebounded, widespread
concern about inequality and corporate power are propelling the
rise of liberals like Senator Bernie Sanders of Vermont and Senator Elizabeth Warren of Massachusetts,
who, in turn, have pushed the Democratic Party presidential front-runner, Hillary Rodham Clinton,
to the left.
Even some free-market champions are now reassessing the shortcomings of unfettered capitalism.
George Soros, who made billions in the markets, and then spent a good part of it promoting the spread
of free markets in Eastern Europe, now argues that the pendulum has swung too far the other way.
"I think the pope is singing to the music that's already in the air," said Robert A. Johnson,
executive director of the Institute for New Economic Thinking, which was financed with $50 million
from Mr. Soros. "And that's a good thing. That's what artists do, and I think the pope is sensitive
to the lack of legitimacy of the system."
Many Catholic scholars would argue that Francis is merely continuing a line of Catholic social
teaching that has existed for more than a century and was embraced even by his two conservative predecessors,
John Paul II and Benedict XVI. Pope Leo XIII first called for economic justice on behalf of workers
in 1891, with his encyclical "Rerum Novarum" - or, "On Condition of Labor."
Mr. Schneck, of Catholic University, said it was as if Francis were saying, "We've been talking
about these things for more than one hundred years, and nobody is listening."
Francis has such a strong sense of urgency "because he has been on the front lines with real people,
not just numbers and abstract ideas," Mr. Schneck said. "That real-life experience of working with
the most marginalized in Argentina has been the source of his inspiration as pontiff."
Francis made his speech on Wednesday night, in Santa Cruz, Bolivia, before nearly 2,000 social
advocates, farmers, trash workers and neighborhood activists. Even as he meets regularly with heads
of state, Francis has often said that change must come from the grass roots, whether from poor people
or the community organizers who work with them. To Francis, the poor have earned knowledge that is
useful and redeeming, even as a "throwaway culture" tosses them aside. He sees them as being at the
front edge of economic and environmental crises around the world.
In Bolivia, Francis praised cooperatives and other localized organizations that he said provide
productive economies for the poor. "How different this is than the situation that results when those
left behind by the formal market are exploited like slaves!" he said on Wednesday night.
It is this Old Testament-like rhetoric that some finding jarring, perhaps especially so in the
United States, where Francis will visit in September. His environmental encyclical, "Laudato Si',"
released last month, drew loud criticism from some American conservatives and from others who found
his language deeply pessimistic. His right-leaning critics also argued that he was overreaching and
straying dangerously beyond religion - while condemning capitalism with too broad a brush.
"I wish Francis would focus on positives, on how a free-market economy guided by an ethical framework,
and the rule of law, can be a part of the solution for the poor - rather than just jumping from the
reality of people's misery to the analysis that a market economy is the problem," said the Rev. Robert
A. Sirico, president of the Acton Institute for the Study of Religion and Liberty, which advocates
free-market economics.
Francis' sharpest critics have accused him of being a Marxist or a Latin American Communist, even
as he opposed communism during his time in Argentina. His tour last week of Latin America began in
Ecuador and Bolivia, two countries with far-left governments. President Evo Morales of Bolivia, who
wore a Che Guevara patch on his jacket during Francis' speech, claimed the pope as a kindred spirit
- even as Francis seemed startled and caught off guard when Mr. Morales gave him a wooden crucifix
shaped like a hammer and sickle as a gift.
Francis' primary agenda last week was to begin renewing Catholicism in Latin America and reposition
it as the church of the poor. His apology for the church's complicity in the colonialist era received
an immediate roar from the crowd. In various parts of Latin America, the association between the
church and economic power elites remains intact. In Chile, a socially conservative country, some
members of the country's corporate elite are also members of Opus Dei, the traditionalist Catholic
organization founded in Spain in 1928.
Inevitably, Francis' critique can be read as a broadside against Pax Americana, the period of
capitalism regulated by global institutions created largely by the United States. But even pillars
of that system are shifting. The World Bank, which long promoted economic growth as an end in itself,
is now increasingly focused on the distribution of gains, after the Arab Spring revolts in some countries
that the bank had held up as models. The latest generation of international trade agreements includes
efforts to increase protections for workers and the environment.
The French economist Thomas Piketty argued last year in a surprising best-seller, "Capital
in the Twenty-First Century," that rising wealth inequality was a natural result of free-market policies,
a direct challenge to the conventional view that economic inequalities shrink over time. The controversial
implication drawn by Mr. Piketty is that governments should raise taxes on the wealthy.
Mr. Piketty roiled the debate among mainstream economists, yet Francis' critique is more unnerving
to some because he is not reframing inequality and poverty around a new economic theory but instead
defining it in moral terms. "Working for a just distribution of the fruits of the earth and human
labor is not mere philanthropy," he said on Wednesday. "It is a moral obligation. For Christians,
the responsibility is even greater: It is a commandment."
Nick Hanauer, a Seattle venture capitalist, said that he saw Francis as making a nuanced point
about capitalism, embodied by his coinage of a "social mortgage" on accumulated wealth - a debt to
the society that made its accumulation possible. Mr. Hanauer said that economic elites should embrace
the need for reforms both for moral and pragmatic reasons. "I'm a believer in capitalism but
it comes in as many flavors as pie, and we have a choice about the kind of capitalist system that
we have," said Mr. Hanauer, now an outspoken proponent of redistributive government policies
like a higher minimum wage.
Yet what remains unclear is whether Francis has a clear vision for a systemic alternative to the
status quo that he and others criticize. "All these critiques point toward the incoherence of the
simple idea of free market economics, but they don't prescribe a remedy," said Mr. Johnson, of the
Institute for New Economic Thinking.
Francis acknowledged as much, conceding on Wednesday that he had no new "recipe" to quickly change
the world. Instead, he spoke about a "process of change" undertaken at the grass-roots level.
"What can be done by those students, those young people, those activists, those missionaries
who come to my neighborhood with the hearts full of hopes and dreams but without any real solution
for my problems?" he asked. "A lot! They can do a lot. "You, the lowly, the exploited, the poor
and underprivileged, can do, and are doing, a lot. I would even say that the future of humanity is
in great measure in your own hands."
Religion is definitely a useful tool fight neoliberalism. Actually outside of far right and religious
fundamentalists almost any tool that is useful for fighting neoliberalism should be viewed positively.
Currently Catholicism opposes neoliberalism more actively and probably somewhat more successfully due
to the statute of Pope Francis then Orthodox Church.
Notable quotes:
"... The conflict between Russia and the West, therefore, is portrayed by both the ROC and by Vladimir Putin and his cohorts as nothing less than a spiritual/civilizational conflict. ..."
Amidst the geopolitical confrontation between Vladimir Putin's Russia and the US and its allies,
little attention has been paid to the role played by religion either as a shaper of Russian domestic
politics or as a means of understanding Putin's international actions. The role of religion has long
tended to get short thrift in the study of statecraft (although it has been experiencing a bit of
a renaissance of late), yet nowhere has it played a more prominent role – and perhaps nowhere has
its importance been more unrecognized – than in its role in supporting the Russian state and Russia's
current place in world affairs.
And while much attention has been paid to the growing authoritarianism of the Kremlin and on the
support for Putin's regime on the part of the Russian oligarchs whom Putin has enriched through his
crony capitalism, little has been paid to the equally critical role of the Russian Orthodox Church
in helping to shape Russia's current system, and in supporting Putin's regime and publicly conflating
the mission of the Russian state under Vladimir Putin's leadership with the mission of the Church.
Putin's move in close coordination with the Russian Orthodox Church to sacralize the Russian national
identity has been a key factor shaping the increasingly authoritarian bent of the Russian government
under Putin, and strengthening his public support, and must be understood in order to understand
Russia's international behavior.
The close relationship between the Russian Orthodox Church (ROC) and the Russian state based upon
a shared, theologically-informed vision of Russian exceptionalism is not a new phenomenon. During
the days of the Czar, the Russian ruler was seen as God's chosen ruler of a Russian nation tasked
with representing a unique set of value embodied by Russian Orthodoxy, and was revered as "the Holy
Orthodox Czar". Today, a not dissimilar vision of Russian exceptionalism is once again shared by
the ROC and the Kremlin, and many Russians are beginning to see Vladimir Putin in a similar vein
– a perception encouraged both by Putin and by the Church, each of which sees the other as a valuable
political ally and sees their respective missions as being interrelated.
... ... ...
When Putin came to power he shrewdly noted the ROC's useful role in boosting nationalism and the
fact that it shared his view of Russia's role in the world, and began to work toward strengthening
the Church's role in Russian society. Early in his presidency the Russian Duma passed a law returning
all church property seized during the Soviet era (which act alone made the ROC one of the largest
landholders in Russia). Over the past decade and a half, Putin has ordered state-owned energy firms
to contribute billions to the rebuilding of thousands of churches destroyed under the Soviets, and
many of those rich oligarchs surrounding him are dedicated supporters of the ROC who have contributed
to the growing influence of the church in myriad ways. Around 25,000 ROC churches have been built
or rebuilt since the early 1990′s, the vast majority of which have been built during Putin's rule
and largely due to his backing and that of those in his close circle of supporters. Additionally,
the ROC has been given rights that have vastly increased its role in public life, including the right
to teach religion in Russia's public schools and the right to review any legislation before the Russian
Duma.
The glue that holds together the alliance between Vladimir Putin and the ROC, and the one that
more than any other explains their mutually-supporting actions, is their shared, sacralized vision
of Russian national identity and exceptionalism. Russia, according to this vision, is neither Western
nor Asian, but rather a unique society representing a unique set of values which are believed to
be divinely inspired. The Kremlin's chief ideologue in this regard is Alexander Dugin (see a good
summary of the historical roots of Dugin's philosophy and of his impact on the Russian government
here.) According to this vision of the relationship between church, state, and society, the state
dominates, the ROC partnering with the state, and individuals and private organizations supporting
both church and state. This has provided the ideological justification for Putin's crackdown on dissent,
and the rationale behind the Church's cooperation with the Kremlin in the repression of civil society
groups or other religious groups which have dissenting political views. And the ROC's hostility toward
the activities in Russia of other religious groups have dovetailed with that of Putin, who views
independent religious activity as a potential threat to his regime.
Internationally, Russia's mission is to expand its influence and authority until it dominates
the Eurasian landmass, by means of a strong central Russian state controlling this vast territory
and aligned with the ROC as the arm of the Russian nation exercising its cultural influence. This
vision of Russian exceptionalism has met with broad resonance within Russia, which goes a long way
to explaining Putin's sky high polling numbers. Putin has successfully been able both to transfer
to himself the social trust placed by most Russians in the ROC and has also to wrap himself in the
trappings of almost a patron saint of Russia. The conflict between Russia and the West, therefore,
is portrayed by both the ROC and by Vladimir Putin and his cohorts as nothing less than a spiritual/civilizational
conflict. If anyone thought Europe's wars over religion were finished in 1648, the current standoff
with Russia illustrates that that is not the case.
"... By #SlayTheSmaugs, an elected Bernie delegate in Philly. ..."
"... #STS believes that the billionaire class are Smaugs (the greed incarnate dragon of The Hobbit), immorally hoarding wealth for no reason beyond ego gratification. To "Slay" the Smaugs, we need a confiscatory wealth tax, stronger democratic institutions to impose it, and a shared moral agreement that #GreedIsEvil to justify it. ..."
"... More; charitable foundations are not the same thing, in many cases, as true charity. Instead foundations often function as hoard preservers as well, and enrich their leadership too. ..."
"... After a certain level of accumulation money is simply ego gratifying points, it's not money any more. ..."
"... Wealth on this scale has nothing to do with financial security or luxurious living. For the trivial, it is (as per D. Trump) a game and money is how you keep score. For the serious, it has to do with power, with the ability to affect other people's lives without their consent. That is why the Smaugs' wealth is absolutely our business. It should be understood that we're talking about taking very large amounts of money and power away from very rich people, people for whom money and power are pretty much the only things they value. It will not be pretty. ..."
"... If we fail to prevent the imposition of this transnational regime there will only be three classes of humans left: kleptocrats, their favored minions, and slaves. ..."
"... A more modern similarity of the US is Rome. Vassals have been going full retard for several years now, traitors sell international competitors military secrets while the biggest merchants buy off the Senate. ..."
"... Isn't there an idiom about cutting off the head of the snake? Once you deal with the strongest opponents, it's easier to go after the others. Too big to fail is nothing short of feeding the beast. ..."
"... I disagree strongly with your premise that some sort of pure and natural meritocracy has ever existed, or could ever exist in human society. Corrupt and oppressive people will always define as "meritorious" those qualities that they themselves possess– whether wealth, "gentle birth," "technical skills," or whatever. We all possess the same merit of being human. ..."
"... Meritocracy is not the same as recognizing greater and lesser degrees of competence in various activities. It is absurd to deny that some are more skillful at some things than others. Assigning the relative "merit" to various competencies is what I find objectionable. ..."
"... Encouraging ethical behavior has nothing to do with ranking the "merit" levels of different occupations. While some occupations are inherently unethical, like that of an assassin, most can be performed in such a way as to do no harm to others, and some are nearly always beneficial to society at large. ..."
By #SlayTheSmaugs, an elected Bernie delegate in Philly.
#STS believes that the billionaire class are Smaugs (the greed incarnate dragon of
The Hobbit), immorally hoarding wealth for no reason beyond ego gratification. To "Slay" the Smaugs,
we need a confiscatory wealth tax, stronger democratic institutions to impose it, and a shared moral
agreement that #GreedIsEvil to justify it.
Worshiping Wealth
When Gordon Gekko proclaimed that 'Greed is Good' in 1987, it was an obvious rejection of several
millennia of teachings by traditional prophets and priests. Yet when Gekko preached greed, he was
merely reinforcing the current cultural norm; greed had already been rebranded a virtue. (Still,
the speech was to remind us Gekko was a bad guy). Consider that Madonna had proclaimed herself a
Material Girl three years earlier, and "Living Large" was cool. Conspicuous consumption is walking
the talk that greed is good.
Why had greed become good? I blame the creation of a credit-fueled culture of constant consumption
that necessarily praises coveting stuff, plus the dismantling of the regulatory state that had kept
Wall Street and wannabe oligarchs in check.
Our healthy cultural adoration of the self-made man, of respect for success, warped into worship
of the rich. They are not the same. Wealth can be inherited, stolen through fraud and other illegal
activities, or harvested from bubbles; none of these or myriad other paths to riches is due respect,
much less worship. Paired with another 80's definition-government is the problem-worshiping wealth
facilitates all the dysfunction in our government.
Remembering Greed is Evil
Thirty years later, the old social norm-the one that protected the many from the few, the one
that demonized greed as a deadly sin-is resurgent. We have a Pope who preaches against greed, and
who
walks his talk . We had a Presidential candidate of a major party-Bernie Sanders-who railed against
those living embodiments of greed, the Billionaire Class, and walked his talk by rejecting their
money. At the convention, he has invited delegates to four workshops, one of which is "One Nation
Now: Winning the Fight Against Racism and Greed". We have a late night comedian-John Oliver-
ridiculing the prosperity gospel
and taking on the debt
industry . We have mass consciousness rising, reflected in Occupy, the label "the 99%", BLM and
more.
But we need more voices insisting #GreedIsEvil. We need to teach that basic message at home, in
school, and in houses of worship. We need to send the right signals in our social interactions. We
need to stop coveting stuff, and start buying with a purpose: Shopping locally, buying American,
buying green and clean, and buying less. We need to waste less, share more and build community. We
need to re-norm-alize greed as evil, make it shameful again. Then we will have redefined ourselves
as citizens, not consumers.
But make no mistake: America cannot become a just nation simply by the 99% becoming more virtuous.
The cultural shift is necessary but not sufficient, for norms alone do not deliver social and economic
justice. Shame will not slay the Smaugs; we need structural change in the political economy.
Extreme greed, the greed of Smaugs, is categorically different than the petit greed underlying
the irrational, constant consumption and the worship of wealth. Extreme greed manifests as a hoard
of wealth so great that "purchasing power" is an irrelevant concept; a hoard so great it lacks any
utility other than to be sat upon as a throne, gratifying the Smaug's ego and symbolizing his power.
That greed must be understood as an intolerable evil, something so base and malevolent that the full
power of the state must be used against it.
This essay is my contribution to the cause of returning extreme greed to its rightful place in
the pantheon of ultimate evils. Here is the thesis: extreme greed must be 'slain' by the state because
extreme greed is brutally violent.
The Stealth Violence of False Scarcity and "Cutting Corners"
Greed's violence is quiet and deadly: The violence of false scarcity and of "corner cutting".
Scarcity is not having enough because there just isn't enough to go round, like the
nearly 50 million people who don't reliably have food during the year, including 15 million kids.
False scarcity is when actually, there's plenty to go around, but people generally don't have enough
because of hoarders.
It's a concentrated version of what happened to pennies in 1999. People keeping pennies in piggy
banks created a
shortage felt throughout New York City . If only people had broken open their piggy banks, and
used their pennies, there would have been plenty of pennies in circulation, and shopkeepers wouldn't
lose money by rounding purchases down. In this piece, I'm focusing on false scarcity of dollars,
not pennies, and the maiming and premature death that results from false dollar scarcity. But the
idea is essentially the same; there's just far fewer relevant piggy banks.
By the quiet violence of 'corner cutting', I'm referring to unsafe, even deadly, workplaces that
could be safe if the employers invested in safety.
Sporadically, greed also drives overt, and sometimes profoundly bloody violence to protect the
hoard. Think of employer violence against unions and union organizers,
a la Henry Ford , or
John D. Rockefeller . Nonetheless in this country now, the violence of greed tends to be more
covert. It is that quiet violence, in both forms, I want you to hear now.
As Sanders often reminds us, in this, the richest nation in the world, nearly 50 million people
are living in poverty; roughly one in seven Americans. And as Sanders explained, in a
speech in West Virginia , 130,000 people die each and every year as a result of poverty. I have
not read the study Sanders referred to, so I don't know how much it overlaps with
the rise
of suicide that accelerated after 2006 and which appears to be correlated with financial stress.
Nor do I know how it overlaps with the
documented increase in white mortality that also appears to correlate with financial stress.
Regardless of overlap, however, each of these studies reflects the quiet violence of false scarcity.
Naked Capitalism has featured many posts documenting the damage of greed;
this is a recent one .
Chronic and acute financial stress from false scarcity maims, and kills. And Smaugs create false
scarcity to feed money to their egos and maintain their oligarchic power.
As Lambert often says, they don't call it class warfare for nothing.
But wait, you might insist, how false is the scarcity, really? How much do a few billionaires
matter? Ranting that greed is evil is all well and good, but really, can a relative handful of people
be manufacturing scarcity where there is none, shortening and taking millions of lives in the process?
Aren't you making your target too narrow in going after the Smaugs?
Twenty people had hoarded $732,000,000,000. America is a nation of about 300,000,000 people. That
means 20 people could give a combined $2,370 to every American, and still hoard $1 billion each.
I'm not suggesting that's how the redistribution should be done, but it's notable that in an era
when
some 200 million Americans haven't been able to save $1000 for an emergency, twenty people could
give everyone over two grand while remaining fabulously wealthy.
Now, these 20 monstrous people, these full grown Smaugs, are not alone in their extreme greed.
Adding in the assets of the next 380 richest Americans brings the total wealth hoarded to $2.34 trillion.
That number is so large it's hard to process , so let's think this through.
First, imagine that we took all of that money with a confiscatory tax, except we again left each
of the 400 people with $1 billion. They would still be obscenely rich, so don't pity them.* Our tax
thus netted $1.94 trillion. Since that's still an unimaginable number, let's compare it to some recent
government spending.
In December 2015, Congress funded five years' worth of infrastructure construction. Congress and
President Obama were very self-congratulatory because our infrastructure is a mess, and building
things involves good paying jobs. So, how much did five years of infrastructure building and job
creation cost?
$305 billion . That's less than the $400 billion we let the 400 Smaugs keep at the start of this
thought experiment. With the $1.94 trillion we imagine confiscating, we could keep building at the
2015 pace for 32 years. Or we could spend it much faster, and create an economic boom the like of
which this nation hasn't seen in generations.
Even Bernie Sanders, he of the supposedly overly ambitious, unable-to-be-paid for initiatives,
only
proposed spending $1 trillion on infrastructure over five years -a bit more than half what our
tax would net. (Nor did this supposed radical call for a confiscatory wealth tax to fund his plan.)
Sanders estimated his proposal would create 13 million good paying jobs. With nearly double the money,
surely we get nearly double the jobs? Let's be conservative and say 22 million.
In sum, we could confiscate most of the wealth of 400 people-still leaving them obscenely rich
with $1 billion each-and create 22 million good paying jobs over five years. But we don't; we let
the Smaugs keep their hoards intact. Now consider this is only taxing 400 people; what if we taxed
the richest 2,000 people more justly? What if we taxed corporations effectively? What if we stopped
giving corporate welfare? A confiscatory wealth tax, however, simply isn't discussed in polite company,
any more than a truly progressive income tax is, or even serious proposals to end corporate welfare.
The best we can do is agree that really, someday soon, we should end the obscenity that is the carried
interest loophole.
False scarcity isn't simply a failure of charity, a hoarding of wealth that should be alms for
the poor. False scarcity is created through the billionaires' control of the state, of public policy.
But the quiet violence of greed isn't visited on the 99% only through the failure to pay adequate
taxes. Not even through the Smaugs' failure to have their corporations pay adequate wages, or benefits.
Predatory lending, predatory servicing, fraudulent foreclosure, municipal bond rigging, and pension
fund fleecing are just some of the many other ways immoral greed creates false scarcity.
While false scarcity has the broadest impact, it is not the only form of stealth violence used
by the billionaires in their class war against the rest of us. The Ford and Rockefeller style violence
of fists and guns may be rare in the U.S. these days, but a variant of it remains much too common:
Unsafe workplaces, the quiet violence of "cutting corners". Whether it's
the coal industry , the
poultry
industry , or the
fracking and
oil industries, or myriad other industries, unsafe workplaces kill, maim and sicken workers.
Part of the political economy restructuring we must do includes transforming the workplace.
Feel the Greed
Let us remember why this stealth violence exists-why false scarcity and unsafe workplaces exist.
People who have more money than they hope to spend for the rest of their lives, no matter how
many of their remaining days are "rainy"; people who have more money to pass on than their children
need for a lifetime of financial security, college and retirement included; people who have more
money to pass on than their grandchildren need for a similarly secure life–these people insist on
extracting still more wealth from their workers, their clients, and taxpayers for no purpose beyond
vaingloriously hoarding it.
Greed is evil, but it comes in different intensities. Petit greed is a corrosive illness that
decays societies, but can be effectively ameliorated through norms and social capital. Smaug greed
is so toxic, so potent, that the state is the only entity powerful enough to put it in check. Greed,
particularly Smaug greed, must be put in check because the false scarcity it manufactures, and the
unsafe workplaces it creates, maim and kill people. The stealth violence of Smaug greed justifies
a tax to confiscate the hoards.
#GreedIsEvil. It's time to #SlayTheSmaugs
*One of the arguments against redistribution is that is against the sacrosanct efficient market,
which forbids making one person better off if the price is making someone else worse off. But money
has diminishing returns as money after a certain point; the purchasing power between someone
with one billion and ten billion dollars is negligible, though the difference between someone with
ten thousand and a hundred thousand, or a hundred thousand and a million is huge. After a certain
level of accumulation money is simply ego gratifying points, it's not money any more. Thus taking
it and using it as money isn't making someone 'worse off' in an economic sense. Also, when considering
whether someone is 'worse off', it's worth considering where their money comes from; how many people
did they leave 'worse off' as they
extracted the money? Brett ,
July 22, 2016 at 10:07 am
After a certain level of accumulation money is simply ego gratifying points, it's not
money any more.
It quite literally isn't "money" as we regular folks know it beyond a certain point – it's
tied up in share value and other assets. Which of course raises the question – when you decide
to do your mass confiscation of wealth, who is going to be foolish enough to buy those assets
so you actually have liquid currency to spend on infrastructure as opposed to illiquid assets?
Or are you simply going to print money and spend it on them?
Wealth on this scale has nothing to do with financial security or luxurious living. For
the trivial, it is (as per D. Trump) a game and money is how you keep score. For the serious,
it has to do with power, with the ability to affect other people's lives without their consent.
That is why the Smaugs' wealth is absolutely our business. It should be understood that we're
talking about taking very large amounts of money and power away from very rich people, people
for whom money and power are pretty much the only things they value. It will not be pretty.
People become rich and stay that way because of a market failure that allows them to accumulate
capital in the same way a constricted artery accumulates blood. What I'm wondering, continuing
this metaphor, is what happens when all that money is released back into the market at once via
a redistribution - toxic shock syndrome.
You can see what happens to markets in places where "virtual money" (capital) brushes up against
the real economy: the dysfunctional housing situation in Vancouver, London, New York, and San
Francisco.
It may be wiser to argue for wealth disintegration instead of redistribution.
Yes I was thinking about that money is just something the government prints to make the system
work smoothly. But that, and pretty much any view of money, obscures the problem with the insanely
"wealthy".
If these people, instead of having huge bank accounts actually had huge armies the government
would move to disarm them. It wouldn't re-distribute the tanks and rifles. It would be obviously
removing a threat to everybody.
Now there would be the temptation to wave your hands and say you were "melting it into plowshares"
but that causes an accounting problem - that is, the problem being the use of accounting itself.
Destroying extreme wealth and paying for say roads is just two different things and making them
sound connected is where we keep getting bogged down. Not a full-on MMT'er yet but it really has
illuminated that fact.
The western assumption is that money is a commodity, from salt to gold, to bitcoin, we assume
it can be manufactured, but the underlaying reality is that it is a social contract and every
asset is presumably backed by debt.
Here is an interesting link which does make the point about the contractual basis of money in
a succinct fashion; http://rs79.vrx.palo-alto.ca.us/opinions/ideas/economics/jubilee/
Since the modern commodity of money is backed by debt and largely public debt, there is enormous
pressure to create as much debt as possible.
For instance, the government doesn't really budget, it just writes up these enormous bills, attaches
enough goodies to get the votes and the president can only pass or veto it and with all the backing
and no other method, a veto is a weak protection.
To budget is to prioritize and spend according to ability. What they could do would be to break
these bills into all their various "line items," have every legislator assign a percentage value
to each one, put them back together in order of preference and then the president would draw the
line.
It would balance the power and reduce the tendency to overspend, but it would blow up our financial
system, which if anyone notices, is based on the sanctity of government debt.
If instead of borrowing the excess money out of the system, to spend on whatever, if the government
threatened to tax it out, people would quickly find other ways to store value than as money in
the financial system.
Since most of us save for the same general reasons, from raising children to retirement, we
could invest in these as public commons, not try to save for our exact needs. This would serve
to strengthen communities and their environments, as everyone would be more dependent on those
around them, not just having a private bank account as their personal umbilical cord.
We treat money as both medium of exchange and store of value. As Rick points out above, a medium
is like blood in the body and it needs to be carefully regulated. Conversely, the store of value
in the body is fat and while many of us do carry an excess, storing it in the circulation system
is not wise. Clogged arteries, poor circulation and high blood pressure are analogous to a bloated
financial system, poor circulation and QE.
Money is not a commodity, but a contract.
Do you realize that this supposed billionaire wealth does not consist of actual US dollars
and that, if one were to liquidate such wealth (in order to redistribute it in "fair" equal-dollars)
that number might drastically change?
The main thing these people (and indeed your pension funds) are actually hoarding are financial
assets, and those, it turns out, are actually "scarce". Or, well, I don't know what else you would
call trillions of bonds netting a negative interest rate and an elevated P/E stock market in a
low-growth environment.
It's a bit of a pickle from a macro environment. You can't just force them to liquidate their
assets, or else the whole system would collapse. It also kind of escapes the point that someone
has to hold each asset. I would be excited to see what happens when you ask Bill Gates to liquidate
his financial assets (in order to distribute the cash). An interesting thought, for sure. And
one that would probably bring the market closer to reasonable valuations.
It is simply a wrong conclusion to say "Wealth is x, and if we distribute it, everyone would
get x divided by amount of recipients in dollar terms". Now if you wanted to redistribute Bill
Gates' stake in Microsoft in some "fair" way, you could certainly try but that's not really what
you proposed.
Either way you can't approach wealth policy from a macro perspective like this, because as
soon as you start designing macro-level policy to adjust (i.e. redistribute) this wealth, the
value of it will fluctuate very wildly in dollar terms and may well leave everyone less well off
in some weird feedback loop.
"The full power of the state must be used against" #extremegreed: Except, of course, "L'etat
c'est moi "
Of course as a Bernie supporter, the writer knows that, knows that it is a long game to even
start to move any of the hoard out of Smaug's cave, that there are dwarves with glittering eyes
ready to take back and reduce to ownership and ornamentation the whole pile (maybe they might
'share" a little with the humans of Lake Town who suffered the Dragon's Fire but whose Hero drove
a mystical iron arrow through the weak place in Smaug's armor, all while Sauron and Saruman are
circling and plotting and growing hordes of genetically modified Orcs and Trolls and summoning
the demons from below
The Elves seem to be OK with a "genteel sufficiency," their wealth being useful durable stuff
like mithril armor and those lovely houses and palaces up in the trees. Humans? Grabbers and takers,
in Tolkien's mythology. I would second that view - sure seems to me that almost any of us, given
a 1000-Bagger like Zuckerman or Jobs or that Gates creature fell into, or Russian or Israeli or
African or European oligarchs for that matter (pretty universal, and expected given Davos and
Bilderberg and Koch summits) the old insatiable lambic system that drives for pleasure-to-the-max
and helps our baser tribal drives and penchant for violence to manifest and "thrive" will have
its due. Like 600 foot motor yachts and private-jet escape pods and pinnacles islands with Dr.
No-style security provided by guns and accountants and lawyers and faux-legitimate political rulers
for hire
Lots of analysis of "the problem." Not so much in the way of apparent remedies, other than
maybe lots of bleeding, where the mopes will do most of it and if history is any guide, another
Smaug will go on around taking all the gold and jewels and other concentrated wealth back to another
pile, to sit on and not maybe even gloat over because the scales are just too large
Still hoping for the emergence of an organizing principle that is more attractive that "take
whatever you can and cripple or kill anyone who objects "
"People who have more money than they hope to spend for the rest of their lives, no matter
how many of their remaining days are "rainy"; people who have more money to pass on than their
children need for a lifetime of financial security, college and retirement included; people
who have more money to pass on than their grandchildren need for a similarly secure life–these
people insist on extracting still more wealth from their workers, their clients, and taxpayers
for no purpose beyond vaingloriously hoarding it."
These are people who are obscenely wealthy as opposed to merely wealthy. The fastest way to
challenge their toxic power would be to help the latter group understand that their interests
are not aligned with the former. Most millionaires (as opposed to billionaires) will eventually
suffer when the last few drops of wealth remaining to the middle and working classes are extracted.
Their future prosperity depends on the continued existence of a viable, mass consumer economy.
The billionaires imagine (in my view falsely) that they will thrive in a neo-feudal future–
where they own everything and the vast majority of humanity exists only to serve their needs.
This is the future they are attempting to build with the new TPP/TISA/TTIP regime. If we fail
to prevent the imposition of this transnational regime there will only be three classes of humans
left: kleptocrats, their favored minions, and slaves. Most neoliberal professionals, who imagine
that they will be in that second group, are delusional. Did the pharaohs have any need for people
like Paul Krugman or Maureen Dowd?
Pharaohs didn't need a middle/professional class as large as the ones in most western democracies
today. But, we are going in the pharaonic direction.
The problem our polite, right wing professional classes face is that they are increasingly
too numerous for society's needs. Hence the creeping gig-i-fication of professional employment.
The wage stagnation in all but the most guild-ridden (medicine) professions.
It's so reminiscent of what happened to the industrial working class in the late 70s and 80s.
I still remember the "well-reasoned", literate arguments in magazine op-eds proclaiming how line
workers had become "excess" in the face of Asian competition and automation. How most just needed
to retrain, move to where the jobs are, tighten their belts, etc. It's identical now for lawyers,
radiologists, and many layers of the teaching professions. If I weren't part of that "professional"
class I'd find the Schadenfreude almost too delicious.
If we fail to prevent the imposition of this transnational regime there will only be three
classes of humans left: kleptocrats, their favored minions, and slaves.
Sounds about right, but you are overlooking the fact that the largest class will be The Dead.
They will not need nearly so many of Us, and we will be thinned, trimmed, pruned, marooned, or
otherwise made to go away permanently (quietly, for preference, I assume, but any way will do).
Ergo, the violence of ineffectual health care, toxic environment, poisonous food, dangerous
working conditions and violence (for instance, guns and toxic chemicals) in our homes, schools,
streets, workplaces, cities and, well, everywhere are not only a feature, but a major part of
the plan.
It has been extensively documented that the merely wealthy are very upset at the obscenely
wealthy.
If the author is truly focusing on a tax for obscene wealth I'd like to know a specific threshold.
Is it 1 Billion and up? annual limit how many times the median income before it kicks in?
Well, I'm happy to have a discussion about at what threshold a confiscatory wealth tax should
kick in; it's the kind of conversation we have with estate taxes.
I'm thinking a one off wealth tax, followed by a prevention of the resurrection of the problem
with a sharply progressive income tax. Is $1 billion the right number for this initial reclamation?
maybe. It is about the very top few, not the merely wealthy.
$1 billion is a reasonable amount of assets for determining whether to confiscate a portion
of a person's wealth in taxes. Or perhaps we could base it on a percentage of GDP. The U.S. GDP
in 2015 was approximately $17.9 trillion. Anyone with $1.79 billion or more in assets would have
1% of 1% of the U.S. GDP (0.01%). That's a lot of wealth, and surely justifies a heavy tax.
'Professionals, who imagine that they will be in that second group, are delusional. Did the
pharaohs have any need of Paul Krugman'
Sure they did. Those were called Priests who told the people what the gods were thinking. And
since Pharoah's concluded themselves gods. The slaves revolt by working less. Anybody notice the
dropping production levels the last couple of years? Whipping the slaves didn't turn out well
for the Egyptians.
A more modern similarity of the US is Rome. Vassals have been going full retard for several
years now, traitors sell international competitors military secrets while the biggest merchants
buy off the Senate.
Ceasar becomes more a figurehead until one leads a coup which has not happened yet. Aquiring
more slaves begins to cost more than what the return in general to the society brings but the
Smaugs do not care about that until the barbarians begin to revolt (See Orlando for example, the
shooter former employee of DHS. Probably pissed some of his comrades were deserted by US in some
manner.
My point was that the category of people in this priestly caste will likely be far, far smaller
than the millions of credentialed neoliberal professionals currently living large in the top 10%
of the developed world.
Interesting mental image– to see Paul Krugman chanting praises to the new Son of the Sun God
the Donald!!
Look, there's a simple way to #SlayTheSmaugs, and it's a confiscatory wealth tax coupled with
a sharply progressive income tax, as part of an overall restructuring of the political economy.
Simple, is of course, not easy; indeed my proposal is currently impossible. But like Bernie
I'm trying to change the terms of political debate, to normalize what would previously be dismissed
as too radical to be countenanced.
I don't think the looting professional class needs to be slain, in the #SlayTheSmaugs sense.
I think they can be brought to heel simply by enforcing laws and passing new ones that are already
within acceptable political debate, such as one that defines corruption as using public office
for private gain. I think norms matter to the looting professional class as well. Another re-norm-ilization
that needs to happen is remembering what a "profession" used to be
Friends and neighbors!! Most of this "wealth" is ephemeral, it is based on the "value of assets"
like stocks, bonds, real estate, et al. If all of this "wealth" gets liquidated at the same time,
values would collapse. These people are fabulously wealthy because of the incredible inflation
we have seen in the "assets" they hold.
Remember, during the Great Depression the "wealth" wasn't confiscated and redistributed, it
was destroyed because asset values collapsed and over 2000 banks failed wiping out customer accounts.
This also collapsed the money supply causing debt defaults, businesses failures, and worker laid
offs. No one had any money because there was none.
The US was on the gold standard limiting the creation of liquidity. President Roosevelt went
off the gold standard so that he could work to increase the money supply. It took a long time.
The result of the depression was decades of low debt, cheap housing, and hard working people who
remembered the hard times. The social mood gradually changed as their children, born in more prosperous
times, challenged the values of their parents.
Even though the bulk of what the super rich hold is in paper assets, they still hold tons of
real economy assets. They've succeeded in buying enough prime and even merely good real estate
(like multiple townhouses in Upper West Side blocks and then creating one monster home behind
the facade) to create pricing pressure on ordinary renters and homeowners in the same cities,
bidding art through the roof, owning mega-yachts and private airplanes, and most important of
all, using the money directly to reshape society along their preferred lines, witness charter
schools.
If you are going to fight against the "Greed is Good" mentality, you are going to have to address
the habits of the average middle class household. Just take a look at the over accumulation of
amenities and creature comforts. The desire to signal ones status/wealth through "stuff" is totally
out of control and completely divorced from means/income.
"But we need more voices insisting #GreedIsEvil. We need to teach that basic message at home,
in school, and in houses of worship. We need to send the right signals in our social interactions.
We need to stop coveting stuff, and start buying with a purpose: Shopping locally, buying American,
buying green and clean, and buying less. We need to waste less, share more and build community.
We need to re-norm-alize greed as evil, make it shameful again. Then we will have redefined ourselves
as citizens, not consumers."
Isn't there an idiom about cutting off the head of the snake? Once you deal with the strongest
opponents, it's easier to go after the others. Too big to fail is nothing short of feeding the
beast.
There was a time not that long ago that I would have opposed a "confiscatory wealth tax". After
looking at what most of those in the .1% are doing with their wealth, and their contempt for the
average person, those days are long gone. Plus it's good economics.
The only question is what is "obscene wealth". Well like pornography, I think we know it when
we see it.
I am wondering about the distribution of all this concentrated wealth; how much of it is spread
around in the equities and bond markets?
And if that amount was redistributed to the general public how much of it would return to the
equities and bond market?
I'm thinking not very much which would have catastrophic effects on both markets, a complete
reordering. This would undoubtedly crush the borrowing ability of our Federal government, upset
the apple cart in other words. With less money invested in the equities market it would undoubtedly
return to a lower more realistic valuation; fortunes would be lost with no redistribution.
Fair to ask: How do we achieve a confiscatory wealth tax without catastrophic unintended consequences?
But that's a very different question than: should we confiscate the Smaug's wealth?
One mechanism might be to have a government entity created to receive the stocks, bonds and
financial instruments, and then liquidate them over time. E.g. Buffett has been giving stock to
foundations for them to sell for awhile now; same kind of thing could be done. But sure, let's
have the "How" conversation
If lobbying were outlawed at the Federal level the billionaires and multi millionaires would
need to invest in something else. That signal has a multiplier effect.so your right eboit enforcement
of mostly what is on the books already. A 'wall' doesnt have to be built for illegal immigrants
either. Fine a couple dozen up the wazoo and the signal gets passed the game is over.
But until a few people's daughters are kidnapped or killed like in other 3rd world countries,
it wont change. That is sad but reality is most people do not do anything until it effects them.
I started slightly ahead of the crowd in summer of 2007 but that is because a regional banker
told me as we liked discussing history to look at debt levels of 1928 and what happened next.
On top of that, we are the like the British empire circa 1933 so we get the downside of that as
well.
Pain tends to be the catalyst of evolution that fully awakens prey to the predators.
I am sorry, Sir Smaug slayer. The underlying theme of your lengthy disquisition is that Sanders
is the legitimate voice of the 99%, and his future complicity within the Democratic Party is thereby
ameliorated by his current proposals within it. This is the true meat of your discourse ranging
so far and wide – even with the suggestion early on that we the 99% need tutoring on the evils
of greed.
Not so. That ship has sailed. Our Brexit is not yet upon us, but that it is coming, I have
no doubt. The only question is when. To paraphrase a Hannah Sell quote on such matters. . . for
decades working class people have had no representation in the halls of Congress. All of the politicians
. . . without exception, have stood in the interests of the 1% and the super-rich.
Bernie Sanders included. Hannah's remarks were more upbeat – she made an exception for Jeremy
Corbyn. Unfortunately, I can't do that. Bernie has folded. We need to acknowledge that.
One of the arguments against redistribution is that is against the sacrosanct efficient
market, which forbids making one person better off if the price is making someone else worse
off.
I think you mean downward redistribution here since upward redistribution seems to be rather
sacrosanct and definitely makes one person better off at the price of making many someones worse
off to make it happen.
Confiscatory wealth tax is too blunt an instrument to rectify the root causes discussed in
this article, and you do not want a blunt impact to the effect of disincentivizing pursuit of
financial success.
Further Centralization the populous' money will incite more corruption which is what allows
the have's to continue lording it over the have nots.
What are alternatives?
Instead Focus on minimizing corruption,
Then it will be possible to implement fair legislation that limits the options of the greed to
make decisions that results in unfair impacts on the lower class.
Increase incentives to share the wealth, (tax deductible charitable giving is an example).
We do need to encourage meritocracy whenever possible, corruption and oppression is the antithesis
to that.
We need to stop incentivizing utilization of debt, that puts the haves in control of the have
nots.
"Financial success. " As long as those words go together, and make an object of desire, the
fundamental problem ain't going away.
Of course the underlying fundamental problem of human appetite for pleasure and power ain't
going away either. Even if a lot of wealth was taken back (NOT "confiscated") from the current
crop and hopeful horde of kleptocrats
"We do need to encourage meritocracy whenever possible, corruption and oppression is the antithesis
to that."
I disagree strongly with your premise that some sort of pure and natural meritocracy has
ever existed, or could ever exist in human society. Corrupt and oppressive people will always
define as "meritorious" those qualities that they themselves possess– whether wealth, "gentle
birth," "technical skills," or whatever. We all possess the same merit of being human.
An Egyptologist, with an Oxbridge degree and extensive publications has no merit– in any meaningful
sense– inside a frozen foods warehouse. Likewise, the world's best frozen foods warehouse worker
has little to offer, when addressing a conference focused on religious practices during the reign
of Ramses II. Meritocracy is a neoliberal myth, intended to obscure the existence of oligarchy.
An Egyptologist, with an Oxbridge degree and extensive publications has no merit– in any
meaningful sense– inside a frozen foods warehouse. Likewise, the world's best frozen foods
warehouse worker has little to offer, when addressing a conference focused on religious practices
during the reign of Ramses II. Meritocracy is a neoliberal myth, intended to obscure the existence
of oligarchy.
I am confused.
You claim meritocracy is "a neoliberal myth, intended to obscure the existence of oligarchy",
but (seemingly) appeal to meritocratic principles to claim a warehouse worker doesnt offer much
to an academic conference. Can you clear up my misunderstanding?
I agree, btw, that Idealized meritocracy has never existed (nor can). Follow up question: There
has never been an ideal ethical human, does that mean we should stop encouraging ethical behavior?
Meritocracy is not the same as recognizing greater and lesser degrees of competence in various
activities. It is absurd to deny that some are more skillful at some things than others. Assigning
the relative "merit" to various competencies is what I find objectionable.
Encouraging ethical behavior has nothing to do with ranking the "merit" levels of different
occupations. While some occupations are inherently unethical, like that of an assassin, most can
be performed in such a way as to do no harm to others, and some are nearly always beneficial to
society at large.
Someone who did nothing but drink whiskey all day, and tell funny stories in a bar, is far
more beneficial to society at large than a busy, diligent economist dreaming up ways to justify
the looting of the kleptocrats.
Wealth Redistribution occurs when the peasants build a scaffold and frog march the aristocracy
up to a blade; when massive war wipes out a generation of aristocracy in gas filled trenches or
in the upcoming event.
The process of the marketization of the economy from Mill to Becker described earlier is
concluded in Becker's notions of "Human Capital" and "Economics of Crime and Punishment."
Becker reformulates the ethical modes by which one governs one's self by theorizing the
economic self as human capital that generates labor in return for income. Such self-government
is conducted by economizing one's earning power, the form of power that one commands over one's
labor. Theorizing self-government as a form of command over one's own labor, Becker inserts the
power relations of the market, which Smith identified as purchasing power over other people's
labor, into the ethical sphere of the relationship between a person andherself.
Becker's theory of self-government also entails a transformation of the technologies of the
self into an askesis of economizing the scarce means of the marketized self that have
alternative uses for the purpose ofmaximizing the earning and purchasing power one commands in
the mar- ketized economy.
The marketization of the self that turned zoon oikonomikon into a power-craving homo
economicus also makes him governable by the political monarch, as demonstrated in the Economic
analysis of Crime and Punishment. Economic man is governed through the legal framework of the
mar- ket economy. Human action is controlled by tweaking a matrix of punishments and incentives
that make the governed subject, as a prudent creature who craves to maximize his economic
power, freely choose the desired course of action that will ensure economic growth. At the same
time that Becker's technologies of the conduct of the marketized self establish a neoliberal
self-mastery, they also enable the governmental technology of conducting one self conduct in
the all-encompassing and ever growing marketized economy. Although Becker seems to reverse the
ageold ethical question, that is, how can a human, as a governed subject, become free in the
economy, into the technological one of how one can make a free human governable, the end result
is pretty much the same, as the economy is reconstituted as a sphere in which the subject is
seen as free and governed.
A neoliberal interpretation of Hobbes's economic power is found in Tullock and Buchanan's
use of economic theory to "deal with traditional problems of political science," that is, to
trace the works of Smithian economic power that have by now been transposed onto the political
sphere: Incorporat(ing) political activity as a particular form of exchange; and, as in the
market relation, mutual gains to all parties are ideally expected to result from the collective
relation. In a very real sense, therefore, political action is viewed essentially as a means
through which the "power" of all participants may be increased, if we define "power" as the
ability to command things that are desired by men. To be justified by the criteria employed
here, collective action must be advantageous to all parties. (Tullock and Buchanan 1962:23)
"... By Enrico Sergio Levrero, Associate Professor of Economics, Roma Tre University. Originally published at the Institute for New Economic Thinking website ..."
In contrast to Keynes's emphasis on the monetary nature of interest rates, the modern theory
of central banking focuses on a benchmark rate for monetary policy that reflect "fundamental
forces" supposedly unaffected by monetary factors. Its theoretical underpinning stems from
Wicksell's analysis of the relationship between market and natural interest rates as restated
in the so-called New Keynesian theory which combines real-business-cycle general equilibrium
models with imperfect competition and nominal rigidities.
Here, at least in the short run, discrepancies between the actual and natural interest rate
are deemed to lead to a rate of price inflation different from the desired and expected one. If
some kind of price rigidity is present, the interest rate difference will also lead to a
discrepancy between actual and potential output. The resulting rule for monetary policy is that
authorities should credibly commit themselves to following the natural rate of interest (NRI).
They must therefore forecast this "neutral" rate, namely, the real rate that, if maintained,
would keep the economy at its production potential over time.
Despite the mainstream consensus on this approach,
determining the "equilibrium interest rate" is a murky business . A first problem is that,
while the "benchmark rate" ought to be based on sound theoretical foundations that allow a
meaningful interpretation of its behaviour, all sorts of definitions of it appear in the
literature when assuming real shocks away from balanced growth. They reflect the theory's
reliance on notions of perfect or imperfect competition in commodities and factor markets as
well as the possible influence of transitory or only permanent components of the natural
rate.
The result is usually a view in which we have a "short-run" natural rate of interest that
varies (usually pro-cyclically) during the cycle, resembling Dennis Robertson's old
prescription that monetary policies should follow temporary shifts of the demand for and supply
of loanable funds, along with a long – run natural rate that corresponds to
potential output for a given degree of market imperfections when both causal shocks
and lags of adjustment are averaged out.
The two approaches lead to divergent monetary policies. If you try to conduct policy by
reference to the long run notion of the natural rate determined by the steady state IS
curve when all the lags and random shocks disappear, you will not favour sharp changes in the
short-term interest rate during the cycle. By contrast, if you rely on a "short run" natural
rate that could fall during a crisis, you would see a slow decrease in the policy rates as too
little to stimulate economic activity.
Compounding these difficulties is the variability induced by the estimation methods of the
natural rate of interest. The benchmark rate of the monetary policy should in fact be readily
computable from observable economic data, but its counterfactual nature inevitably leads to a
variety of estimation methods with results that recall the early criticism by Myrdal and
Lindahl that Wicksell's natural rate is not an operational notion in the sense that it was
incapable of practical application. With each the econometric method raising special problems
of its own, the resulting variety and uncertainty of the value of the natural rate cannot but
pose significant challenges for practical monetary policy.
The divergent estimates of the NRI advanced during the recent 2008 crisis are a case in
point. The estimates vary hugely, with model-based and filtering methods producing higher
volatility than semi-structural approaches or peak-to-peak averages. Some estimates of the NRI
provided negative values on average and not only as a possible (short-lived) effect of
temporary shocks, whereas others suggested that the NRI remained close to but higher than zero.
These differences imply drastically different evaluations of the stance of monetary policy as
policymakers weighed whether it made sense to drive the nominal policy rates towards their zero
lower bound.
But the limits of the NRI as a benchmark for monetary policy are not only statistical or
related to the difficulty of distinguishing among the kind and persistency of economic shocks.
They pertain to the theory itself, specifically to model specification and the alleged
independence of the average or normal interest rate from monetary policy.
Firstly, New-Classical and New-Keynesian models focus on the volatility of output, that is,
its variance, on the assumption that the output gap will be closed by market forces. This hides
the fact that potential output may fall during the crisis due to the destruction of productive
capacity stemming from a fall in effective demand. This would break down the distinction
between short-lived demand shocks on the one hand and supply shocks on the other, thus
complicating any estimate of the NRI and raising questions about its theoretical relevance.
Secondly, in both the theoretical models and estimate procedures, an inverse relation
between the interest rates and components of aggregate demand is postulated as well as between
the former and the price level, although such relations are acknowledged as being weak and
doubtful. In practice, output elasticity with respect to interest rates appears low and
asymmetric, and investments in fixed capital are determined mainly by expected changes in
aggregate demand. Moreover, the Gibson paradox and its modern restatement in the price puzzle
suggest that a direct relation between prices and the interest rate may exist due to prices
adjusting to the monetary costs of production which include the pure remuneration of capital,
that is interest costs. All this implies that, if, after a fall in the interest rate, we
observe a fall in prices (or una tantum a lower rate of inflation), this would not
signal that the NRI should be lower. Nor should a low elasticity of output to the interest rate
be interpreted as a reliable sign that the natural rate of interest has fallen.
But a more fundamental criticism can be advanced concerning the sheer existence of a natural
rate of interest determined by "productivity and thrift" independent of the monetary policy.
New-Keynesian models restate the loanable funds theory, viewing the market rate of interest as
determined by the supply of and demand for credit, with the natural rate of interest set by the
supply of and demand for savings when output is at its potential level. This theory was already
criticised by Keynes, who questioned whether investments adjust to savings through changes in
interest rates. On the grounds of the principle of effective demand, Keynes argued that savings
equalise investments by means of income changes and considered the notion of the NRI as not
useful. He instead viewed the rate of interest as a monetary phenomenon to which capital
profitability would adjust. He also argued that credit is not an alternative to savings but the
necessary preparation for them and that until potential output is achieved, investments are
financed by the finance process and income changes rather than by any previous saving
supply.
This criticism of Keynes and his idea that there is no mechanical tendency to full
employment was strengthened later by the Cambridge capital controversy which showed that it was
impossible to derive a decreasing demand curve for investments with regard to the interest rate
-- a decreasing curve which is at the root of the neoclassical mechanism guaranteeing the
tendency of actual output toward potential output. Unless a single commodity economy is
assumed, a surrogate production function cannot in fact be derived due to the phenomena of
re-switching and reverse capital deepening. Moreover, in the market for savings and investment,
there may be multiple equilibria, the capital-labour ratio is not necessarily higher for a
lower interest rate, and changes in the rate of interest out of equilibrium may be so strong
that they question the validity of the theory.
If we put aside the loanable funds theory, due prominence can be given to Keynes's idea that
the rate of interest is a highly conventional phenomenon. It opens the way for levels of rates
of interest that are shaped by monetary authorities that affect income distribution, and this
possibility casts a different light on the purposes and channels of transmission of the
monetary policies. Of course, monetary policy is not advanced in a vacuum but takes into
account the course of money wages and, more generally, the economic and financial conditions of
the country involved. Yet, the benchmark rate to which monetary authorities anchor their
decisions does not appear to reflect "fundamental forces" acting independently of monetary
factors, and therefore those decisions cannot be conceived simply as a technical device used to
find out the "true" natural interest rate.
Summing up, estimates of the NRI are misleading both on empirical and theoretical grounds
and monetary policy is not neutral, primarily because it may influence the division of the
surplus product among different classes and social groups. Quite paradoxically, however, the
tricky nature of those estimates, with their consequent downward revision during the crisis due
to their sensitivity to current economic conditions, has been used by Central Banks to pursue a
regime of low interest rates that was required by the macroeconomic situation of industrialized
countries after the 2008 crisis. The cost of doing this has been to hide the asymmetric effects
and delay in the transmission of monetary policy, since the scant reactivity of output to the
fall in interest rates has been explained precisely by appeals to an alleged fall in the
natural rate of interest even to negative values due to reaching the zero-lower bound for
policy nominal interest rates. This makes a murky business even more opaque.
"A first problem is that, while the "benchmark rate" ought to be based on sound
theoretical foundations that allow a meaningful interpretation of its behaviour, all sorts of
definitions of it appear in the literature when assuming real shocks away from balanced
growth."
Has anyone ever shown that in fact the diff eqs being used actually are insensitive to
small perturbations? That the solutions are actually numerically stable? If they're not --
and in general, this is something that has to be shown for the constrained parameters -- the
rest is a waste.
If it's not a concave system, but the solutions are saddle points, for example given the
number of parameters and the equations steady state solutions don't require "shocks" at all
to be unstable but are inherently unstable. And most systems are unstable
All systems with non-linear feedback (eg: Fear and Greed), are Chaotic, not Unstable. A
system with Unstable but not Chaotic behavior falls to a predictable state.
It is arguable that Greed is feed-forward, possibly in all cases. Fear is both, feed
forward and feedback. For example fear of the unknown is feed forward, fear of loss generally
feedback.
A classic fear which is both, feed forward and feedback, is fear of unwanted pregnancy. It
is well know that fears of unwanted pregnancy are always handled rationally. /s.
Chaotic would mean no discernible pattern. Unstable would mean it has patterns that lurch
from some state to some other state, but which are discernible.
I'm very rusty, but I do believe that money, or capital, is itself a good, so it follows
that an interest rate is little more than the price of money. And which rate is the natural
rate, the inter bank rate, mortgage rates, brokers call, maybe the whatever a payday lender
charges? All those rates just reflect different markets, or am I really wrong?
This article is implying that there is no natural rate of interest.
That would imply that money is not subject to the laws of supply and demand so is not a
good.
Accepting that would kick away one of the pillars of Liberalism and neoclassical
economics. It would also reveal that money and capital are not equivalent, except to a
banker.
He gets close to saying that the idea is sheer ideology, serving a normalizing function
kind of like the "state of nature" in classical political theory, e.g. Rousseau or Locke,
that would be used to justify a set of political institutions. But he won't allow himself a
paragraph to step away from econospeak long enough for the point to become fully salient.
Amen. The fundamental flaw is the concept of perpetual growth. Lots of fancy words for a
pseudo science. At least meteorological predictions get judged, not fudged.
You could write that question as the epitaph to the entire field of what we know as
Standard Economics. Real question:does anyone care?
[Jan 29, 2019] A State of Neoliberalism by Kevin "Rashid" Johnson (New African Black Panther Party)
Highly recommended!
References omitted
Notable quotes:
"... "number of refugees and displaced persons increased dramatically over the decade, doubling from 2007 to 2015, to approximately 60 million people. There are nine countries with more than 10 per cent of their population classified as refugees or displaced persons with Somalia and South Sudan having more than 20 per cent of their population displaced and Syria with over 60 per cent displaced." ..."
"... In The Road to Serfdom ..."
"... The Road to Serfdom ..."
"... When, in 1947, Hayek founded the first organisation that would spread the doctrine of neoliberalism -- the Mont Pelerin Society -- it was supported financially by millionaires and their foundations ..."
"... Masters of the Universe ..."
"... As an ideology, neoliberalism borrows heavily from Trotskyism. "One can view neoliberalism as Trotskyism refashioned for elite ..."
"... proletarians of all countries unite ..."
"... neoliberal elites of all countries unite. ..."
"... Today Trotskyism no more confines itself to "informing" the bourgeoisie. Today Trotskyism is the center and the rallying point for the enemies of the Soviet Union, of the proletarian revolution in capitalist countries, of the Communist International. Trotskyism is trying not only to disintegrate the dictatorship of the proletariat in the Soviet Union, but also to disintegrate the forces that make for the dictatorship of the proletariat the world over. ..."
"... The Origins and Doctrine of Fascism ..."
"... Donald Trump is a visible product of this culture, but clearly is not the choice of the elite ruling class to serve as their "front man" for President. Rather, his role seems to have been to polarize the electorate in such a way as to assure Hillary Clinton the election, just as Bernie Sanders played a role of mobilizing the left-neoliberal camp and then sheep-dogging it into Hillary's camp. ..."
"... Bernie Sanders is this election's Democratic sheepdog. The sheepdog is a card the Democratic party plays every presidential primary season when there's no White House Democrat running for re-election. ..."
"... "An extraordinary feature of the U.S. electoral process is that the two dominant parties collude to dictate – via their own bipartisan "commission" – who is allowed to participate in the officially recognized presidential debates. Needless to say, the two parties set impossible barriers to the participation of any candidates other than their own . Most potential voters are thereby prevented from acquainting themselves with alternatives to the dominant consensus. ..."
"... Citizens United ..."
"... as deep in the shadows as possible ..."
"... Former president Jimmy Carter said Tuesday on the nationally syndicated radio show the Thom Hartmann Program that the United States is now an "oligarchy" in which "unlimited political bribery" has created "a complete subversion of our political system as a payoff to major contributors ..."
The fundamental difference between socialism and capitalism is not simply a question of
private vs. state ownership of the means of production but of the nature of the state itself.
This is because the state is an instrument of class dictatorship. In this epoch, the state will
be either a dictatorship of the bourgeoisie or a dictatorship of the proletariat. The
dictatorship of the proletariat has only one rationale for its existence which is to transform
class society into classless society and the state into a non-state that will wither away as
classless society is achieved. However, there is a great danger of the dictatorship of the
proletariat transforming back into a dictatorship of the bourgeoisie and thereby restoring
capitalism, so long as classes continue to exist under socialism.
Class struggle intensifies under socialism, and will until the basis of class divisions no
longer continues to be present. Communism is necessarily a global system, stateless and
classless and without national boundaries. At this stage in the evolution of
capitalist-imperialism, independent national states have ceased to exist as the global
capitalist system becomes ever more hegemonic. In this period the World Proletarian Socialist
Revolution cannot simply liberate one country at a time and meanwhile peacefully co-exist with
the global capitalist system. Rather we must wage revolution globally to defeat
capitalist-imperialism and achieve a global dictatorship of the proletariat. A system of global
revolutionary intercommunalism would be the logical form for this proletarian dictatorship.
The U.S. Military is deployed globally with bases in the majority of countries and
"partnership" arrangements to train and advise most of the world's armed forces. The U.S. is
the dominant force in NATO and of the United Nations' armed forces. A recent report by the
Institute for Economics and Peace found a mere ten nations on the planet are not at war and
completely free from conflict. The report cites an historic 10-year deterioration in world
peace, with the "number of refugees and displaced persons increased dramatically over
the decade, doubling from 2007 to 2015, to approximately 60 million people. There are nine
countries with more than 10 per cent of their population classified as refugees or displaced
persons with Somalia and South Sudan having more than 20 per cent of their population displaced
and Syria with over 60 per cent displaced."[1] According to the report, the
United States spends an outrageously high percentage of the globe's military expenditures -- 38
percent -- while the next largest military spender, China, accounted for considerably less, 10
percent of the global share. [2]
The principle contradiction in the world today is between the need of the monopoly
capitalist ruling class to consolidate its global hegemony and the chaos and anarchy (including
the threat of a Third World War) it is unleashing by attempting to do so. The so-called "War on
Terrorism" is but a front for capitalist-imperialism's aggressive attempts to consolidate its
global bourgeois dictatorship and subordinate every country to its hegemonic control. The
essence of communism is community, and capitalist-imperialism is the antithesis of community,
particularly under neo-liberalism, which is the final stage of imperialism. As George Monbiot
explained:
"The term neoliberalism was coined at a meeting in Paris in 1938 . Among
the delegates were two men who came to define the ideology, Ludwig von Mises and Friedrich
Hayek. Both exiles from Austria, they saw social democracy, exemplified by Franklin Roosevelt's
New Deal and the gradual development of Britain's welfare state, as manifestations of a
collectivism that occupied the same spectrum as nazism and communism.
" In The Road to
Serfdom , published in 1944, Hayek argued that government planning, by crushing
individualism, would lead inexorably to totalitarian control . Like Mises's book
Bureaucracy ,
The Road to Serfdom was widely read. It came to the attention of some very wealthy
people, who saw in the philosophy an opportunity to free themselves from regulation and tax.
When, in 1947, Hayek founded the first organisation that would spread the doctrine of
neoliberalism -- the Mont Pelerin Society -- it was supported financially by millionaires and
their foundations .
"With their help, he began to create what Daniel Stedman Jones describes in Masters of the
Universe as "a kind of neoliberal International": a transatlantic network of
academics, businessmen, journalists and activists. The movement's rich backers funded a
series of think tanks which would refine and promote the ideology. Among them were the
American Enterprise Institute, the Heritage Foundation, the Cato Institute, the Institute of
Economic Affairs, the Centre for Policy Studies and the Adam Smith Institute. They also
financed academic positions and departments, particularly at the universities of Chicago and
Virginia.
"As it evolved, neoliberalism became more strident. Hayek's view that governments should
regulate competition to prevent monopolies from forming gave way, among American apostles
such as Milton Friedman, to the belief that monopoly power could be seen as a reward for
efficiency." [3]
As an ideology, neoliberalism borrows heavily from Trotskyism. "One can view
neoliberalism as Trotskyism refashioned for elite . " [4] Instead of "
proletarians of all countries unite " we have [the] slogan "
neoliberal elites of all countries unite. " [5] Stalin purged Trotsky, but
some of his disciples made the transition to become founding intellectuals of neoliberal
ideology, and in particular its "neo-conservative" wing. "Neoliberalism is also an example of
emergence of ideologies, not from their persuasive power or inner logic, but from the private
interests of the ruling elite. Political pressure and money created the situation in which
intellectually bankrupt ideas could prevail much like Catholicism prevailed during Dark Ages in
Europe. In a way, this is return to Dark Ages on a new level." [6]
Trotsky's elitism and contempt for the masses led naturally to neoliberalism. As M.J. Olgin
pointed out: Today Trotskyism no more confines itself to "informing" the bourgeoisie.
Today Trotskyism is the center and the rallying point for the enemies of the Soviet Union, of
the proletarian revolution in capitalist countries, of the Communist International. Trotskyism
is trying not only to disintegrate the dictatorship of the proletariat in the Soviet Union, but
also to disintegrate the forces that make for the dictatorship of the proletariat the world
over.[7]
Neoliberalism also borrows from the ideology of fascism. As Giovanni Gentile, "The
Philosopher of Fascism" expressed in a quote often attributed to Mussolini: "Fascism should
more properly be called corporatism , since it is the merger of state and corporate power."
Gentile also stated in The Origins and Doctrine of Fascism , that "mankind only
progresses through division, and progress is achieved through the clash and victory of one side
over another." [8]
Neoliberalism is a new form of corporatism based on the ideology of market fundamentalism,
dominance of finance and cult of rich ("greed is good") instead of the ideology on racial or
national superiority typical for classic corporatism. Actually, some elements of the idea of
"national superiority" were preserved in a form superiority of "corporate management" and top
speculators over other people. In a way, neoliberalism considers bankers and corporations top
management to be a new Aryan race. As it relies on financial mechanisms and banks instead of
brute force of subduing people the practice of neoliberalism outside of the G7 is also called
neocolonialism. Neoliberal practice within G7 is called casino capitalism, an apt term that
underscore [s] the role of finance and stock exchange in this new social order. Neoliberalism
is an example of emergence of ideologies not from their persuasive power or inner logic, but
from the private interests of ruling elite. Political pressure and money created the
situation in which intellectually bankrupt ideas could prevail .
Neoliberalism is not a collection of theories meant to improve the economy. Instead, it
should be understood as a class strategy designed to redistribute wealth upward toward an
increasingly narrow fraction of population (top 1%). It is the Marxist idea of "class
struggle" turned on its head and converted into a perverted "revolt of the elite,"
unsatisfied with the peace of the pie it is getting from the society. While previously
excessive greed was morally condemned, neoliberalism employed a slick trick of adopting
"reverse," Nietzschean Ubermench morality in bastartized form propagated in the USA under the
name of Randism. [9]
This neoliberal transformation of the society into a top 1% (or, more correctly, 0.01%)
"have and have more" and "the rest" undermined and exploited by financial oligarchy with near
complete indifference to what happens with the most unprotected lower quintile of the
population. The neoliberal reformers don't care about failures and contradictions of the
economic system which drive the majority of country population into abject poverty, as it
happened in Russia. Nor do they care about their actions such as blowing financial bubbles,
like in the USA in 2008 can move national economics toward disaster. They have a somewhat
childish, simplistic "greed is good" mentality: they just want to have their (as large as
possible) piece of economic pie fast and everything else be damned. In a way, they are
criminals and neoliberalism is a highly criminogenic creed, but it tried to conceal the
racket and plunder it inflicts of the societies under the dense smoke screen of "free market"
newspeak.
That means that in most countries neoliberalism is an unstable social order as plunder
can't continue indefinitely. It was partially reversed in Chile, Russia, and several other
countries. It was never fully adopted in northern Europe.
One can see an example of this smoke screen in Thatcher's dictum of neoliberalism: "There
is no such thing as society. There are only individuals and families." In foreign policy
neoliberalism behaves like brutal imperialism which subdue countries either by debt slavery
or direct military intervention. In a neoliberal view the world consist of four concentric
cycles which in order of diminishing importance are .
Finance
Economics
Society
Planet
Finance is accepted as the most important institution of the civilization which should
govern all other spheres of life. It is clear that such a one-dimensional view is wrong, but
neoliberals like communists before them have a keen sense of mission and made its "long march
through the institutions" and changed the way Americans think (Using the four "M" strategy --
money, media, marketing, and management)
A well-oiled machine of foundations, lobbies, think-tanks, economic departments of major
universities, publications, political cadres, lawyers and activist organizations slowly and
strategically took over nation after nation. A broad alliance of neo-liberals,
neo-conservatives and the religious right successfully manufactured a new common sense,
assaulted Enlightenment values and formed a new elite, the top layer of society, where this
"greed is good" culture is created and legitimized. [10]
Donald Trump is a visible product of this culture, but clearly is not the choice of the
elite ruling class to serve as their "front man" for President. Rather, his role seems to have
been to polarize the electorate in such a way as to assure Hillary Clinton the election, just
as Bernie Sanders played a role of mobilizing the left-neoliberal camp and then sheep-dogging
it into Hillary's camp. As Bruce A. Dixon explained:
" Bernie Sanders is this election's Democratic sheepdog. The sheepdog is a card the
Democratic party plays every presidential primary season when there's no White House Democrat
running for re-election. The sheepdog is a presidential candidate running ostensibly to
the left of the establishment Democrat to whom the billionaires will award the nomination.
Sheepdogs are herders, and the sheepdog candidate is charged with herding activists and
voters back into the Democratic fold who might otherwise drift leftward and outside of the
Democratic party, either staying home or trying to build something outside the two-party
box." [11]
Once you realize what the principle contradiction in the world is, and how the game of
bourgeois "democracy" is played, the current election become as predictable and blatantly
scripted as professional wrestling. As Victor Wallace explained:
"An extraordinary feature of the U.S. electoral process is that the two dominant
parties collude to dictate – via their own bipartisan "commission" – who is
allowed to participate in the officially recognized presidential debates. Needless to say,
the two parties set impossible barriers to the participation of any
candidates other than their own . Most potential voters are thereby prevented from
acquainting themselves with alternatives to the dominant consensus.
"This practice has taken on glaring proportions in the 2016 campaign, which has been
marked by justified public distrust of both the dominant-party tickets. Preventing
election-theft would initially require breaking up the bipartisan stranglehold over who can
access the tens of millions of voters.
"Another distinctive U.S. trait is the absence of any constitutional guarantee of the
right to vote. Instead, a multiplicity of state laws govern voter-eligibility, as well as
ballot-access. A few states set ballot-access requirements so high as to effectively
disqualify their residents from supporting otherwise viable national candidacies. As for
voter-eligibility, it is deliberately narrowed through the time-honored practice of using
"states' rights" to impose racist agendas. Most states deny voting rights to ex-convicts, a
practice that currently disenfranchises some 6 million citizens, disproportionately from
communities of color. More recently, targeting the same constituencies, many states have
passed onerous and unnecessary voter-ID laws.
"The role of money in filtering out viable candidacies is well known. It was reinforced
by the Supreme Court'sCitizens Uniteddecision of 2010, which opened
the gate to unlimited corporate contributions.
"The priorities of corporate media point in a similar direction. Even apart from their
taste for campaign-advertising, their orientation toward celebrity and sensationalism prompts
them to give far more air-time to well known figures – the more outrageous, the better
– than to even the most viable candidates who present serious alternatives. Trump's
candidacy was thus "made" by the media, even as they kept the Sanders challenge to
Clintonas deep in the shadows as
possible." [12]
Moreover, the media, which in the U.S. is 90% owned by just six mega-corporations,
[13]
cooperates closely with the dominant establishment of the two parties in framing the questions
that are posed in the debates. And they explicitly maintain the fiction that the "commission"
running the debates is "non-partisan" when in fact it is bipartisan. [14]
"Turning finally to the voting process itself, the longest-running scandal is the
holding of elections on a workday. In recent years, the resulting inconvenience has been
partially offset by the institution of early voting, which however has the disadvantage of
facilitating premature choices and of being subject to varied and volatile rules set by state
legislatures.
"The actual casting of votes on Election Day is further subject to a number of possible
abuses. These include: 1) insufficient polling places in poor neighborhoods, sometimes
resulting in waiting periods so long that individuals no longer have the time to vote; 2) the
sometimes aggressive challenging of voters' eligibility by interested parties; 3) the use of
provisional ballots which may easily end up not being counted; and 4), perhaps most
significantly, the increasingly complete reliance on computerized voting, which allows for
manipulation of the results (via "proprietary" programs) in a manner that cannot be detected.
(The probability of such manipulation – based on discrepancies between exit-polls and
official tallies – was documented by Marc Crispin Miller
in his book on the 2004 election.
"The corporate media add a final abuse in their rush – in presidential races
– to announce results in some states before the voting process has been completed
throughout the country." [15]
Despite multiple releases of hacked e-mails by WikiLeaks revealing the whole process in
detail, it seems to have little effect on the masses or on the game. The most recent batch come
from Obama's personal e-mail account and reveal that the Bush administration contacted the
future president multiple times before the election in 2008, secretly organizing the transition
of power. In one e-mail President Bush states:
" We are now at the point of deciding how to staff economic policy during the
transition, who should be the point of contact with Treasury and how to blend the transition
and campaign economic policy talent.
Normally these decisions could be made after the election, and ideally after the
selection of a National Economic Advisor, but, of course, these are not normal times. "
[16]
.... ... ...
The illusion of "democracy" is wearing thin:
Former president Jimmy Carter said Tuesday on the nationally syndicated radio show the
Thom Hartmann Program that the
United States is now an "oligarchy" in which "unlimited political bribery" has created "a
complete subversion of our political system as a payoff to major contributors ." Both
Democrats and Republicans, Carter said, "look upon this unlimited money as a great benefit to
themselves."
Carter was responding to a question from Hartmann about recent Supreme Court decisions on
campaign financing like Citizens United .
Transcript:
HARTMANN: Our Supreme Court has now said, "unlimited money in politics." It seems like
a violation of principles of democracy. Your thoughts on that?
CARTER: It violates the essence of what made America a great country in its political
system. Now it's just an oligarchy, with unlimited political bribery being the essence of
getting the nominations for president or to elect the president. And the same thing applies
to governors and U.S. senators and congress members. So now we've just seen a complete
subversion of our political system as a payoff to major contributors, who want and expect
and sometimes get favors for themselves after the election's over. The incumbents,
Democrats and Republicans, look upon this unlimited money as a great benefit to themselves.
Somebody's who's already in Congress has a lot more to sell to an avid contributor than
somebody who's just a challenger . [21]
... ... ...
Kevin "Rashid" Johnson is the Minister of Defense, New African Black Panther Party
(Prison chapter)
Newly elected Representative Alexandria Ocasio-Cortez recently
said that Modern Monetary Theory (MMT) absolutely needed to be "a larger part of our
conversation." Her comment shines a spotlight on MMT. So what is it? According to Wikipedia , it is:
"a macroeconomic theory that describes the currency as a public monopoly and unemployment as
the evidence that a currency monopolist is restricting the supply of the financial assets
needed to pay taxes and satisfy savings desires."
It is uncontroversial to say that the Federal Reserve has a monopoly on the dollar. So let's
look at the second proposition. Unemployment, MMT holds, is evidence that the supply of dollars
is restricted.
In other words, more money causes more employment!
This does not sound very different from what the New Keynesians say. Keith analyzed former
Fed Chair Janet Yellen's seminal paper on the economics of labor for
Forbes :
"Here is their [Yellen and co-author Ackerloff] tenuous chain of logic:
Disgruntled employees don't work hard, and may even sabotage machinery.
So companies must overpay to keep them from slacking.
Higher pay per worker means fewer workers, because companies have a finite budget.
Yellen concludes -- you guessed it:
inflation provides corporations with more money to hire more people."
As a footnote, MMT is referred to as neo-Chartalism, and there is some evidence that Keynes
was influenced by Chartalism (which goes back to at least
1905).
On Thursday, Marketplace published a piece on
MMT . Things are heating up for this hot new (old) idea. Marketplace presented a "bathroom
sink" model of the economy (yes, really!)
To wrap your brain around this concept, picture a bathroom sink. Think of the government and
its ability to create more money whenever it needs to as the faucet and that bucket area of the
sink where the water goes as the economy.
The government controls how much money, or water, is flowing into the economy. It spends
money into the economy by building interstates or paying farm subsidies or funding
programs.
"And so as those dollars reach the economy, they begin to fill up that bucket, and what you
want to do is be very mindful about how full that bucket is getting or you're going to get an
inflation problem," [Bernie Sanders economic advisor Stephanie] Kelton said.
Inflation is where the sink overflows. If that happens, Kelton said there are two ways to
fix it: "You can slow the flow of dollars coming into that bucket. That means the government
then has to start slowing it's [sic] rate of spending, or you can open up the drain and let
some of those dollars out of the economy. And that's what we do when we collect taxes."
This sounds a lot like the Quantity Theory of Money (QTM). This view often paints a picture
of pouring water into a container. The higher the water level, the higher the general price
level.
QTM by itself does not promote the idea that more money causes more employment. Only that
more money causes more rising prices. But Keynes did. And the New Keynesians like Yellen
do.
So what makes MMT unique?
According to Stephanie Kelton, in the Marketplace article:
"If you control your own currency and you have bills that are coming due, it means you can
always afford to pay the bills on time," Kelton said. "You can never go broke, you can never be
forced into bankruptcy. You're nothing like a household."
Keynes taught us about government deficits to bolster employment and government deficits to
respond to a crisis. MMT teaches us how to get to the next level. The voters want free goodies.
Traditional economics says "there ain't no such thing as a free lunch."
MMT says "oh yes there is!"
At least until you get to too much inflation . The Monetarists would agree, don't print too
much money or you get too much inflation . Much of the gold community also agrees. If you print
too much money, then you get skyrocketing inflation .
Never mind that this prediction was proven wrong in the post-2008 policy response. We want
to highlight that the Keyesians, the Monetarists, the MMTers, and even many Austrians largely
agree. The problem with too much money printing is too much inflation . They quibble about what
is too much, but they agree on the "bathroom sink" model of the economy.
In the words of early 20 th century physicist Wolfgang Pauli, QTM "is not even
wrong ."
We define inflation as the counterfeiting of credit. That is, fraudulently taking money from
a saver. It is called borrowing , but the borrower hasn't got the means or intent to repay.
Additionally, when everyone thinks that the government's debt paper is money , the saver
doesn't even know or consent to the borrowing.
There are lies, damnlies, and statistics. Then there are a few pugnacious, in your face,
gaslighting make-you-believe-in-unreality cargo cults. We will explore this in full, below.
During World War II, the US military set up operations on certain Pacific islands. They
built landing strips, where they landed planes bringing in supplies and men. They hired the
local tribesmen as labor, and paid them stuff that was ordinary to Americans, but wondrous to
the islanders. Like canned food. The islanders really looked forward to when a plane would
land, and they would get some cargo.
After the war, the US military pulled up stakes and left. But the islanders still wanted the
cargos. So they set up these elaborate charades, with tiki torches instead of flashlights, and
coconut shell mockup headphones. They went through the motions that they thought the Americans
did. To try to bring back the cargos.
Huh. What does that remind you of? An elaborate charade, with bogus props, going through the
motions of a civilization they don't understand to try to produce desired results -- free
goodies?
Modern Monetary Theory is a cargo cult.
It's ironic that the name includes the word modern . If we said that a pile of greasy rags
sealed in a dark closet would spontaneously generate rats, would you call that a modern theory?
If we said that sickness is caused by bad humors, and the cure is bloodletting by leaches,
would you say this is modern ? How about the idea that the Sun and the planets orbit the Earth.
Is this modern , too?
Not only are these not modern -- they are, in fact, old ideas that were tossed into the
garbage heap -- they are not theories either. A theory is an explanation of reality, which
integrates many observed facts and contradicts none. Modern Monetary Theory is neither modern
nor a theory .
MMT is not an attempt to explain reality, but to deny it.
Even a child understands something. Even people in the ancient world understood it, too. If
you lend a bushel of wheat to your neighbor, and he does not repay it, you suffer a loss. You
are worse off, compared to before. And so is the borrower (who at the least ruins his
credit).
MMT is based on denying this universal truth. Common sense says that if Peter lends to Paul,
and Paul does not repay, then Peter is impoverished. Common sense says that Peter would not
lend to Paul if he knew that Paul would renege on his obligation.
MMT says that a modern economy has a modern currency, which is just the state's paper. And
in a modern economy, the modern state can print more with no concerns other than "overflowing
the bathroom sink". Get that, the only concern is prices could rise too fast. And so long as
this does not occur, then the state can get away with it. Only, there is nothing to get away
with. It's perfectly fine.
In a cargo cult, the people did not recognize the difference between fake coconut shell
headphones, and real headphones. Or flashlights and tiki torches. So they made crude copies as
best they could. They went through the motions to summon the sky gods to come down to earth,
with cargo.
Let's look at the mental gymnastics. They imbued magical -- that is outside the principle of
cause and effect -- characteristics to their props. Failing to understand that airplanes are
created by men, and that it takes a great deal of planning (not to mention wealth) to fly a
plane full of cargo from America to the middle of the Pacific, they imagined that, somehow, the
act of using the headphones and the flashlights caused the plane and its cargo to come. The
headset is tokenized, viewed as a magical talisman.
What a cargo cult does to headphones, MMT does to money. First, the cargo cult substitutes
coconut shells held together with twisted vine for headphones. What they wear when attempting
to summon the sky gods is not a headset, but a surrogate. MMT (as does Keynesianism and
Monetarism) substitutes government debt paper for money.
As an aside, even a gold-redeemable certificate is not money. Think about it. You can bring
this piece of paper to the teller window. You push it across the counter. The teller pushes
back the gold coin. If the word for the paper is money, then what is the word for the gold for
which it redeems?
Anyways, modern monetary systems use irredeemable paper. It's not gold-redeemable, but even
worse. And they treat this paper as if it were money .
And it goes even farther. Previous theories felt the need to at least pay lip service to
repaying debt. They couldn't quite get to the point of openly admitting that the debt is never
to be repaid. Keynes famously quipped that, "in the long run, we are all dead," creating
ambiguity about the intention to repay. Monetarists generally promote the idea that if the
economy grows fast enough, the debt will shrink as a proportion of GDP.
The Keynesians don't have the intention to repay. And the Monetarists don't look at
Marginal
Productivity of Debt , which would show them that their idea isn't working. But they don't
go as far as the MMT'ers.
MMT says that the government is unlike deadbeat-debtor Paul. There is no need for the
government to repay. It's the same as the cargo cult. The cargo cult has no concept for
capital. The islanders do not produce in excess of what they consume, accumulating tools and
technology to increase their productivity. They subsist, and assume that this is how the world
works.
MMT has no concept for capital either. It puts blinders on, declaring that consumer prices
are the only thing to measure. The only risk is if they rise too fast. And the MMT'ers refuse
to see anything else.
In our discussion of Yield Purchasing Power , we
introduced a farmer who sells off the back 40 (acres), chops down the apple orchard to sell the
fruitwood, tears down the old barn to sell the planks, and even dismantles the tractor. And why
does he do this? He gets cash in exchange. And the cash is far in excess of his crop yield. Why
struggle and sweat to produce $20,000 a year by growing food, when you can sell off the piece
of the farm for $20,000,000.
The monetary system incentivizes the farmer to trade productive capital for paper credit
slips. The incentive is that this paper has a greater purchasing power than what he can earn by
operating the farm. He can trade his farm for far more groceries, than the food he could grow
on it.
This is the same old game. But MMT gives it a new name -- and asserts a bolder defense.
MMT'ers don't want to see, and they want you not to see, that the lender gives up good capital
but the borrower is just consuming it.
MMT justifies the naked consumption of capital.
Supply and Demand Fundamentals
The prices of the metals rose this week, especially on Friday. The exchange rate of gold
went up twenty two US dollars, and that of silver 41 US cents.
As we will discuss below, we think that there is a rethinking of gold occurring in the
market. And we don't just mean celebrities like Sam Zell buying gold for the first time.
There is a sense of déjà vu. Starting in mid-2004, the Fed went on one of its
rate-hiking sprees. It did not manage to get as high as the previous peak of 6.5%, set prior to
the previous crisis. In 2006, this rate topped out at 5.25%. In both the crisis of 2001, and
the crisis of 2008, the Fed had begun cutting rates before the official indication of recession
, and the cuts occurred more rapidly than the preceding hikes.
The cuts were too little and/or too late to avert disaster.
The problem is that during the period of low rates, firms are incentivized to borrow. They
finance projects which generate a low rate of return. These projects would not be financed, but
for the even-lower cost of borrowing. When rates rise, it does not increase the rate of return
produced by marginal projects (likely the opposite). So borrowers are squeezed.
The Fed eventually comes along with its fix -- even lower rates. While this is too late to
save firms that are teetering into default, it does enable the next wave of borrowing for
even-poorer-projects.
And now, here we are. Since its first tepid hike in December 2005, the Fed has been hiking
for just over three years so far. It has hit a rate well under half of the peak of 2006-2007.
The president has publicly urged the Fed to reverse policy course. And the Fed said it is
listening to the market, and may have paused hiking for now.
Meanwhile, the Fed Funds rate may be lower than the previous peak but it is much higher than
it was from the end of 2008 through the end of 2015. For seven years, it was basically zero.
Nobody knows how many dollars' worth of projects were financed that were only justified, only
possible, due to this zero interest-rate policy. But it was surely a lot (we would guess at
least trillions).
And now the rate is up to 2.25%. Many of those projects are no longer justified, and can no
longer service the debt that finances them.
And none of this is a secret. It is well known to the borrowers, of course. And their
creditors. And the Fed. And hedge funds and other sophisticated speculators. And not just in
general theory, but lists of specific companies and the rollover dates of their bond
issues.
Rollover is key to this. After decades of falling interest, everyone has learned the game of
using short-term financing. But the risk is that it must be rolled over. And when it is rolled,
the previous low-rate is replaced with the higher, current rate. And that's when we find out
which businesses can still pay.
So what will the Fed do? The next programs will have a new name, but the Fed must lower the
cost of capital if it wants to keep the game going.
Is this time going to be the total collapse of the dollar? We don't believe so, as there is
still a lot of capital remaining and more is flooding in as people abandon the
dollar-derivative currencies. So we think of it as déjà vu, the Fed is likely to
do something similar to last time.
And that is an environment where even the non-goldbugs see clear and compelling arguments
for owning gold.
It could be that the timing is not now. It could be that it will take months or years to
arrive at this point. We make no predictions of timing. However, we note that the Monetary
Metals Gold Fundamental Price has been in a rising trend since mid-October. Its low was on
October 9 ($1,266).
Silver is similar, but a bit different. The low in its fundamental occurred in late November
($14.37). But it's up like a rocket since then, now about two bucks higher.
We are at an interesting point.
Let's take a look at the only true picture of the supply and demand fundamentals of gold and
silver. But, first, here is the chart of the prices of gold and silver.
Can the elite be afflicted by some mass disease. Is Neoconservatism a deadly infection ?
Theoretically Democracy depends on information freely available and responsibility of the citizenry to make decisions based on
that information. The political elites have made certain precious little of reliable, unclouded and relevant information ever gets
broadcast even while popularizing, promoting and rewarding every form of misrepresentation, ignorance and irresponsibility. In
other words they spearheaded a dangerous disease to stay in power. And eventually got infected themselves.
Notable quotes:
"... "But what if the elites get things wrong? What if the policies they promulgate produce grotesque inequality or lead to permanent war? Who then has the authority to disregard the guardians, if not the people themselves? How else will the elites come to recognize their folly and change course?" ..."
"... That is how they maintain control and manipulate government to facilitate their own interests to the detriment of the rest of society. Bretix and President Trump have upset their apple cart, which they felt certain was invulnerable and immune to challenge. ..."
"... The elites aren't interested in polls showing Americans want out of Syria and Afghanistan, are they? Can't have mere citizens having influencing decisions like that. ..."
"... An excellent piece. I would add only that the so-called elites mentioned by Mr Bacevich are largely the products of the uppermost stratum of colleges and universities, at least in the USA, and that for a generation or more now, those institutions have indoctrinated rather than educated. ..."
"... As their more recent alumni move into government, media and cultural production, the primitiveness of their views and their inability to think - to say nothing of their fundamental ignorance about our civilization other than that it is bad and evil - begin to have real effect. ..."
"But what if the elites get things wrong? What if the policies they promulgate produce
grotesque inequality or lead to permanent war? Who then has the authority to disregard the
guardians, if not the people themselves? How else will the elites come to recognize their
folly and change course?"
What if, on election day, you only have a choice between 2 candidates. Both favoring all
the wrong choices, but one tends to talk up Christianity and family and the other talks up
diversity.
And both get their funding from the very wealthy and corporations. And any 3rd choices
would be "throwing your vote away". How would you ever get to vote for someone who might
change course?
Democracy has little to actually do with choice or power.
mlopez, January 18, 2019 at 6:22 pm
GB may not have been any utopia in 1914, but it was certainly geo-politically dominant. It's common people's social,
economic and cultural living standards most assuredly was vastly improved over Russian, or European peasants. There can be no
serious comparison with third world countries and regions.
As for the US, there can be absolutely no debate about its own dominance, or material standard of living after 1945 as
compared to any where else in the world. More importantly, even uneducated and very contemporary observers were capable of
recognizing how our elites had sold out their interests in favor of the furtherance of their own.
If we are on about democratic government, then it's been generations since either country and their peoples have had any
real democracy. Democracy depends on information freely available and responsibility of the citizenry to make decisions based
on that information. The political elites have made certain precious little of reliable, unclouded and relevant information
ever gets broadcast even while popularizing, promoting and rewarding every form of misrepresentation, ignorance and
irresponsibility.
That is how they maintain control and manipulate government to facilitate their own interests to the detriment of the
rest of society. Bretix and President Trump have upset their apple cart, which they felt certain was invulnerable and immune
to challenge.
Hello / Goodbye, January 19, 2019 at 11:40 am
The elites aren't interested in polls showing Americans want out of Syria and Afghanistan, are they? Can't have mere
citizens having influencing decisions like that.
Patzinak, January 19, 2019 at 5:07 pm
What ineffable flummadiddle!
Prominent Brexiteers include Boris Johnson (dual UK/US citizenship, educated in Brussels and at Eton and Oxford, of mixed
ancestry, including a link - by illegitimate descent - to the royal houses of Prussia and the UK); Jacob Rees-Mogg (son of a
baron, educated at Eton and Oxford, amassed a solid fortune via hedge fund management); Arron Banks (millionaire, bankroller
of UKIP, made to the Brexit campaign the largest ever political donation in UK politics).
So much for "the elite" being against Brexit!
But the main problem with Brexit is this. Having voted by a slim margin in favour of Brexit, the Great British Public
then, in the general election, denied a majority to the government that had undertaken to implement it, and elected a
Parliament of whom, by a rough estimate, two thirds oppose Brexit.
It ain't that "the elite" got "things wrong". It's that bloody Joe Public can't make his mind what to do - and go through
with it.
Rossbach, January 20, 2019 at 2:14 pm
"Whether the imagined utopia of a dominant Great Britain prior to 1914 or a dominant America after 1945 ever actually
existed is beside the point."
It wasn't to restore any defunct utopia that led people to vote for Brexit or Donald Trump; it was to check the descent of
the Anglosphere into the totalitarian dystopia of forced multi-cultural globalism that caused voters to reject the EU in
Britain and Hillary Clinton in the US. It is because they believed that only with the preservation of their national
independence was there any chance or hope for a restoration of individual liberty that our people voted as they did.
Ratings System, January 17, 2019 at 1:27 pm
It's why they won't enjoy their privileges much longer. That stale charade can't and won't last.
We don't have a meritocracy. We have a pseudo-meritocracy with an unduly large contingent of aliens, liars, cheats,
frauds, and incompetents. They give each other top marks, speak each other's PC language, and hire each other's kids. And
they don't understand why things are falling apart, and why they are increasingly hated by real Americans.
A very nasty decade or two is coming our way, but after we've swept out the filth there will be a good chance that
Americans will be Americans again.
Paul Reidinger, January 17, 2019 at 2:03 pm
An excellent piece. I would add only that the so-called elites mentioned by Mr Bacevich are largely the products of
the uppermost stratum of colleges and universities, at least in the USA, and that for a generation or more now, those
institutions have indoctrinated rather than educated.
As their more recent alumni move into government, media and cultural production, the primitiveness of their views and
their inability to think - to say nothing of their fundamental ignorance about our civilization other than that it is bad and
evil - begin to have real effect. The new dark age is no longer imminent. It is here, and it is them. I see no way to
rectify the damage. When minds are ruined young, they remain ruined.
Jan 25, 2019 | #GiletsJaunes
, including rising minimum wage by 40%, defaulting on sovereign debt ("already repaid several times"), exiting the EU, suppressing
speed cameras on roads, banning plastic, weakening pharmaceutical companies, and exiting NATO
Frederic Py @ Frel_7 Dec 2018
No such thing as "official" demandS on a grassroots movement which started on a single issue and has no real figurehead. This
is just an attempt to politicize a headless movement
"... To this point, there is essentially zero evidence of the promised investment boom. There was respectable growth in investment in the first two quarters of 2018, but growth slowed to just 1.1 percent in the third quarter. ..."
"... In any case, there is zero evidence that the tax cut is leading to the sort of investment boom that will qualitatively boost the rate of productivity and GDP growth and provide workers with substantially higher pay. ..."
"... (irrational) confidence level is an important economic factor. ..."
"... What has been destructive in major recessions has not been "misdirected investment", it has been the leveraged and/or fraudulent financial manipulations which maximize profit but which cause rapid collapse when conditions turn bad. Again, interest rates have in practice not been a main factor in this. ..."
"... Keynes was adamantly against high interest rates and he favored usury laws: "the rate of interest is not self-adjusting at a level best suited to the social advantage but constantly tends to rise too high, so that a wise Government is concerned to curb it by statute and custom and even by invoking the sanctions of the moral law." The General Theory, p. 351. ..."
"... "The evidence is not consistent with the idea that central banks can control economies with interest rates." ..."
"... A much larger threat to world economies (than interest rates) is the huge capital investments in petroleum assets. At some point, those investments will need to be unwound in an orderly fashion but it doesn't seem that anyone is considering how to do that. ..."
(This piece was originally posted on my Patreon page .)
Jim Tankersley had a nice piece
in the New York Times last week pointing out that the tax cut pushed through by the Republicans in 2017 is leading to a sharp drop
in tax revenue. While this was widely predicted by most analysts, it goes against the Trump administration's claims that the tax
cut would pay for itself.
Looking at full-year data for calendar year 2018, Tankersley points out that revenue was $183 billion (5.6 percent) below what
the Congressional Budget Office (CBO) had projected for the year before the tax cut was passed into law. This is a substantial falloff
in revenue by any standard, but there are two reasons the picture is even worse than this falloff implies.
The first is that we actually did see a jump in growth in 2018 pretty much in line with what the Trump administration predicted.
The tax cut really did stimulate the economy. It put a lot of money in the economy (mostly going to those at the top) and people
spent much of this money. The result was that the growth rate accelerated from around 2.0 percent the prior three years to over 3.0
percent in 2018. (We don't have 4 th quarter data yet, which may be delayed by the shutdown, but growth should be over
3.0 percent.)
The jump in growth in 2018 means that the drop in revenue was not due to the economy being weaker than expected, it was due to
the fact that the tax rate had fallen by a larger amount than the boost to growth. In fairness to the Trump administration, they
had also projected a falloff
in revenue due to the tax cut in 2018, but not one that was as large as what we saw.
... ... ...
To this point, there is essentially zero evidence of the promised investment boom. There was respectable growth in investment
in the first two quarters of 2018, but growth slowed to just 1.1 percent in the third quarter. It is likely to be even weaker
in the fourth quarter due to the drop in world oil prices (less oil drilling), although we won't get these data until the shutdown
is over. In any case, there is zero evidence that the tax cut is leading to the sort of investment boom that will qualitatively
boost the rate of productivity and GDP growth and provide workers with substantially higher pay.
In this context, the deficits from the Trump tax cut are a problem. If the economy is bumping up against its limits and the labor
market is close to full employment, it means a much larger share of output is going to the consumption of the wealthy. That both
means less private consumption for everyone else, and it makes it more difficult to have major initiatives that involve substantial
spending, such as a Green New Deal or Medicare for All.
The long and short is that the revenue data for 2018 looks pretty bad on its face. It looks even worse on a closer examination.
...and perhaps this funny (American?) idea - that economics only exist in order to have some ''Boom'' going -- forever -- and
ever - (which everybody knows is NOT possible) - is the root of US problem??!
Deficits are not a problem, period. They are a benefit because they keep the boom going, just as lower interest rates forestall
a recession. Keynes pointed this out 80 years ago: "Thus the remedy for the boom is not a higher rate of interest but a lower
rate of interest! For that may enable the so-called boom to last. The right remedy for the trade cycle is not to be found in abolishing
booms and thus keeping us permanently in a semi-slump; but in abolishing slumps and thus keeping us permanently in a quasi-boom."
The General Theory of Employment, Interest and Money, p. 322.
Keeping us out of a recession/slump ought to be the focus of economic policy, not hypothetical questions about the economy
"bumping up against its limits" which anti-Keynesians have been obsessed with for years.
Keeping out of bubbles is what keeps us out of slumps (in most cases). The usual pattern is that as conditions improve people
put confidence where it does not belong and extend leverage, then financial collapse makes things look bad for everyone - the
general (irrational) confidence level is an important economic factor.
Interest rates have an effect on speculation - when rates are low people have to turn to riskier things to make money, and
leverage is cheap. Stock prices were very low in 1981 because interest rates were very high and they are very high now partly
because interest rates have been very low. The effect on speculation may be a valid reason to raise rates - of course the imaginary
threat of inflation is not.
But history indicates it is not a huge effect. The Fed did raise discount rate through 1928 and 1929 up to 6% and this did
not seem to slow the development of the stock-market bubble. It is unlikely that the Fed can kill a bubble or boom now by raising
at much lower levels. The housing bubble of 2006 was a matter of bad regulation. The Fed was involved in encouraging and then
disregarding the bubble, but not by manipulating interest rates. Greenspan was always a cheerleader of deregulation.
"Moreover, even if over-investment in this sense was a normal characteristic of the boom, the remedy would not lie in clapping
on a high rate of interest which would probably deter some useful investments and might further diminish the propensity to consume,
but in taking drastic steps, by redistributing incomes or otherwise, to stimulate the propensity to consume.
"It may, of course, be the case -- indeed it is likely to be -- that the illusions of the boom cause particular types of capital-assets
to be produced in such excessive abundance that some part of the output is, on any criterion, a waste of resources; -- which sometimes
happens, we may add, even when there is no boom. It leads, that is to say, to misdirected investment." The General Theory p.321
"Thus an increase in the rate of interest, as a remedy for the state of affairs arising out of a prolonged period of abnormally
heavy new investment, belongs to the species of remedy which cures the disease by killing the patient." The General Theory p.323.
Causing a recession in order to kill a bubble is madness.
I am not recommending killing a boom or bubble with interest rates. On the contrary I am always recommending against relying
on manipulating interest rates to regulate the economy, whether it is to prevent inflation, real or imaginary, or to stimulate
the economy in case of recession. While Keynes conjectured that interest rates could have effects, he certainly was very clear
in not expecting that they would be sufficient to control the business cycle - see pp. 319-320, the end of Ch. 12 and ch. 24.
What has been destructive in major recessions has not been "misdirected investment", it has been the leveraged and/or fraudulent
financial manipulations which maximize profit but which cause rapid collapse when conditions turn bad. Again, interest rates have
in practice not been a main factor in this.
"While Keynes conjectured that interest rates could have effects, he certainly was very clear in not expecting that they would
be sufficient to control the business cycle"
Really? Then why did he include "Interest" in the title of his magnum opus?
Keynes was adamantly against high interest rates and he favored usury laws: "the rate of interest is not self-adjusting
at a level best suited to the social advantage but constantly tends to rise too high, so that a wise Government is concerned to
curb it by statute and custom and even by invoking the sanctions of the moral law." The General Theory, p. 351.
Further, he railed against using high interest rates to limit the boom: "The austere view, which would employ a high rate of
interest to check at once any tendency in the level of employment to rise appreciably above the average of, say, the previous
decade, is, however, more usually supported by arguments which have no foundation at all apart from confusion of mind." The General
Theory, p. 327-8.
The rate of interest is critical to economic growth which is why the Fed's role is so important.
The evidence is consistent with what Keynes said about high interest rates - the high rates in the 70's to 80's failed to prevent
inflation but caused unemployment to go to 10.8%. The Fed failed utterly in both of its two objectives during that time. Since
2008 record low rates have not produced the claimed boost in investment and growth. This is especially obvious in Europe and Japan
where conditions are worse than in the US despite negative interest rates. This is also consistent with Keynes' expectation that
interest rates would not be sufficient to overcome variations in the perceived marginal efficiency of capital. The evidence is
not consistent with the idea that central banks can control economies with interest rates, or even that their actions are always
constructive. That idea was not Keynes'.
"The evidence is not consistent with the idea that central banks can control economies with interest rates."
That is a bridge too far, and Keynes disagrees:
"There is, indeed, force in the argument that a high rate of interest is much more effective against a boom than a low rate
of interest against a slump." The General Theory, p. 320.
Slowing a boom with higher interest rates is indeed feasible and that has been Fed doctrine for decades. Obviously, higher
interest rates reduce consumption and investment so growth must slow. The high inflation of the 1970s was due to the OPEC oil
shocks, not excessively rapid growth of the economy. In fact, growth had been faster in the 1960s with much lower inflation.
I understand why this economic discussion focuses only on interest rates but it leaves out a larger issue. That fact that,
on CNBC and elsewhere, financial analysts obsess over interest rates, taxes, and the price of oil in relation to the market illustrates
the cluelessness of the financial community. They all applaud "deregulation" without ever specifying which regulations. Do they
mean all regulations?
Trump's deregulation of methane emissions, for example, will create future costs that are exponentially larger than any immediate
savings to frackers and oil companies. That's just one example. Trump's environmental deregulatory agenda is stupidity writ large.
A much larger threat to world economies (than interest rates) is the huge capital investments in petroleum assets. At some
point, those investments will need to be unwound in an orderly fashion but it doesn't seem that anyone is considering how to do
that. Eventually, probably sooner than expected, a tipping point will be reached when mass realization of the threat climate
change poses to our survival generates a mass panicked exit from petroleum assets which will create a financial crash that dwarfs
what we saw in 2008.
Do you remember "Limits to Growth"? Doomsday scenarios have been around for a long time especially in regard to the national
debt which supposedly will cause the collapse of our economy sometime soon. I am skeptical about that.
"... the Davos crew is trying to combat populism, according to The Washington Post . It is kind of amazing that the rich people at Davos would not understand how absurd this is. ..."
"... The real incredible aspect of Davos is that so many political leaders and news organizations would go to a meeting that is quite explicitly about rich people trying to set an agenda for the world. ..."
"... It is important to remember, the World Economic Forum is not some sort of international organization like the United Nations, the OECD, or even the International Monetary Fund. It is a for-profit organization that makes money by entertaining extremely rich people. The real outrage of the story is that top political leaders, academics, and new outlets feel obligated to entertain them. ..."
"... Davos ought to be treated as a conspiracy against labor, representative government, environmental regulation and decent living standards, but of course our admiring national press corps doesn't see it that way -- their bosses attend, after all. ..."
"... It may be best to avoid the term "populist" because it tends to be applied indiscriminately to the likes of Trump and to leftist reformers. Or if it is used for Trump it should be "fake populist". Opposition to corporatist globalization can be populistic, but Trump's version so far has been mostly fake. ..."
"... Two kinds of populism: rightwing populism (which often looks like fascism) and leftwing populism. They are quite different critters and they don't have a lot to do with each other though they agree on a few things. ..."
"... People REALLY need to re-read 1984 & refresh their memories of Orwellian good-is-bad brainwashing ..."
"... Trump is a rightwing populist, but it is very confusing. In the US anyway and often in general, rightwing populists are NOT the enemies of the rich. Note Mussolini and Hitler. Fascism really is a type of rightwing populism. ..."
"... Rightwing populism pretends to be for the people and is to some extent (protectionism, isolationalism, nationalism) but in a lot of other ways, it's just fake and it's always a cover for class rule and rule by the rich. ..."
"... The rich will go to fascism or rightwing populism if they get a threat from the Left (read Trotsky), but they don't really like them very much, think they are classless brutes, barbarians, racists, bigots, etc. ..."
"... They're not worried about Donnie. He's no class traitor. They're worried about the populism of the Left and possibly about rightwing populism in Europe. Bolzonaro and Trump are hardly threats to capital. ..."
"... He pretends to be a populist because it helps him. For example, he doesn't care about illegal immigration. He's been happy to hire undocumented workers his whole life, even now in office. But it gets his base fired up so he rails about immigration. He has no ideology, he will use whatever helps him. ..."
"... Rightwing populism is NOT cool in my boat. Rightwing populism is Bolsonaro. It's Duterte too, but that's a bit different, he's a bit more pro-people. Erdogan is a rightwing populist too, but he's rather socialist. Marie Le Pen is out and out socialist and she gets called rightwing populist. Orban is 5X more socialist than Venezuela and he gets called rightwing populist. It's all very confusing. ..."
"... But in the US and Latin America, rightwing populism is ugly stuff all right, and it tends to be associated with fascism! ..."
Let's see, cattle ranchers are against vegetarianism, coal companies are against restricting CO2 emissions, and the Davos crew
is trying to combat populism, according to
The Washington Post . It is kind of amazing that the rich people at Davos would not understand how absurd this is.
Yeah, we get that rich people don't like the idea of movements that would leave them much less rich, but is it helpful to their
cause to tell us that they are devoting their rich people's conference to combating them? The real incredible aspect of Davos
is that so many political leaders and news organizations would go to a meeting that is quite explicitly about rich people trying
to set an agenda for the world.
It is important to remember, the World Economic Forum is not some sort of international organization like the United Nations,
the OECD, or even the International Monetary Fund. It is a for-profit organization that makes money by entertaining extremely rich
people. The real outrage of the story is that top political leaders, academics, and new outlets feel obligated to entertain them.
And the fact that so many Americans -(and especially American workers) still mistake Von Clownstick as a so called ''Populist''
- and being on their side - is... unbearable!
He IS in fact a rigthwing populist of a sort. That's what rightwing populism in the US looks like, and what it's always looked
like. Bunch of crap huh? Gimme Marie Le Pen any day.
"The real incredible aspect of Davos is that so many political leaders and news organizations would go to a meeting that is
quite explicitly about rich people trying to set an agenda for the world." \
Agreed - like how people almost worship British Royals.. or American celebrities... and yet, unfortunately, isn't it true that
the greedmongers at Davos are not "trying," but rather "largely succeeding" at setting said world agenda?
Nothing to see here, folks, move right along . . .
Davos and TED Talks. One entertains the rich, the other the smart. The skiing is better at Davos, the ideas are better at a
TED Talk. Just remember, most of the rich aren't smart and most of the smart aren't rich. So it's all rather silly, 'though it's
easier to get rich if you're smart than it is to get smart if you're rich. Don't ask me how I know that, but I'll tell you, if
you have an ounce of human kindness in you, learning the second half of that lesson is more painful than the first.
None of this would be half as much fun outside the glare of publicity, or if not heavily spiced with the envy of the excluded.
Ishi--I don't disagree with you. Just not as stupid as the Davos drivel. Perhaps I should have said 'less bad' ideas, but I
liked the cadence of 'better' and 'better.' Gotta have cadence if you want to get the People Marching.
Davos ought to be treated as a conspiracy against labor, representative government, environmental regulation and decent
living standards, but of course our admiring national press corps doesn't see it that way -- their bosses attend, after all.
Firstly we have to treat the so called ''Populists'' as a conspiracy against labor - because they pretended in the utmost conspirational
way to be on labors side.
While It always was as clear as mud that Davos was a Party of the Rich!
It may be best to avoid the term "populist" because it tends to be applied indiscriminately to the likes of Trump and to
leftist reformers. Or if it is used for Trump it should be "fake populist". Opposition to corporatist globalization can be populistic,
but Trump's version so far has been mostly fake.
You guys need to read up. Two kinds of populism: rightwing populism (which often looks like fascism) and leftwing populism.
They are quite different critters and they don't have a lot to do with each other though they agree on a few things.
That's basically my take, too. The term is purposely misused by the propagandists to get normal people thinking "Populism"
must be something they don't like. People REALLY need to re-read 1984 & refresh their memories of Orwellian good-is-bad brainwashing.
[and even "brainwashing" is an orwellian term! Brain-NUMBING, maybe... but nothing's getting cleaned, that's for sure]
Nope US rightwing populism has often looked a lot like Trump's crap. I mean some of it was better. I have a soft spot for Huey
Long. But in the US, rightwing populism just helps the rich mostly and it tends to be fascist.
''The term is purposely misused by the propagandists to get normal people thinking "Populism" must be something they don't
like'' You mean some con-artists have conned people who liked the term ''Populism'' into liking idiocy - racism and nationalism?.
Trump is a rightwing populist, but it is very confusing. In the US anyway and often in general, rightwing populists are
NOT the enemies of the rich. Note Mussolini and Hitler. Fascism really is a type of rightwing populism.
Rightwing populism pretends to be for the people and is to some extent (protectionism, isolationalism, nationalism) but
in a lot of other ways, it's just fake and it's always a cover for class rule and rule by the rich.
The rich will go to fascism or rightwing populism if they get a threat from the Left (read Trotsky), but they don't really
like them very much, think they are classless brutes, barbarians, racists, bigots, etc.
But the rich allow them because they think they can control them and not let them get out of hand. This is what happened in
Germany. This is what often happens actually.
In a sense, rightwing populism IS fake populism because it pretends to be for the people while often fucking them over with
rightwing class rule via fascism. It's still populism, it's just not for the people. It's fraudulent, iike most rightwing bullshit.
- AND! -
to suggest - or imply? - that the type of ''Populism'' Trump -(and other so called ''Populists) represent - IS to ''leave the
Davos Crowd much less rich'' -
could be the funniest thing ever written on this blog?
They're not worried about Donnie. He's no class traitor. They're worried about the populism of the Left and possibly about
rightwing populism in Europe. Bolzonaro and Trump are hardly threats to capital.
He pretends to be a populist because it helps him. For example, he doesn't care about illegal immigration. He's been happy
to hire undocumented workers his whole life, even now in office. But it gets his base fired up so he rails about immigration.
He has no ideology, he will use whatever helps him.
and to makes sure not to be misunderstood - I also think Davos is ''pathetic'' and ''hypocritical'' - and everything
else one wants to throw at it -
BUT as one of my favorite American Philosophers said:
"Nothing in all the world is more dangerous than sincere ignorance and conscientious stupidity."
And I think he meant the current ''Populists'' of this planet! -(and lets include especially the Brazilian one too)
But isn't it GREAT- that also ''the rich'' are starting to battle morons and a...holes like Baron von Clownsticks -(or the
nationalistic idiots in the UK - or the Neo Nazis in Germany?) -
For I while I thought I was left ALL alone in order to battle the type of ''Populism''- which is nothing else than the sick
racist phantasies of some nationalistic a...holes?
Rightwing populism is NOT cool in my boat. Rightwing populism is Bolsonaro. It's Duterte too, but that's a bit different,
he's a bit more pro-people. Erdogan is a rightwing populist too, but he's rather socialist. Marie Le Pen is out and out socialist
and she gets called rightwing populist. Orban is 5X more socialist than Venezuela and he gets called rightwing populist. It's
all very confusing.
But in the US and Latin America, rightwing populism is ugly stuff all right, and it tends to be associated with fascism!
Billionaire Michael Dell, chief executive officer of the eponymous technology giant, rejected a suggestion by U.S. Representative
Alexandria Ocasio-Cortez of a 70-percent marginal tax rate on the wealthiest Americans.
"No, I'm not supportive of that," Dell said at a Davos panel on making digital globalization inclusive. "And I don't think it
will help the growth of the U.S. economy. Name a country where that's worked."
She may not be in Davos, but the New York representative's influence is being felt on the slopes of the Swiss Alps. Three weeks
after Ocasio-Cortez floated the idea in an interview on "60 Minutes" to raise the top marginal tax rate on Americans' income of more
than $10 million to 70 percent, it was a hot topic at the gathering of the global financial and political elite.
... ... ...
"My wife and I set up a foundation about 20 years ago and we would've contributed quite a bit more than a 70 percent tax rate
on my annual income," Dell said. "I feel much more comfortable with our ability as a private foundation to allocate those funds than
I do giving them to the government."
Erik Brynjolfsson, a professor at the Massachusetts Institute of Technology who was on the panel with Dell, said such a rate worked
in the U.S. after World War II. But other executives were opposed, including Salesforce.com Inc. Co-Chief Executive Officer Keith
Block.
... ... ...
Billionaire investor Ray Dalio suggested that the idea may have legs in the run-up to the U.S. presidential election. Discussing
the outlook for a slowing world economy Tuesday, Dalio said that next year will see "the beginning of thinking about politics and
how that might affect economic policy beyond. Something like the talk of the 70 percent income tax, for example, will play a bigger
role." He didn't mention Ocasio-Cortez by name.
Currently in the U.S., the top marginal tax rate is 37 percent, which takes effect on income of more than $510,300 for individuals
and $612,350 for married couples, according to the Tax Foundation.
The fortunes of a dozen attendees at the World Economic Forum in 2009 have soared by a combined $175 billion, a Bloomberg analysis
found. The same cannot be said for people on the other end of the social spectrum: A report from Oxfam on Monday revealed that the
poorest half of the world saw their wealth fall by 11 percent last year.
Under neoliberalism 301K investors are overinvested in stock market essentially feeding Wall Street sharks. The net result even
in case of investing strictly in S&P500 are not that great. From 2000 to 2019 S&P rose from approximately 1400 to 2600 or 1200
points in 18 years. That's around 4.7% per year. Adding dividends that's around 6%. As you add money each year for this 18 years period you will realize only half of this return or 3% a year which is close to 30 years bond return (they are tax free, unlike S&P500) and barely beats inflation.
401K was an ingenious design to enrich Wall Street the staple on neoliberal attack on middle class
Notable quotes:
"... Samuelson was responding to my recent publications advocating expanded insurance, futures, and options markets to mitigate the financial risks – for example, those related to housing prices and occupational incomes – that ordinary people face. He said that these markets could, if pitched to the general population, turn into "casino markets," with people using them to gamble, rather than to protect themselves. ..."
Advising people simply to hold the market is advising them to
free-ride on the wisdom of others who do not follow such a strategy. If
everyone
followed Bogle's advice,
market prices would turn into nonsense and would provide no direction to economic activity.
3
I remember exactly when I began to appreciate the complexity of
the moral issues money management entails: October 8, 2009. I received a phone call from the eminent MIT economist
Paul Samuelson, who had been my teacher when I was a graduate student in the early 1970s. He was 94 years old at
the time, and two months later he died. I was so impressed by the call that I took notes on it in my diary.
Samuelson was responding to my recent publications
advocating expanded insurance, futures, and options markets to mitigate the financial risks – for example, those
related to housing prices and occupational incomes – that ordinary people face. He said that these markets could,
if pitched to the general population, turn into "casino markets," with people using them to gamble, rather than to
protect themselves.
He then brought up the example of Bogle, who "gave up a billion
dollars for a concept," Samuelson said. "He could easily have cashed this in," but he didn't. "The miracle that
was Vanguard came from Bogle's principles."
I thought he was right. In the long run, markets reward
principled people. But there is still need for an expanded set of risk markets, because these markets can – and do
– carry out useful functions, including risk management, incentivization, and orienting business.
The problem is that attention to these markets requires
intelligent and hard-working people to help others in their investing. Theirs is not a zero-sum game, for they
help direct resources to better uses. And these people must be paid. Even Vanguard, which now has a number of
different index funds, hires investment managers and charges a management fee, albeit a low one.
Not every fund needs a low fee. We live in a world where
constant and rapid change and innovation require more attention, and attention is costly. While many financial
managers are at times unscrupulous, a higher management fee is not always a sign that something is wrong.
But Bogle is still a hero of mine, because he provided an
honest product and was motivated by a sincere desire to help people. And he should be a hero to all, because he
showed that markets eventually recognize integrity.
I would also say ideas like people age and gradually become irrelevant no matter how
strongly they are propelled by the power of the state and MSM. When neoliberalism became the
object of jokes, it is clear that its time has passed.
Neoliberal ideology experienced a severe crisis in 2007 and was by-and-large
discredited.
But Neoliberalism as a social system is resilient and can continue to exist for some time
even after ideology itself was discredited. Probably 30-50 years, if we think that
neoliberalism is a perverted flavor of Trotskyism (Financial elite of all countries unite;
Permanent neoliberal revolution until the global victory of neoliberalism) and Bolshevism
lasted 50 years after the crisis of its ideology in early 60th.
So I think that neoliberalism entered its "zombie phase." It became more bloodthirsty,
aggressive (look at Trump) and even managed to stage revenge in Argentina and Brasil deposing
less neoliberal governments with hardcore neoliberal.
But ideas age and die like people and in 2019 the ideas of neoliberalism are essentially
dead. So now it is clinging by the pure power of propaganda and coercion. That is the road to
nowhere, and I expect this neoliberalism position in the USA will be further undermined
by-elections of 2020. Maybe tax regime will start to change to byte top 1%, and maybe there is
be local and quickly suppressed insurrections/strikes, like in France; I do not know. But with
the level of inequality intact, the cracks might widen.
Degeneration of the neoliberal elite (Trump, Pelosi, Schumer, Pompeo, etc.) is another
obvious problem. Filters work in such a way that capable (and this potentially dangerous to the
system) people are eliminated at early stages of political selection. That might s danger for
the USA is not so distant future as a viable, cohesive society and currently, the Congress
really reminds Soviet Politburo. Bunch on Mayberry Machiavelli.
At least in Australia politicians started openly discuss alternatives. Here in the USA,
there is dead silence. That means that the Congress is a part of the problem, not a part of the
solution.
Another problem is with the level of militarism in the USA society. The size of MIC is a
huge problem and like cancer is curable only by surgical means. The fact is that politicians
are arguing about 5 billion wall which is something like one percent of F35 program cost (
https://www.bloomberg.com/news/articles/2017-07-10/f-35-program-costs-jump-to-406-billion-in-new-pentagon-estimate
)
At this point, people stop to trust both politicians and MSM re-defining them as "fake news"
which means the crisis of legitimacy of the neoliberal elite. And I think that the USA either
reached this point or is very close.
That's why the US neoliberal elite decided to cement the cracks in the neoliberal
ideological façade via Russophobia in best neo-McCarthyism fashion. The idea is to
define the common enemy and mobilizing the society against it, leaving internal frictions on
the "day after." But it looks like neoliberalism which Sheldon Wolin defined as "inverted
totalities" is bad on mass mobilization. It no longer can produce slogans or politician who can
ignite passion of common people. Obama was a fake. So is Trump.
And Russiagate gambit produced some unwanted to neoliberals externalities like the society
attention to intelligence-driven machinations and their role as a political force under
neoliberalism. Including the role of British intelligence services.
"... The French bourgeoisie is the politically most experienced ruling class in Europe. It has no illusions about the challenge it faces. Le Point put its file on the revolt of the vests under the self-telling title "What is waiting us". ..."
"... But it's not only the king who is naked. The whole system is naked. In the many pages devoted by the magazine to demonstrate that what the Vests want is unfeasible, not even a single serious word is written about what needs to be done to deal with the deep causes which led the French to revolt. Today's capitalism of Macron, Merkel and Trump does not produce a Roosevelt and New Deal or Popular Fronts – and we have to wait to see if it will produce a Hitler as some are trying to achieve. For the time being, it only produces Yellow Vests! ..."
"... In Oscar Wilde's masterpiece "The Picture of Dorian Gray", the main character looks every night at his horrible real self in the mirror. But he looks at it alone. ..."
"... This is where Macron made his most fatal mistake, being arrogant and markedly cut off from reality – with the confidence given to him by the mighty elite forces, which elected him and by his contempt of the common people which characterizes him. ..."
"... Observing Macron, the people understood what lied ahead for them. They felt their backs against the wall – they felt that they had only themselves to rely on, that they had to take themselves action to save themselves and their country. ..."
"... This was the decisive moment, the moment the historical mission of Macron was achieved . By establishing the most absolute control of Finance over Politics, he himself invited Revolution. His triumph and his tragedy came together. ..."
"... Many established "leftists" or "radical" intellectuals, who used to feverishly haul capitalism over the coals – although the last thing they really wanted was to experience a real revolution during their lifetime – they too, stand now frightened, looking at an angry Bucephalus running ahead of them. They prefer a stable capitalism, of which they can constitute its "consciousness", writing books, appearing on shows and giving lectures, analyzing its crises and explaining its tribulations. They idea that the People could at some point take seriously what they themselves said, never crossed their minds either! ..."
"... Today, four out of five French people disapprove of Macron's policies and one in two demands that he resigns immediately. We assume that this percentage is greater than the percentage of Russians who wanted the ousting of Tsar Nicholas II in February 1917. ..."
"... France is currently almost in a state of Power Vacuum . The president and the government cannot in essence govern and the people cannot tolerate them. It is not a situation of dual power, but a situation of dual legitimacy , in Mélenchon 's accurate description. ..."
"... This is a typical definition of a revolutionary situation . As history teaches us, the emergence of such a situation is necessary but not sufficient condition for a victorious Revolution. What is required in or order to turn a rebellion into a potentially victorious Revolution, is a capable and decided leadership and an adequate strategy, program and vision. These elements do not seem to exist, at last not for now, in today's France, as they did not exist in May 1968 or during the Russian Revolution of February 1917. Therefore, the present situation remains open to all possible eventualities; there must be no doubt however, that this is the beginning of a period of intense political and class conflicts in Europe, and that the Europe, as we know it, is already history. ..."
"... Or at least, for the people to be given the opportunity to develop an effective way of controlling state power. ..."
"... By reversing Marx's famous formula in German Ideology , the ideas of the dominant class do not dominate society. This is why the situation can be described as revolutionary. ..."
"... Although it is difficult to form an opinion from afar about how the situation may unfold, the formation of a such a United Front from grassroots could perhaps offer a way out with regards to the need for a political leadership for the movement, or even of the need to work out a transitional economic program for France, which must also serve as a transitional program for Europe . ..."
"... Contrary to how things were a century ago, certain factors such as the educational level of the lower social classes, the existence of a number of critical, radical thinkers with the necessary intellectual skills and the Internet, render such a possibility a much more realistic scenario today, than in the past. ..."
The magazine LePoint is one of the main media outlets of the French
conservative "centre-right". One of its December issues carries the cover title France
Faces its History. 1648, 1789, 1830, 1848, 1871 four centuries of revolutions.
The cover features also a painting by Pierre-Jérôme Lordon, showing people
clashing with the army at Rue de Babylone , in Paris, during the
Revolution of 1830. Perhaps this is where Luc Ferry, Chirac's former minister, got his idea
from, when, two days ago, he asked the Army to intervene and the police to start shooting and
killing Yellow Vests.
Do not be surprised if you haven't heard this from your TV or if you don't know that the
level of police repression and violence in France, measured in people dead, injured and
arrested, has exceeded everything the country has experienced since 1968. Nor should you
wonder why you don't know anything about some Yellow Vest's new campaign calling for a
massive run on French banks. Or why you have been lead you to believe that the whole thing is
to do with fuel taxes or increasing minimum wage.
The vast majority of European media didn't even bother to communicate to their readers
or viewers the main political demands of the Yellow Vests ; and certainly, there hasn't
been any meaningful attempt to offer an insightful interpretation of what's happening in
France and there is just very little serious on-the-ground reporting, in the villages and
motorways of France.
Totalitarianism
Following Napoleon's defeat in Waterloo, European Powers formed the Holy Alliance banning
Revolutions.
Nowadays, Revolutions have just been declared inconceivable (Soros – though not just
him – has been giving a relentless fight to take them out of history textbooks or, as a
minimum, to erase their significance and meaning). Since they are unthinkable they cannot
happen. Since they cannot happen they do not happen.
In the same vein, European media sent their journalists out to the streets in Paris on
Christmas and New Year's days, counted the protesters and found that they weren't too many
after all. Of course they didn't count the 150,000 police and soldiers lined up by Macron on
New Year's Eve. Then they made sure that they remain "impartial" and by just comparing
numbers of protesters, led viewers to think that we are almost done with it – it was
just a storm, it will pass.
The other day I read a whole page article about Europe in one of the most "serious" Greek
newspapers, on 30.12. The author devoted just one single meaningless phrase about the Vests.
Instead, the paper still found the way to include in the article the utterly stupid statement
of a European Right-Wing politician who attributed the European crisis to the existence of
Russia Today and Sputnik! And when I finally found a somewhat more serious article online
about the developments in France, I realized that its only purpose was to convince us that
what is happening in France surely has nothing to do with 1789 or 1968!
It is only a pity that the people concerned, the French themselves, cannot read in Greek.
If they could, they would have realized that it does not make any sense to have "Revolution"
written on their vests or to sing the 1789 song in their demonstrations or to organize
symbolic ceremonies of the public "decapitation" of Macron, like Louis XV. And the French
bourgeois press would not waste time everyday comparing what happens in the country now with
what happened in 1968 and 1789.
Totalitarianism is not just a threat. It's already here. Simply it has omitted to
announce its arrival. We have to deduce its precence from its results.
A terrified
ruling class
The French bourgeoisie is the politically most experienced ruling class in Europe. It has
no illusions about the challenge it faces. Le Point put its file on the
revolt of the vests under the self-telling title "What is waiting us".
A few months ago, all we had about Macron in the papers was praise, inside and outside of
France – he was the "rising star" of European politics, the man who managed to pass the
"reforms" one after the other, no resistance could stop him, he would be the one to save and
rebuild Europe. Varoufakis admired and supported him, as early as of the first round of the
2017 elections.
Now, the "chosen one" became a burden for those who put him in office. Some of them
probably want to get rid of him as fast as they can, to replace him with someone else, but
it's not easy – and even more so, it is not easy given the monarchical powers conferred
by the French constitution to the President. The constitution is tailored to the needs of a
President who wants to safeguard power from the people. Those who drafted it could not
probably imagine it would make difficult for the Oligarchy also to fire him!
And who would dare to hold a parliamentary or presidential election in such a situation,
as in France today? No one knows what could come out of it. Moreover, Macron does not have a
party in the sense of political power. He has a federation of friends who benefit as long as
he stays in power and they are damaged when he collapses.
The King is naked
"The King is naked", points out Le Point's editorial, before, with almost sadistic
callousness, posing the question: "What can a government do when a remarkable section of the
people vomits it?"
But it's not only the king who is naked. The whole system is naked. In the many pages
devoted by the magazine to demonstrate that what the Vests want is unfeasible, not even a
single serious word is written about what needs to be done to deal with the deep causes which
led the French to revolt. Today's capitalism of Macron, Merkel and Trump does not produce a
Roosevelt and New Deal or Popular Fronts – and we have to wait to see if it will
produce a Hitler as some are trying to achieve. For the time being, it only produces Yellow
Vests!
They predicted it, they saw it coming, but they didn't believe it!
Yet they could have predicted all that. It would have sufficed, had they only taken
seriously and studied a book published in France in late 2016, six months before the
presidential election, highlighting the explosive nature of the social situation and warning
of the danger of revolution and civil war.
The title of the book was "Revolution". Its author was none other than Emmanuel Macron
himself. Six months later, he would become the President of France, to eventually verify, and
indeed rather spectacularly, his predictions. But the truth is probably, that not even he
himself gave much credit to what he wrote just to win the election.
By constantly lying, politicians, journalists and intellectuals reasonably came to believe
that even their own words are of no importance. That they can say and do anything they want,
without any consequence.
In Oscar Wilde's masterpiece "The Picture of Dorian Gray", the main character looks every
night at his horrible real self in the mirror. But he looks at it alone.
This is where Macron made his most fatal mistake, being arrogant and markedly cut off from
reality – with the confidence given to him by the mighty elite forces, which elected
him and by his contempt of the common people which characterizes him.
Unwise and Arrogant, he made no effort to hide – this is how sure he felt of
himself, this is how convinced his environment was that he could infinitely go on doing
anything he wanted without any consequences (same as our Tsipras). Thus, acting foolishly and
arrogantly, he left a few million eyes to see his real face. This was the last straw that
made the French people realize in a definite way what they had already started figuring out
during Sarkozy's and Hollande's, administration, or even earlier. Observing Macron, the
people understood what lied ahead for them. They felt their backs against the wall –
they felt that they had only themselves to rely on, that they had to take themselves action
to save themselves and their country.
There was nobody else to make it in their place.
Macron as a Provocateur.
Terror in Pompeii
This was the decisive moment, the moment the historical mission of Macron
was achieved . By establishing the most absolute control of Finance over Politics, he himself invited
Revolution. His triumph and his tragedy came together.
It was just then, that Bucephalus (*) sprang from the depths of historical Memory,
galloping without a rider, ready to sweep away everything in his path.
Now those in power look at him with fear, but fearful too are both the "radical right" and
the "radical left". Le Pen has already called on protesters to return to their homes and give
her names to include in her list for the European election!
Mélenchon supports the Vests – 70% of their demands coincide with the program
of his party, La France Insoumise – but so far he hasn't dared to join the
people in demanding Macron's resignation, by adopting the immense, but orphan, cry of the
people heard all over France: "Macron resign". Perhaps he feels that he hasn't got the steely
strength and willpower required for attempting to lead such a movement.
The unions' leadership is doing everything it can to keep the working class away from the
Vests, but this stand started causing increasing unrest at its base.
Many established "leftists" or "radical" intellectuals, who used to feverishly haul
capitalism over the coals – although the last thing they really wanted was to
experience a real revolution during their lifetime – they too, stand now frightened,
looking at an angry Bucephalus running ahead of them. They prefer a stable capitalism, of
which they can constitute its "consciousness", writing books, appearing on shows and giving
lectures, analyzing its crises and explaining its tribulations. They idea that the People
could at some point take seriously what they themselves said, never crossed their minds
either!
In fact, this is also a further confirmation of the depth of the movement. Lenin ,
who, in any event knew something about revolutions, wrote in 1917: "In a revolutionary
situation, the Party is a hundred times farther to the left than the Central Committee and
the workers a hundred times farther to the left than the Party."
"Revolutionary
Situation" and Power Vacuum
Today, four out of five French people disapprove of Macron's policies and one in two
demands that he resigns immediately. We assume that this percentage is greater than the
percentage of Russians who wanted the ousting of Tsar Nicholas II in February 1917.
France is currently almost in a state of Power Vacuum . The president and
the government cannot in essence govern and the people cannot tolerate them. It is not a
situation of dual power, but a situation of dual legitimacy , in
Mélenchon 's accurate description.
This is a typical definition of a revolutionary situation . As history
teaches us, the emergence of such a situation is necessary but not sufficient condition for a victorious Revolution. What is required in or order to turn
a rebellion into a potentially victorious Revolution, is a capable and decided leadership and
an adequate strategy, program and vision. These elements do not seem to exist, at last not
for now, in today's France, as they did not exist in May 1968 or during the Russian
Revolution of February 1917. Therefore, the present situation remains open to all possible
eventualities; there must be no doubt however, that this is the beginning of a period of
intense political and class conflicts in Europe, and that the Europe, as we know it, is
already history.
People's Sovereignty at the center of demands
Starting from fuel tax the revolting French have now put at the centre of their demands,
in addition to Macron's resignation, the following:
preserving the purchasingpower of the poorest social strata, e.g.
with the abolition of VAT on basic necessities to ensure decent standards of living for the
entire population,
the right of people to provoke referendums on any issue, the Citizens'
Initiative Referendum (RIC), including referendums to revokeelectedrepresentatives (the President, MPs, mayors, etc. ) when they violate their mandate,
all that in the context of establishing a SixthFrenchRepublic .
In other words, they demand a profound and radical " transformation " of the
Western bourgeois-democratic regime, as we know it, towards a form of directdemocracy in order to take back the state, which has gradually and in a totalitarian
manner – but while keeping up democratic appearances – passed under direct and
full control of the Financial Capital and its employees. Or at least, for the people to be
given the opportunity to develop an effective way of controlling state power.
These are not the demands of a fun-club of Protagoras or of some left-wing or right-wing
groupuscule propagating Self-Management or of some club of intellectuals. Nor are they the
demands of only the lowest social strata of the French nation.
They are supported, according to the polls and put forward by at least three quarters of
French citizens, including a sizeable portion of the less poor. In such circumstances, these
demands constitute in effect the Will of the People, the Will of the Nation.
The Vests are nothing more than its fighting pioneers. And precisely because it is the
absolute majority of people who align with these demands, even if numbers have somewhat gone
down since the beginning of December, the Vests are still wanted out on the streets.
By reversing Marx's famous formula in German Ideology , the ideas
of the dominant class do not dominate society. This is why the situation can be
described as revolutionary.
And also because it is not only the President and the Government, who have been debunked
or at least de-legitimized, but it's also the whole range of state and political
institutions, the parties, the unions, the "information" media and the "ideologists" of the
regime.
The questioning of the establishment is so profound that any arguments about violence and
the protesters do not weaken society's support for them. Many, but not all, condemn violence,
but there are not many who don't go on immediately to add a reminder of the regime's social
violence against the people. When a famous ex-boxer lost his temper and reacted by punching a
number of violent police officers, protesters set up a fundraising website for his legal
fees. In just two hours they managed to raise around 120.000 euro, before removing the page
over officials' complaints and threats about keeping a file on anyone who contributes money
to support such causes.
Until now, an overwhelming majority of the French people supports the demands while an
absolute majority shows supports for the demonstrations; but of course, it is difficult to
keep such a deadlock and power-void situation going for long. They will sooner or later
demand a solution, and in situations such as these it is often the case that public opinion
shifts rapidly from the one end of the political spectrum to the other and vice versa,
depending on which force appears to be more decisive and capable of driving
society out of the crisis.
The organization of the Movement
Because the protesters have no confidence in the parties, the trade unions, or anyone else
for that matter, they are driven out of necessity into self-organization, as they already do
with the Citizens' Assemblies that are now emerging in villages, cities and motorway camps.
Indeed, by the end of the month, if everything goes well, they will hold the first "
AssemblyofAssemblies ".
Similar developments have also been observed in many revolutionary movements of this kind
in various countries. A classic example is the spontaneous formation of the councils (
Soviets ) during the Russian revolutions of 1905 and 1917.
Although it is difficult to form an opinion from afar about how the situation may unfold,
the formation of a such a United Front from grassroots could perhaps offer a
way out with regards to the need for a political leadership for the movement,
or even of the need to work out a transitional economic program for
France, which must also serve as a transitional program for Europe .
Contrary to how things were a century ago, certain factors such as the educational level
of the lower social classes, the existence of a number of critical, radical thinkers with the
necessary intellectual skills and the Internet, render such a possibility a much more
realistic scenario today, than in the past.
Because the movement's Achilles' Heel is that, while it is already in the process of
forming a political proposition, it still, at least for now, does not offer any economic
alternative or a politically structured, democratically controlled leadership.
Effective Democracy is an absolute requirement in such a front, because it is the
only way to synthesize the inevitablydifferentlevels of
consciousness within the People and to avoid a split of the movement between "left"
and "right", between those who are ready to resort to violence to achieve their ends and
those who have a preference for more peaceful, gradual processes.
Such a " front " could perhaps also serve as a platform for solidifying a
program and vision, to which the various parties and political organizations could
contribute.
In her CritiqueoftheRussianRevolutionRosaLuxemburg , the leader of the German Social Democracy was overly critical
of the Bolsheviks , even if, I think, a bit too severe in some points. But she closes
her critique with the phrase: " They at least dared "
Driven by absolute Need, guided by the specific way its historical experience has formed
its consciousness, possessing a Surplus of Consciousness, that is able to feel the
unavoidable conclusions coming out of the synthesis of the information we all possess, about
both the "quality" of the forces governing our world and the enormous dangers threatening our
countries and mankind, the French People, the French Nation has already crossed the
Rubicon.
By moving practically to achieve their goals at a massive scale, and regardless of what is
to come next, the French people has already made a giant leap up and forward and, once more
in its history, it became the world's forerunner in tackling the terrible economic,
ecological, nuclear and technological threats against human civilization and its
survival.
Without the conscious entry of large masses into the historical scene, with all the
dangers and uncertainties that such a thing surely implies, one can hardly imagine how
humanity will survive.
"... Identity politics are no help here either. Indeed, to Scialabba, they are part of the problem because they are too easily coopted by capital: "Identity politics are an essential component of neoliberalism, the extension of market relations across borders and into all spheres of life. When rewards are assigned efficiently in proportion to merit, then not only is total output maximized, but the winners feel no qualms about the plight of the losers." Corporate power sees no distinction between funding diversity efforts and pursuing profit, becoming "woke" through advertising. ..."
"... vigorous self-assertion of working classes and small proprietors, which I think as close to mass democracy as the world has come, was transformed, largely by the advent of mass production, into a mass society of passive, apathetic, ignorant, deskilled consumers ..."
George Scialabba continues to work in a political-literary vein almost forgotten in our
partisan times. Along with Todd Gitlin, Thomas Frank perhaps, Jedediah Purdy (who introduces
this volume), and a few others, Scialabba is a liberal without being progressive, in solidarity
with workers against the capitalists rather than "woke" activists aligned with corporate
interests, and respectful of tradition while also criticizing the past's faults.
The last two years have seen a drastic realignment of conservatives, where the stranglehold
free-market and interventionist conservatives had has been loosened. Arguments from
traditionalists such as Russell Kirk are being heard once again, and new voices are rising
against Conservatism, Inc.
But the debate among liberals is just as interesting, if not more so, because of
[neo]liberalism's own dominance over the media, academia, and entertainment. They are fighting
in public, whereas conservatives mostly argue in the corners of the internet. A new generation
of activists and progressives disdain the liberalism espoused by their once-radical elders. A
world where Angela Davis gets awards rescinded for being insufficiently progressive and
prominent liberals are protested at commencements is very different indeed from the heady 1960s
and 1970s.
This new progressivism is sincere, but largely performative. It is too often in service to
an individualistic view of the self and lacks the solidarity Scialabba sees as one of the
strongest points of the Left. Resistance is a workers' collective, not a world in which choice
-- mediated by corporations and advertising -- is king.
Identity politics are no help here either. Indeed, to Scialabba, they are part of the
problem because they are too easily coopted by capital: "Identity politics are an essential
component of neoliberalism, the extension of market relations across borders and into all
spheres of life. When rewards are assigned efficiently in proportion to merit, then not only is
total output maximized, but the winners feel no qualms about the plight of the losers."
Corporate power sees no distinction between funding diversity efforts and pursuing profit,
becoming "woke" through advertising.
This collection covers what may broadly be called questions of political culture. Like the
best philosophical critics, Scialabba wants to know how we can live our common life with
dignity and justice. He considers writers like Ronald Dworkin, Christopher Lasch, Yuval Levin,
Michael Sandel, and others to probe how best to achieve public goods. The goods Scialabba
advocates, it should be obvious, are not aligned with mainstream conservative goals. And one
can argue with Scialabba's romance with a non-market economy in which redistributive justice
has pride of place. The "utopia" toward which we are slouching is remote indeed.
But perhaps not that remote. In an interview republished here, "America Pro and Con,"
Scialabba praises the " vigorous self-assertion of working classes and small proprietors,
which I think as close to mass democracy as the world has come, was transformed, largely by the
advent of mass production, into a mass society of passive, apathetic, ignorant, deskilled
consumers ." That vision would attract not a few Benedict Optioners, and not only
them.
Scialabba has harsh words for Republicans -- the free market Paul Ryan types and the later
MAGA incarnations. These comments are less interesting, and not just because they are
unsurprising. It is more because Scialabba realizes the problem is more nuanced than just bad
Republicans. Most of the elite Left and Right is in thrall to capital, and he can be as harsh
on liberal autonomy as any conservative. In an essay titled "Ecology of Attention," which
discusses Simon Head's Mindless: Why Smarter Machines are Making Dumber Humans and
Matthew Crawford's The World Beyond Your Head , he writes: "Seeing past this liberal
model of individual autonomy might also mean recognizing that consumerism can have civic
consequences. Just as atmospheric fine particles can clog our lungs and impair our society's
physical health, an unending stream of commercial messages can clog our minds, fragment our
attention, and, in the long run, impair our society's mental and civic health."
Drawing on a long left-wing tradition, he disputes the liberal capitalist view of people as
those who simply seek to maximize their own individual gain (in wealth, pleasure, or status,
for example). Rather, he says we are "situated beings" with our own pasts. In a perceptive,
sympathetic piece on Leszek Kolakowski, the "Conservative-Liberal Socialist," Scialabba
catalogs the failings of "existing socialism" that the Polish philosopher so ably described.
However, Scialabba cannot find much in that critique today. Soviet socialism may have been
rotten, but the liberal capitalism that has been triumphant since the 1980s in the West "has
seen the rampant financialization of the economy, the pulverizing of organized labor, a drastic
increase in economic inequality, the capture by business of the regulatory system, and the
growth of the national security state." Scialabba instead reaches for the anti-capitalist and
anti-Stalinist Left as a possible source of solutions for these ills. But the problem with this
resort is the same as the neoconservatives' attachment to an abstract capitalism. The dominance
or liberation of private life by the state is no longer the most pressing issue: media
(especially social media) and the supremacy of the "self" against all forms of community are
the new challenges.
As Shadi Hamid has
written recently , "It is difficult to think of a time less suited to Marxist economism
than the current one."
But back to Kolakowski. Scialabba nevertheless praises him for his willingness to be a
debunker of the debunkers, rejoicing in his affliction of "the comfortable unbeliever."
Although Scialabba cannot ultimately follow Kolakowski either in his political or religious
beliefs, nonetheless he praises Kolakowski for two things: the skepticism that allowed him to
break free -- and break others free -- of the illusions of totalitarianism, and a recognition
of the limits of that skepticism. Scialabba concludes that "as he continually reminded
rationalists, the skeptical impulse can't be sustained indefinitely or directed toward
everything simultaneously. We need traditions too."
It is premises like these that make Scialabba interesting to conservatives. Because
beginning from those premises Scialabba goes in directions conservatives typically do not
follow. Because he opposes [neo]liberal capitalism, he is fond of unions. Because he believes
we cannot completely extract ourselves from our cultural, ethnic, and religious inheritances,
ingrained injustices must be recognized and remedied. Because he believes we are situated
beings with traditions, we must construct an economic system that serves our nature rather than
invent abstractions that we then serve. A defender of America's middle-class (described here,
in reviewing a book by Alan Wolfe, as on the whole "generous, trusting, and optimistic"),
nevertheless he faults them for being too gullible in responding to the call of capital and the
military-industrial complex. But he also faults the Left for failing to understand that their
fellow Americans are, in fact, decent, and, for the most part, tolerant people.
Scialabba might be surprised that he has sympathetic readers on the Right, or even that a
form of nationalism might work with his premises. This possible compatibility isn't to ignore
that American nationalism can and has been racist and inhospitable to minorities. But the
conclusion that there is an "America" that has meaning beyond being simply a machine to
generate GDP (on the backs of workers, perhaps, here or elsewhere) could fit, even if not fully
comfortably, within Scialabba's generous intellectual world.
While not quite a utopia, it would be a start.
Gerald J. Russello is editor of The University Bookman .
Taking Stock of Ukraine's Achievements Amidst Russia's Aggression
Five years ago, the Ukrainian people staged a peaceful "revolution of dignity" against a
corrupt regime sponsored by the Kremlin. They stood firm even under gunfire and it was the
discredited President Viktor Yanukovych who eventually retreated and took refuge in Russia.
With Moscow engaging in renewed attacks against Ukraine in the Sea of Azov it is important to
take stock of Ukraine's achievements since those fateful days in Kyiv's Independence
Square."
Talk about Orwellian double speak. Only Russiagaters would eat that **** up in their stupidity
.
pparalegal 10 hours ago (Edited)
Oligarchs, corporations and want to be psychopathic rulers
East and West run the political/ think tank know-it-all class. All profit by it. Governments
start wars, not people.
I am still waiting for an explanation of how the mythical beast New Russia will own the USA
and what they will do with it after that. If we don't bomb the s**t out of some third country
because we can. I am much more concerned about the in house mad cows we have elected to boss the
American public and take the gold out of my teeth for the greater good..
Helg Saracen 10 hours
ago (Edited)
I'm just curious. How many real estate over the past 15 years has been bought by the
Chinese in New York, Chicago and California? How many brands, businesses were bought by the
Chinese from the Americans? How many were "borrowed" technology? And how many Russians bought
(rich Jews from Russia cannot be taken into account, they came to their relatives, well, they
bought a little of everything)? :( 30 years ago, the USSR was communist, and the US was
capitalist, now Russia has become capitalist, and the USA (I don't even know how to say) has
become an elite club for financial bandits manipulating sheep under the name "American Nation".
Mantis964 6 hours ago
and the USA (I don't even know how to say) has become an elite club for
financial bandits manipulating sheep under the name "American Nation".
Washington Post Forgets to Mention, Scott Walker Misled Fifth Graders About Taxes
By Dean Baker
The Washington Post had an article * about how Republicans and right-wingers have become
obsessed with trying to attack Alexandria Ocasio-Cortez, the newly elected representative
from Brooklyn. At one point it refers to former Wisconsin governor Scott Walker's attack on
Ocasio-Cortez's position advocating a high marginal tax rate on high income individuals.
"Former Wisconsin governor Scott Walker, a Republican who was defeated in November, on
Tuesday mocked Ocasio-Cortez for her tax proposal and suggested it was an elementary-school
understanding of the issue. 'Even 5th graders get it,' he tweeted."
While the piece noted part of Ocasio-Cortez's response, that rich people are the one's
with the money, it left out the more important part, Walker misled the fifth graders he
refers to in his tweet. In his tweet, Walker confuses a marginal tax rate with an average tax
rate
"Explaining tax rates before Reagan to 5th graders: 'Imagine if you did chores for your
grandma and she gave you $10. When you got home, your parents took $7 from you.' The students
said: 'That's not fair!' Even 5th graders get it."
Ocasio-Cortez correctly pointed out in her reply that the $10 the students earned for
doing chores for their grandma would not be taxed because the 70 percent tax rate she
proposes would only apply to incomes above $10 million.
"Explaining marginal taxes to a far-right former Governor:
"Imagine if you did chores for abuela & she gave you $10. When you got home, you got
to keep it, because it's only $10.
"Then we taxed the billionaire in town because he's making tons of money underpaying the
townspeople."
Ocasio-Cortez is right on this point and Walker is wrong. He either does not understand
how our income tax system works or is deliberately lying to advance his agenda. Either way,
the Post should have pointed out that Walker was wrong.
Many people are confused about the concept of a marginal tax rate (the higher tax rate
only appears to the income above a cutoff). Opponents of high marginal taxes on the rich try
to take advantage of this confusion in the way Scott Walker did with his class of fifth
graders. It is the media's responsibility to try to inform people about how the tax system
works and to expose politicians who misrepresent the issue.
That's funny in a sad sort of way. Dean has his hands full. There is no explaining the
stupidity of politicians, media, and ordinary people in the US these days.
100% tax, no economy, so no revenue.
0% tax, no revenue.
So, maximum revenue is somewhere between those.. and the 70% top rate is clearly above
that.. so we have to lower the top rate.
Let's unwrap the lies.
1) At 100% top rate, there is no economy.
WRONG! Ignores brackets, marginal rates, deductions, effective rates... Even at 90% top rate,
the rich were averaging 40% effective.
2) The goal of taxation is maximum revenue. NO!!! The tax code should be viewed as a tool
to keep the right amount of money, actively circulating in the economy. As such, is not only
about getting back out the money the government adds, but also about limiting how much the
rich take out.
3) Even if we assumed there is some taxation rate that hurts the economy, there was no
evidence presented to say we were above that point.
OF course, it is point #2 (limiting how much money the rich take from the economy) that the
Laffer Curve was created to destroy. And destroy it did, which is why we've been going into
debt at 3x the sustainable rate.
I would add that there is plenty of historical evidence ("90% destroys all incentives!"
"70% destroys all incentives!"..."39.5% destroys...") to conclude that the plutocrats believe
that all taxation is theft.
People on the left need to realize that high top rates are NOT to take money from the rich.
They will spend or invest in ways that lets them avoid taxes.
High top rates are needed to get the rich to spend and capital invest, to reverse the
structural imbalances.
That spending and investing creates demand, jobs, wages, lifting the poor into the middle
class.
The extra revenue comes from that growth in the middle class as the poor go from 0%
effective rate to 10-15% effective rate.
Agree - but it also changes the incentives for corporations and CEOs. By taxing away huge
windfalls for CEOs it allows corporations to set a max wage around 15-20M. This means instead
of the 700M to 1B salaries of big corps going to one guy, they pay their mid managers more
and their line staff more. It means they invest more in R&D. I agree with you - just an
supporting argument.
Does William Cohan's New York Times Tirade Against Low Interest Rates Make Any Sense?
By Dean Baker
It doesn't as far as I can tell. Cohan has been on a rant * for years about how high risk
corporate bonds are going to default in large numbers and then ... something. It's not clear
why most of us should care if some greedy investors get burned as a result of not properly
evaluating the risk of corporate bonds. No, there is not a plausible story of a chain of
defaults leading to a collapse of the financial system.
But even the basic proposition is largely incoherent. Cohan is upset that the Federal
Reserve has maintained relatively low, by historical standards,interest rates through the
recovery. He seems to want the Fed to raise interest rates. But then he tells readers:
"After the fifth straight quarterly rate increase, Mr. Trump, worried that the hikes might
slow growth or even tip the economy into recession, complained that Mr. Powell would 'turn me
into Hoover.' On January 3, the president of the Federal Reserve Bank of Dallas said the Fed
should assess the economic outlook before raising short-term interest rates again, a signal
that the Fed has hit pause on the rate hikes. Even Mr. Powell has signaled he may be turning
more cautious."
It's not clear whether Cohan is disagreeing with the assessment of the impact of higher
interest rates, not only by Donald Trump, but also the president of the Dallas Fed, Jerome
Powell, and dozens of other economists.
Higher interest rates will slow growth and keep people from getting jobs. The people who
would be excluded from jobs are disproportionately African American, Hispanic, and other
disadvantaged groups in the labor market. Higher unemployment will also reduce the bargaining
power of tens of millions of workers who are currently in a situation to secure real wage
increases for the first time since the recession in 2001.
If Cohan had some story of how bad things would happen to the economy if the Fed doesn't
raise rates then perhaps it would be worth the harm done by raising rates, but investors
losing money on corporate bonds doesn't fit the bill.
Robert Samuelson Ignores Role of Hedge Fund Magnate Eddie Lampert in Sears Decline
By Eileen Appelbaum
In today's column, * Robert Samuelson attributes Sears bankruptcy and possible
liquidation- the final chapter in a saga that has already cost 200,000 workers their jobs
– to the department store chain's inability to adapt to competition with big box stores
and the Internet. Apparently, he has never heard of Eddie Lampert and his ESL hedge fund,
which took over Sears and Kmart in 2006 and ran the company, now known as Sears Holdings as
an ATM for himself and his investors. Lampert may not have known anything about retailing,
but as Sears' CEO he had no qualms about monetizing it assets for his own and his wealthy
investors' benefit – including Treasury Secretary Steve Mnuchin who was an investor in
his hedge fund and served on the Sears board for 12 years as the retailer spiraled
downward.
In its most egregious act of financial engineering, Lampert's hedge fund setup a real
estate company, Seritage Growth Properties, with Lampert as Chairman of Seritage's board. In
2015, Lampert as CEO of Sears sold 266 Sears and Kmart stores located on prime real estate to
Seritage, where he was Chairman of the Board. Seritage shuttered stores and developed the
real estate into high-priced new developments - offices for the burgeoning high tech sector
in Santa Monica, a luxury shopping center in Aventura, Florida. Sears creditors are in court
over this self-dealing by Lampert, claiming he cheated them out of $2.6 billion.
If Samuelson took the time to read his own newspaper, he could have learned about the
business model of investment funds – private equity and hedge funds – that take
over Main Street companies from Peter Whoriskey's investigative reporting on the bankruptcy
of Marsh, a major mid-West grocery chain. Amazon, Walmart and the Internet certainly pose a
challenge, but the inability of companies to respond can be laid squarely at the feet of
investment funds that load the companies they own with unsustainable levels of debt and that
take resources out of the company by selling off its real estate.
As I show ** in a comparison of the largest supermarket chain in America, the very
successful publicly traded Kroger's, and the second largest, floundering private equity owned
Albertsons, large, iconic retail companies can respond to competitive challenges when they
control their own resources, own their own real estate, and keep their debt levels
manageable.
Samuelson attributes the demise of Sears to changes in capitalism and competition without,
apparently, having ever heard of hedge funds and private equity funds that take over the
management of companies and run them in the interests of investors in their funds, with
little regard for the companies' ability to compete or its workers.
Perhaps the Washington Post should set as a minimum requirement for its columnists that
they actually read the newspaper.
Montgomery-Ward, the original mail-
order 'dry goods' store (1872-2001)
Wikipedia: Montgomery Ward was founded by Aaron Montgomery Ward in 1872. Ward had
conceived of the idea of a dry goods mail-order business in Chicago, Illinois, after several
years of working as a traveling salesman among rural customers. He observed that rural
customers often wanted "city" goods, but their only access to them was through rural
retailers who had little competition and did not offer any guarantee of quality. Ward also
believed that by eliminating intermediaries, he could cut costs and make a wide variety of
goods available to rural customers, who could purchase goods by mail and pick them up at the
nearest train station. ...
Bankruptcy in 2000; Full liquidation in 2001
namesake retailer launched in 2004
after purchase of trademarks
"Instead, the Chinese government has been piling on loans to businesses and state-owned
enterprises, pushing the SOEs to spend more, and so on. Basically it has kept investment
going despite low returns. Yet this process has to have some limits – and when it hits
the (great) wall, it's hard to see how consumption can rise fast enough to take up the
slack."
Proof Krugman has been corrupted by free lunch economics!
If interest on savings is very low, returns on capital investment should be very low.
The lower limit on returns to capital is the real interest rate on savings. In China,
inflation makes interest on savings negative. So, returns on investment can be negative, just
less negative than interest on savings.
The only way investment can be funded is by workers spending less on consumption than they
earn working or from other sourcees. If workers are investing a lot, they have individually
decided they should not consume more, because there is no shortage of goods andd services to
buy in China.
This is a very different situation than in the US where 90% of the population has too
little money to buy what they want or need, and thus they borrow money to pay for
consumption. Wages are too low in the US to fund investment so a great deal of scarcity
exists in the US of several consumption goods which result in rapid inflation in the prices
of those goods, and thus very high returns to capotal even as interest on savings are kept
artificially low in order to allow for high defaults on bad consumer debt, consumer debt
needed to pay the high inflated price of selected scarce consumption goods due to under
investment.
In China, workers earn so much more than they are accustomed to consume they have
investing in housing so housing costs are very low, and housing exists in excess.
In the US, workers earn less than they need to consume, so hiusing is extremely scarce and
consumption prices have inflated at high rates.
Now, while China uses Keynes and sees excess housing as a good thing, the US uses free
lunch economics and sees scarce housing as a good thing because housing inflation "creates
wealth".
China has embraced private capital in many ways much more than the US since the 80s, with
returns to private capital falling to very low levels, while in the US, building capital is
thwarted to generate capital scarcity and high rates of capital price inflation. To "create
wealth" from capital scarcity.
"[W]hile in the US, building capital is thwarted to generate capital scarcity and high rates
of capital price inflation. To 'create wealth' from capital scarcity."
Alternatively, in the U.S. there is a combination of excess of capital and insufficient
investment alternatives (due to growing income and wealth inequality and excessive market
power, anti-competitive business practices and insufficient anti-trust enforcement) that
causes investors to chase unproductive returns and unrealistically bid-up asset prices.
Name the excess capital from paying too much to workers to build capital assets.
The only thing that I can think of that might be true is too much paying of workers to
create TV shows, movies, and computer games.
Except, in this media sector, big companies buying competitors along with buying back
shares of their stocks with profits is spawning ever more competitors. As much as Comcast
tries to eliminate competition, investors keep paying workers to build new streaming services
with content only the new companies have by paying more workers to produce TV and movies.
But this is standard economic theory: technology cuts costs, which cuts prices which
increases demand so the workers eliminated by technology get retasked producing more, but the
more is so much more, more workers are needed. The equilibrium is reached when long term
revenue just barely pays for all the workers long term.
You might object to everyone consuming more media content because you are like Miltion
Friedman a classic Jew stereotype puritian who believes the mmasses must work more and suffer
by consuming less, so you can be an elite preaching values you will not embrace for
yourself.
Ie, you did not state: "I am paid too much which is a sign of too many workers being paid
too much due to too much investment driving up wages".
Please send me $1000 a month for the rest of my life as debt. Then collect your money,
debt, after I'm dead. After all, your debt does not need to be repaid by my working for
income and not consuming using all or more of my income!
Or you believe the Venezuela economic policy is fantastic and should be adopted in the US,
because Trump and the GOP were not creating structural long term borrowing and spending fast
enough 2017-2018?
Yes the management of the domestic market development might fail to take adequate
measures
Indeed the macro managers may lose their way
But the techniques that got them this far
Are still solid
And with augmentation
Can continue high speed expansion of the production system and urbanization
Price regulation could and should be
CO ordinated with a mark up market
Land lots market value zeroed out
thru a 100 % George tax
And corporate debt placed in special investment vehicles and managed uniformly
Thru a universal default insurance system.
Run by a state default insurance agency
Imagine conservatives electing representatives to Congress who hiked the "gas tax" and then
offered lots more money to States that had elected legislatures that hiked their gas tax to
generate the matching funds to get Federal gas tax funds that were spent on transportation.
"Gas taxes" are not limited to fuel, but include fees on tires, which cost based on wear
on roads, ie, a big rig uses big costly ties that last maybe 25,000 miles so the more use of
the road the more tax paid. But increasingly cars have high cost performance tires. Then
there are use taxes based on the size plus load of the vehicle. A very high tax rate on
fossil fuels will eliminate their use requiring moving to a fee based on miles driven and
capacity of the vehicle, maybe by open road tolling.
But as transportation is a living cost, living costs need to be increased in Trumpland to
create the coastal economies Trump lives in and builds his resorts in. Economies with high
living costs to pay the high wages of all the workers who moved from low living cost
conservative places to high living cost liberal places.
So, all capital assets must be consumed in an average of 3 years? A ten year old house would
need to be burned down. Steeet torn up after five years returned to farm or forest land?
Average useful life of assets is probably 30 years, but at that point they still have a
minimum of 10% of cost in residual value, and paying workers to invest in existing capital at
3-5% annually will maintaiin the asset value of over half of assets for centuries. Spending
another 2% will replace all of the other half. So, spending 10% of GDP will increase capital
assets by 3% easy every year, which 70/3 means doubling total assets every 25 years.
Your 40% would mean doubling assets every 70/35% or two years.
Assuming assets keep increasing GDP becyond the addition to GDP from building productive
assets.
Note, cars are productive assets, ie, a car gets you to work. A house with utilities frees
up probably 5 hours a day to be used working for others. Try being homeless or living in a
tar paper shack with nothing but a pot belly stove and water from a pond half a mile away.
The capital asset like a house includes roads, running water and sewage, and fuel to cook and
heat with zero labor, which are paid for for with $100 in labor for a family unit up to 4,
more or less. Paying $100 a week frees up at least 25 hours of unpaid household labor,
collecting/cutting wood for energy, walking to the pond to fetch water, walking along a trail
to work and shop.
Yes, the management of the domestic market development might fail to take adequate
measures
Indeed the macro managers may lose their way
But, the techniques that got them this far
Are still solid
And with augmentation
Can continue high-speed expansion of the production system and urbanization
Price regulation could and should be
Coordinated with a markup market ...
[ Important criticism and agreed. Prominent Western economists have usually been unwilling
to look to the structure of the Chinese economy and specific techniques that have been used
to spur development. ]
Brad DeLong has been wrong about China since 1980, Jeffrey Sachs and Stanley Fischer since
1990, Paul Krugman since 2011... The problem is that they simply never look at the Chinese
institutions that have driven 9.5% yearly growth in GDP and 8.5% yearly growth in per capita
GDP these 42 years. Suddenly, then, Krugman decides that what has driven Chinese growth is of
no consequence because China has (gasp) too few people.
Imagine a China of too few people, and I could care less about the age ratios, which I
have and which are of no concern relative to productivity growth which is just what China is
focusing on.
"On one side, China's problems are real. On the other, the Chinese government –
hindered neither by rigid ideology nor by anything resembling a democratic political process
– has repeatedly shown its ability and willingness to do whatever it takes to prop up
its economy. It's really anyone's guess whether this time will be different, or whether
Xi-who-must-be-obeyed can pull out another recovery."
By God, Jeeves, I think he's got it.
Tonight's music recommendation is the Jefferson Airplane.
"... The first, directed outward, finds its expression in the global War on Terror and in the Bush Doctrine that the United States
has the right to launch preemptive wars. This amounts to the United States seeing as illegitimate the attempt by any state to resist
its domination. ..."
"... The second dynamic, directed inward, involves the subjection of the mass of the populace to economic "rationalization", with
continual "downsizing" and "outsourcing" of jobs abroad and dismantling of what remains of the welfare state created by President Franklin
D. Roosevelt's New Deal and President Lyndon B. Johnson's Great Society. Neoliberalism is an integral component of inverted totalitarianism.
The state of insecurity in which this places the public serves the useful function of making people feel helpless, therefore making
it less likely they will become politically active and thus helping maintain the first dynamic. ..."
"... By using managerial methods and developing management of elections, the democracy of the United States has become sanitized
of political participation, therefore managed democracy is "a political form in which governments are legitimated by elections that
they have learned to control". ..."
"... Under managed democracy, the electorate is prevented from having a significant impact on policies adopted by the state because
of the opinion construction and manipulation carried out by means of technology, social science, contracts and corporate subsidies.
..."
According to Wolin, domestic and foreign affairs goals are each important and on parallel tracks,
as summarized at Wikipedia,the United
States has two main totalizing dynamics:
The first, directed outward, finds its expression in the global War on Terror and in the Bush Doctrine that the United
States has the right to launch preemptive wars. This amounts to the United States seeing as illegitimate the attempt by any
state to resist its domination.
The second dynamic, directed inward, involves the subjection of the mass of the populace to economic "rationalization",
with continual "downsizing" and "outsourcing" of jobs abroad and dismantling of what remains of the welfare state created by
President Franklin D. Roosevelt's New Deal and President Lyndon B. Johnson's Great Society. Neoliberalism is an integral component
of inverted totalitarianism. The state of insecurity in which this places the public serves the useful function of making people
feel helpless, therefore making it less likely they will become politically active and thus helping maintain the first dynamic.
<> <> <> <> <> <> <> <> <> <>
Wolin's Inverted Totalitarianism provides the ground work for my suspicions regarding faux populists Obama and Trump:
By using managerial methods and developing management of elections, the democracy of the United States has become sanitized
of political participation, therefore managed democracy is "a political form in which governments are legitimated by elections
that they have learned to control".
Under managed democracy, the electorate is prevented from having a significant impact on policies adopted by the state
because of the opinion construction and manipulation carried out by means of technology, social science, contracts and corporate
subsidies.
"... I watched Greg Hunter's show on this. Very disturbing because of it's currency. This backdoor off-the-books financing of whatever they want is as she says, the introduction of free fascism in the US. ..."
"... Deep State is REAL: https://www.youtube.com/watch?v=LLTzpDFGWjI ..."
Investment advisor and former Assistant Secretary of Housing Catherine Austin Fitts says it
looks like a "global recession is coming."
Is that going to cause the debt reset we've been hearing about for years? Fitts says, " Make
no mistake about it, there is no reason for the federal government to default or monkey with
any debt because they can literally print the currency..."
" The question is how do they make sure whatever they are printing really holds any kind
of store of value. I think the reason you are seeing them reengineer the federal bureaucracy
and financial transactions infrastructure is because they want much greater and tighter
control to do whatever they do, and that includes to continue to debase the currency. They
could do this (reset) entirely by debasing the currency...
What we are watching . . . is essentially a coup. We had a financial coup, and now we are
watching a legal coup to consolidate that financial coup. I would keep my eye on the
fundamental governance structure of the U.S. The important thing is not what they do. The
important thing is who controls no matter what they do. Now, we have created a mechanism for
them to control entirely in secret and create policies entirely in secret, including around
the back of a U.S. President... It's pirating by the 'just do it' method. I said to someone
the other day, what is it about secret money for secret private armies that you don 't
understand? "
$21 trillion in "missing money" at the DOD and HUD that was discovered by Dr. Mark Skidmore
and Catherine Austin Fitts in 2017 has now become a national security issue.
The federal government is not talking or answering questions, even though the DOD recently
failed its first ever audit. Fitts says, "This is basically an open running bailout..."
"Under this structure, you can transfer assets out of the federal government into private
ownership, and nobody will know and nobody can stop it. There is no oversight whatsoever. You
can't even know who is doing it. I'm telling you they just took the United States government,
they just changed the governance model by accounting policy to a fascist government. If you
are an investor, you don't know who owns those assets, and there is no evidence that you
do...
If the law says you have to produce audited financial statements and you refuse to do so
for 20 years, and then when somebody calls you on it, you proceed to change the accounting
laws that say you can now run secret books for all the agencies and over 100 related entities
."
In closing, Fitts says, "We cannot sit around and passively depend on a guy we elected
President..."
"The President cannot fix this. We need to fix this...
This is Main Street versus Wall Street. This is honest books versus dirty books. If you
want the United States in 10 years to resemble anything what it looked like 20 years ago, you
are going to have to do it, and there is no one else who can do it. You have to first get the
intelligence to know what is happening."
Join Greg Hunter as he goes One-on-One with Catherine Austin Fitts, Publisher of "The Solari Report."
"If the law says you have to produce audited financial statements and you refuse to do so
for 20 years, and then when somebody calls you on it, you proceed to change the accounting
laws that say you can now run secret books for all the agencies and over 100 related entities
."
She's referring to FASB standards, but those dont sound like a Constitutional Amendment to
me.
Article i, Section 9, paragraph 7: "No Money shall be drawn from the Treasury, but in
Consequence of Appropriations made by Law; and a regular Statement and Account of the
Receipts and Expenditures of all public Money shall be published from time to time."
Perhaps when $20+ trillion are involved, the Constitution be damned, I suppose. Or perhaps
the govt boys will claim the $20T didn't come from an appropriation but instead from their
own "industrious" activities...you know, like drug and gun running, and human trafficking
perhaps?
I watched Greg Hunter's show on this. Very disturbing because of it's currency. This
backdoor off-the-books financing of whatever they want is as she says, the introduction of
free fascism in the US.
One of the smartest women out there. Huge fan here. She almost got snuffed for blowing the
whistle at HUD (two sets of books and all). It's only recently that she's come out and said
that there's no such thing as the "money being lost". It's digital and 100% traceable.
Fitts is correct and her approach is sound. Money flows are traceable. The problem is more
complicated, though. As Enron proved and the Parmalat scandal cemented, the CRONY CUT is
fatal. The Auditors gave up fiduciary duties for FIDOCIARIES riches. They rolled over and played
dead.
They've already tried to off her. They broke her financially and she bounced back. She
made a lot of enemies but luckily she has some good friends in high places too. Watch a few
Vids about what they did to her after she blew the whistle at HUD. She's lucky to be above
ground.
Her extensive studies and reports that follow crack cocaine being dumped into various
areas the subsequent drug related violence and BS "WOD" response and then what happened to
the real estate, as in, WHO WINDS UP BUYING block after block after block of blighted
buildings is absolutely fascinating . She should have gotten more recognition for those
exhaustive studies.
There's a VERY LARGE HAND at work there...for profit.
"... Crumbling of neoliberal ideology now is an undisputable scientific fact. While neoliberal practice continues since 2008 unabated, and neoliberalism even managed (not without help from some three-letter agencies) staged counterrevolutions in several countries such as Ukraine, Argentina, and Brazil (the phenomena known as "Strange non-death of Neoliberalism"). ..."
"... The current level of degeneration of the neoliberal elite is another interesting factor. Essentially neoliberal oligarchy (and this is first of all financial oligarchy) and their political stooges lost the legitimacy in the minds of the majority of the electorate in the USA (Trump+Sanders supporters). ..."
"... Republican leaders will have to acknowledge that market capitalism is not a religion. Market capitalism is a tool, like a staple gun or a toaster. You'd have to be a fool to worship it. Our system was created by human beings for the benefit of human beings. We do not exist to serve markets. Just the opposite. Any economic system that weakens and destroys families is not worth having. A system like that is the enemy of a healthy society. ..."
"... Socialism is exactly what we're going to get, and very soon unless a group of responsible people in our political system reforms the American economy in a way that protects normal people ..."
My impression is that it is impossible to separate the current backlash on globalization
from the backlash on neoliberalism as an ideology.
Crumbling of neoliberal ideology now is an undisputable scientific fact. While neoliberal
practice continues since 2008 unabated, and neoliberalism even managed (not without help from
some three-letter agencies) staged counterrevolutions in several countries such as Ukraine,
Argentina, and Brazil (the phenomena known as "Strange non-death of Neoliberalism").
One of the fundamental forces behind the last 25 years of neoliberal globalization is the
availability of cheap oil. If this period is coming to an end in a decade or two (as in
prolonging period of over $100 per barrel prices) the reversal of neoliberal globalization
might acquire a completely different pace and scale.
The current level of degeneration of the neoliberal elite is another interesting factor.
Essentially neoliberal oligarchy (and this is first of all financial oligarchy) and their
political stooges lost the legitimacy in the minds of the majority of the electorate in the USA
(Trump+Sanders supporters).
In this sense, I would like to emphasize an amazing and unexplainable (given Fox news owner)
speech by Tucker Carlson on Jan 2, 2009.
He offered this blunt advice to Republicans:
Republican leaders will have to acknowledge that market capitalism is not a religion. Market capitalism is a tool,
like a staple gun or a toaster. You'd have to be a fool to worship it. Our system was created by human beings for the
benefit of human beings. We do not exist to serve markets. Just the opposite. Any economic system that weakens and
destroys families is not worth having. A system like that is the enemy of a healthy
society.
This is probably the first statement that neoliberalism is the enemy of healthy society on
Fox.
This might not end well as financial oligarchy is entrenched and does not was to share power
with anybody. Indeed, Carlson anticipated the resistance to his views in the way similar to
FDR:
Socialism is exactly what we're going to get, and very soon unless a group of responsible
people in our political system reforms the American economy in a way that protects normal
people
This also shed additional light of Russiagate, as an attempt to cement cracks in the
neoliberal society by uniting the nation against the common enemy. In no way Russiagate is only
about Trump.
Free market is possible only under strict government regulation. Without government regulation free market quickly
deteriorates into the law of jungles. Such a paradox ;-)
And if financial oligarchy gets to power as they got via coup d'état in the USA in late 7th, it is only a matter of time before
the society collapses. They are very destructive to the society at large. Probably more so then organized crime. But wait. They
actually can be viewed as special type of organized prime as is "The best way to rob the bank is to own it".
Notable quotes:
"... Idiots on here are always going on about how we don't got capitalism, if we only had capitalism, we don't got free markets, if only we had free markets, then everything would be hunky-dory. Without any proof, of course, because there never was and never will be a "free" "market." The US has plenty capitalism. And everything sucks. And they want more. Confused, stupid, disingenuous liars. ..."
"... Free markets are crookedness factories. As a PhD from Chicago Business School told me, "Free markets?! What free markets?! There is no free market! It's all crooked!" ..."
Idiots on here are always going on about how we don't got capitalism, if we only had
capitalism, we don't got free markets, if only we had free markets, then everything would be
hunky-dory. Without any proof, of course, because there never was and never will be a "free"
"market." The US has plenty capitalism. And everything sucks. And they want more. Confused,
stupid, disingenuous liars.
Look, what you call "capitalism" and "free markets" just means scams to make rich people
richer. You read some simple-minded description of some pie-in-the-sky theory of some perfect
world where rational actors make the best possible decisions in their own interest without
any outside interference, and you actually think you are reading a description of something
real.
I'll tell you what's real. Crookedness. Free markets are crookedness factories. As a
PhD from Chicago Business School told me, "Free markets?! What free markets?! There is no
free market! It's all crooked!"
"Goldman cuts 10-year Treasury yield target for 2019 to 3%"
By Sunny Oh...Jan 8, 2019...10:45 a.m. ET
"Goldman Sachs has rolled back its call for much higher rates in U.S. government bonds in
the U.S., though it still expects a gradual climb from the current muted levels in the
Treasury market.
In a Tuesday note, Goldman Sachs said they expect the 10-year yield TMUBMUSD10Y, +0.06% to
hit 3% by year-end, a 50 basis point cut from their forecast of 3.5%. Since last week, the
benchmark bond yield has steadily risen to 2.710% Tuesday, after hitting an 11-month low of
2.553% last Thursday, according to Tradeweb data.
having just ruled out what could very well be the only solution, all in the cause of
independence.
"One can appreciate why central bankers don't want to get gamed into some of the nuttier
monetary policies that have been proposed, for example "helicopter money" (or more targeted
"drone money") whereby the central bank prints currency and hands it out to people. Such a
policy is, of course, fiscal policy in disguise, and the day any central bank starts doing it
heavily is the day it loses any semblance of independence. Others have argued for raising
inflation targets, but this raises a raft of problems, not least that it undermines decades
of efforts by central banks to establish the credibility of roughly 2% inflation."
I am reminded of Paul's advice to the day care coop, that they could not trade chits for
hours simply because they didn't have enough chits to allow for savings, so make more and
distribute them. At least, that's how I remember it.
The Fed failed to get growth going after the last recession...despite a long stream of rosy
forecasts. So what do elites propose for the next recession? More Fed action...and why not?
Low interest rates goose the markets, lining the pockets of the banksters who own the Fed.
Like Vietnam, Iraq, Afghanistan and the other pointless and futile military adventures,
when the going gets tough, you can count on elites to double down with failed economic
policies (that just happen to enrich them.)
At some point, policy simply becomes to "hold it together".
What do you think the goals of the policy in Iraq, Afghanistan are?
Oh sure, Bush Jr went in thinking we could set a pro-west democracy, ignoring the experts
that said it would be impossible since the people don't want pro-west. If they have
democracy, they are going to vote to disband the democracy and hand power to the
theocracy.
Since then, the policy has simply been to prevent giving Iran and Russia free rein to set
up anti-west theocracies as puppets of Russia and Iran.
As for the Fed not getting growth, same principal... at least they have prevented the
house of cards that is the massive household and business debt from cascade defaulting into
global depression.
Back in Bernanke's day, every Fed speech included comments on "structural imbalances that
need to be addressed with fiscal policy", and every time he was dismissed as "the rich that
fund the political campaigns will never allow it".
Going back to Point's OP. Once they have taken away the screw driver, the hammer becomes
the only way to put in a screw.
BTW nobody knows the terms of the deal Big Oil negotiated with Iraqi leaders to get a lock on
cheap oil in southern Iraq. It was so bad that the Iraqi parliament never approved it. I
assume that Big Oil pays $5/barrel or less to Iraqi leaders' bank account in tax havens.
IOW...total corruption embraced by Republicans and Democrats alike.
"Answer: 1) Avoid admitting defeat. 2) Enrich the military/security oligopolies."
Nope.
To prevent Iran, with Russian aid, from advancing their goal of unifying the Islamic
world.
The goal is to keep the middle east divided and fighting itself so that it can't unify
against the west.
We can argue whether or not that is "good policy" or "moral policy", but that is the
policy.
Our friends in the region, like Saudi Arabia and Turkey are the countries that are content
to keep the middle east divided.
Iraq too, under Saddam Hussein... right up until he saw the collapse of the USSR and a
weakened Iran as an opportunity to unite the middle east under his control. Once he decided
to try to "unite the middle east" instead of being a tool for keeping it divided, he became
just another part of the problem.
Ridiculous. Total lack of understanding: Islamic world will never unite behind Iran. Iran is
Shi'a.
Of course, the knuckleheads running American foreign policy didn't understand that in
2003...and probably still don't understand, so I'll cut Darrell in Phoenix a little slack,
because his ignorance is shared by many elites.
Just how will Iran, who was the safest Islamic country until US and Saudis got mad at them
and stirred up Baluch and MEK terrorism, unify the Salafists who are Sunni supported by GCC
emirs and royals?
Stop making up motives that make no sense at all:
"Since then, the policy has simply been to prevent giving Iran and Russia free rein to set
up anti-west theocracies as puppets of Russia and Iran."
Note Russia has its own issues with Chechen and other Islamist terror!
Your excuses are almost as wild as the things Feith and Cheney made up about Iraq in
2002!
So this neoliberal stooge woke up and started advocating mixed economy. Very interesting.
Notable quotes:
"... What we see right away is that even now, with all the privatization etc. that has taken place, government at various levels employs about 15 percent of the work force – roughly half in education, another big chunk in health care, and then a combination of public services and administration. ..."
"... Follow The New York Times Opinion section on ..."
Maybe not everything should be privatized. There are private activities that could plausibly be made public, like utilities, which
in some cases are publicly owned already.
There
are private activities that could plausibly be made public, like utilities, which in some cases are publicly owned already. Credit
Eric Thayer for The New York Times
A mind is a terrible thing to lose, especially if the mind in question is president of the United States. But I feel like taking
a break from that subject. So let's talk about something completely different, and probably irrelevant.
I've had several interviews lately in which I was asked whether capitalism had reached a dead end, and needed to be replaced with
something else. I'm never sure what the interviewers have in mind; neither, I suspect, do they. I don't think they're talking about
central planning, which everyone considers discredited. And I haven't seen even an implausible proposal for a decentralized system
that doesn't rely on price incentives and self-interest – i.e., a market economy with private property, which most people would consider
capitalism.
So maybe I'm being dense or lacking in imagination, but it seems to be that the choice is still between markets and some kind
of public ownership, maybe with some decentralization of control, but still more or less what we used to mean by socialism. And everyone
either thinks of socialism as discredited, or pins the label on stuff – like social insurance programs – that isn't what we used
to mean by the word.
But I've been wondering, exactly how discredited is socialism, really? True, nobody now imagines that what the world needs is
the second coming of Gosplan. But have we really established that markets are the best way to do everything? Should everything be
done by the private sector? I don't think so. In fact, there are some areas, like education, where the public sector clearly does
better in most cases, and others, like health care, in which the case for private enterprise is very weak. Add such sectors up, and
they're quite big.
In other words, while Communism failed, there's still a pretty good case for a mixed economy – and public ownership/control could
be a significant, although not majority, component of that mix. My back of the envelope says that given what we know about economic
performance, you could imagine running a fairly efficient economy that is only 2/3 capitalist, 1/3 publicly owned – i.e., sort-of-kind-of
socialist.
I arrive at that number by looking at employment data
. What we see right away is that even now, with all the privatization etc. that has taken place, government at various levels
employs about 15 percent of the work force – roughly half in education, another big chunk in health care, and then a combination
of public services and administration.
Looking at private sector employment, we find that another 15 percent of the work force is employed in education, health, and
social assistance. Now, a large part of that employment is paid for by public money – think Medicare dollars spent at private hospitals.
Much of the rest is paid for by private insurers, which exist in their current role only thanks to large tax subsidies and regulation.
And there's no reason to think the private sector does these things better than the public. Private insurers don't obviously provide
a service that couldn't be provided, probably more cheaply, by national health insurance. Private hospitals aren't obviously either
better or more efficient than public. For-profit education is actually a disaster area.
So you could imagine an economy in which the bulk of education, health, and social assistance currently in the private sector
became public, with most people at least as well off as they are now.
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Then there are other private activities that could plausibly be public. Utilities are heavily regulated, and in some cases are
publicly owned already. Private health insurance directly employs hundreds of thousands of people, with doubtful social purpose.
And I'm sure I'm missing a few others.
By and large, other areas like retail trade or manufacturing don't seem suitable for public ownership – but even there you could
see some cases. Elizabeth Warren is suggesting public manufacture of
generic drugs , which isn't
at all a stupid idea.
Put all of this together, and as I said, you could see an economy working well with something like 1/3 public ownership.
Now, this wouldn't satisfy people who hate capitalism. In fact, it wouldn't even live up to the old slogan about government controlling
the economy's "commanding heights." This would be more like government running the boiler in the basement. Also, I see zero chance
of any of this happening in my working lifetime.
But I do think it's worth trying to think a bit beyond our current paradigm, which says that anything you could call socialist
has been an utter failure. Maybe not so much?
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View all New York Times newsletters. Paul Krugman has
been an Opinion columnist since 2000 and is also a Distinguished Professor at the City University of New York Graduate Center. He
won the 2008 Nobel Memorial Prize in Economic Sciences for his work on international trade and economic geography.
@ PaulKrugman
. Dr. Krugman missed the largest communist socialist organization in the USA - the military! The live on communes called bases.
They have everything provided including clothes, housing, food and training. They get routine exercise as they prepare to defend
the country in a world with no credible threat. It is like summer camp year round. The biggest irony? This communist orgsnization
fought and trained for conflicts with communists. .
To see what the government can do to support the economy we don't need to look farther than our own borders. The government
has been crucial to the development and maintenance of many economic activities as they exist today. Much of our shiny technology
owes its existence to government investment. Government investment was crucial to the development of flat screens and touch screens.
GPS based products rely for their operation on continued government support. Mariana Mazzucato makes the point more completely
in her book "the Entrepreneurial State." We should re-examine many areas of the economy to see where the government already has
a positive impact. Where we find positive effects, we should try to extend those effects in the same and other enterprises - we
should also look to see what is not working and eliminate or curtail the negative impacts of those activities. Outdoor recreation
and tourism is another area of the economy that thrives on government support. Those activities contribute far more to the local
economy of many rural areas than what they currently rely on in extractive activities like mining, oil and gas production and
logging. Expanding outdoor activities and tourism will also require finding ways to reduce the risk of fires in many remote areas,
which will also create jobs. (anyone for raking?) So thank you Professor Krugman for highlighting the possibilities of a mixed
economy, but as you suggest, we need to broaden our imagination.
Can the state be a better capitalist? I always hear how Norway has done an amazing job of creating a sovereign wealth fund,
funded by their petroleum production taxes and fees. Last I checked, the US produces a lot of petroleum, but we don't have a sovereign
wealth fund with $165,000 per person. Do we see our severance fees and royalties in other ways or do socialist economies do a
better job in managing the funds?
Capitalism can be a bit of a boxing match. Not everything needs to be (should be?) a boxing match. A little Fri nite music
for Krug - Alison Krause doing Simon & Garfunkel https://youtu.be/hci5q3G6-FA
Dr. Krugman - Please provide concrete examples of how other nations deal with such concepts as public/private in realistic
ways that help the ordinary citizen. Bashing what we've got without profiling meaningful reforms only goes so far.
The roots of capitalism lie in how we create capital - on the basis of debt and, for the most part, by private sector banks.
It's done using fractional reserve banking - taking money created by the state (promissory notes) and lending it over and over
- by a factor of around eight times. The key - money is only created on the promise of a "profit", ie, economic growth. It's why
GDP growth is always the measure of "progress". As this system becomes ever more dysfunctional and our thoughts turn to sustainability,
it is logical we need to think about different systems of creating money. Why not by the state? 2008 is the answer to anyone who
says it won't work - private sector banks created commercial paper out of fraudulent debt - not rational, efficient, or fair by
any measure. China is an example of an economy where the state creates commercial money. It seems to be doing rather well, especially
in building infrastructure that benefits peoples lives. Of course, we criticize China for not playing by the "rules" - our rules,
of course, rules that are driving us over a cliff. I believe it's fundamental that we think of ways in which we can reduce the
amount of commercial money created for profit by private sector banks in favour of money created for the common good. A nice side
effect will be the increasing irrelevance of private-sector "wealth" - a way of scaling back inequality.
Krugman the liberal with a conscience, wouldn't go so far as to point out the many pros vs the cons of the EU social democracy
systems. That would be going too far. The Democratic Party still need to raise plenty of corporate money to run in 2020. He'll
continue with the anti Trump, anti GOP tirades. And write MAYBE not everything should be privatized as a profit center---in an
operating democracy. Americans will still be left uninformed about what they should be demanding from the govt they stand in long
lines to elect. Thus be left more vulnerable to GOP propaganda and maybe even future Trumps, now swimming up from the swamp.
So why doesn't our liberal with a conscience make concrete comparisons in real people terms with our PAST GENERATIONS when
the middle class was expanding, and with other capitalist democracies now? American past examples are all there---upward mobility,
unions, secure pensions, high tax rates on the wealthy, better regulations, infrastructure and highway building, low cost college
tuition at state universities--etc etc . .... etc. The data is all there, as would befit an economist who won a special Nobel
in economics. And who now works with an institute at City University of NY that studies income inequality. For more informative
reading instead, read Leonhardt's column--When the Rich Said No to Getting Richer. And the recent Edsall column on big money influence
in our politics. That's a topic most columnists and pundits avoid, except for 1 line occasionaly to show they're hip to it. Then
they go on to something else to stay safe and centrist in line with our warped political spectrum. As our columnists stay careful
in our FOX News/GOP/corporate political culure, we get more realistic, informative mini columns from many reader commenters instead
of the columnists. It's the reader commenters, not the columnists who up the sales of the NYTimes.
I read that Canada avoided our 08 crash because it had earlier refused to merge with US banks. Maybe that's sensible 'conservativsm'---
to conserve their more balanced banking system and economy. Bernie Sanders once had a senate hearing on health care with witnessess
from Canada and 4 other countries on how they pay for and use health care for all. Our media ignored it---I happened to catch
it on cspan. Is Krugman even aware of this? Citizens of dozens of other countries wouldn't put up even with Obamacare, which is
a vast improvement over the previous non system. But it keeps insurance profits subsidized by our taxes. Abroad, if not single
payer, then their govts regulate premium prices for their citizens with insurance mandates. If they didn't the citizens would
vote them out. This difference should rate a few columns by Krugman the economist, concerned about inequality. But he avoids these
comparisons. It's how he and the NYT are positioning themselves in our politics---humanitarian, but not too much. At least we
have reader comments to give some realistic data on other countries to Americans who are mostly kept in the dark by their media.
@Meredith I'm sorry Meredith, but your charge is unfair. I don't know how long you've been reading Krugman's column in the
NYT, but he's literally published DOZENS of them comparing our healthcare 'system' with that of other countries, before, during,
and after the implementation of Obamacare. And then there's his NYT blog, where wrote similarly but on a more advanced level.
The last thing you could say about Krugman is that he's been 'captured' by the wealthy elite. Anything but.
re: the case for a mixed economy The choice of markets or public ownership or any combination of the two is not the answer
or even the question. By the way communism has never been given a fair shot. You mentioned the key to any discussion of economics...
self-interest. Communisms downfall has always been self-interest (GREED). Greed comes in a number of guises. Military dictatorships
or the NYSE. Capitalism's dead end is its ultimate goal... One conglomeration with one CEO.
@morgan If Communism had a downfall, then it had a shot, and it failed. There's no reason to think that, as a system run by
fallible human beings, the outcome would EVER be any different. Capitalism, on the other hand, has many flavors, almost all of
which we ignore here in the USA, except the one that seeks to destroy our public institutions in the name of an extreme libertarianism
masquerading as a Utopia of 'free markets'. Whether by committee or by the wealthy, redistribution of wealth by the few has always
been a fool's game. Regulatory vigilance, constant reform, and transparent oversight, has proven itself the best partner of capitalism
in every case. There IS a middle ground with capitalism that we ignore for the extremes of either wealth, or control.
Krugman says "But have we really established that markets are the best way to do everything? Should everything be done by the
private sector? I don't think so." Gosh, don't THINK so? Krugman cautiously asks the question. He doesn't want to offend any centrist
Democratic party leaders needing campaign money, and one of them may someday pick him as Treasury Secretary. CNN's Ali Velsh who
is from Canada, stated flatly on TV that free market health care has never worked in any country. The incentives are not aligned
to provide care that was deemed a right in most modern nations in 20th Century. But not deemed a right in USA. Krugman, as a winner
of a special Nobel prize in economics, might actually compare the international GINI Score ranking of countries on their citizens'
economic moblity. Americans ranks behind other democracies---that are also capitalist countries. Othe countries like profits too,
but profits are not prioritized above all else like here. But to criticize this underlying causation is to look too left wing
liberal socialist unAmerican, etc etc. Krugman shies away. That would seem the perfect topic for a Krugman-type columnist who
titles himself a liberal with a conscience.
Hey, where's the usual easy Trump bashing that gives us all such emotional catharsis? Is Krugman realizing his anti Trump/Gop
columns aren't enough, that we actually need more? Such as questioning the basic tenets of our political culture? That it's not
only Trump that is weakening our democracy? This column is just a start---Krugman stays careful not to go too far to criticize
our warped norms.
Omg! Warrens idea of public mfgr of generic drugs "isn't a stupid idea"? Is that all you can think up to say, PK? Tell us why
it ISN'T stupid. PK wants to look like a humanitarian but still stick with the main Democratic party positions---but this party
has to vie with GOP for campaign money. And PK is seen by the Times as its prestigious 'liberal' columnist. To not look too liberal
by our warped standards, PK in effect helps to marginalize any ideas that are truly progressive and needed. They're not stupid,
but are they smart? For whom? Policies that are called progressive in the US, are centrist in other capitalist democracies---
but keep that dark. Hey, 'liberal', where's your conscience you told us about? Talk not about those who hate capitalism, but those
who want to keep it, if it is properly regulated by elected govt. Talk about how our politics are regulated by corporations --through
donor money and norm setting, esp for the media. It's obvious--our columnists are careful to stay safe within the guidelines set
up. There are many ways to influence 'free speech' without actual govt censorship. We see this daily in our news media, careful
to stay within guidelines.
Economies are human, social creations, they are not at all like solar systems, for example. As human creations, they should
serve human interests. That will not happen independent of the political system of democracy. In the US, democracy is seriously
corrupted by the power of oligarchs, so the failures of the US economy to do its job cannot be solved by purely economic re-arranging.
Assuming that power is back in the hands of people, what should we expect from an economy? Three things: 1. sufficient production
of goods and services (this is the free market's strong point), 2. fair (not necessarily equal) distribution of these (this a
the free market's weak point), and 3. jobs that satisfy workers' needs for sociability and dignity. (This is a strong point of
Marx's thought.) # 2 and 3 require an intelligent, well-functioning democracy. Framing this in old, worn out terms like capitalism
and socialism, terms undermined by decades of rhetorical conflict, is not helpful...
A perhaps implausible proposal for a decentralized system that doesn't rely in a market economy with private property (which
most people would consider capitalism): - The Firm in Illyria: Market Syndicalism, by Benjamin Ward, published in The American
Economic Review , Vol. 48, No. 4 (Sep., 1958).
I remember seeing Dr Krugman in a Sunday TV panel discussion on US economic and tax policy. During his turn he spoke strictly
in terms of the merits as policy. His fellow panelist George Will followed him and wisely avoided expressing any opinions about
economic policy and instead made a sarcastic remark about the political chances of implementing the policy being discussed. I
like to think we can discuss policy proposals whether or not they have a chance politically to become law. The alternative might
not even appeal to George Will.
Hey, I think you are talking about China....the proportions are not quite what you suggest (1/3 public) but by incorporating
capitalism into a communist model, they are able to get the benefits of both.
Public manufacture of generic drugs... Where, without competition, would be the incentive for maintaining quality and/or efficiency?
Where would be the incentive for improvement of the drugs themselves - increased effectiveness, less side effects, etc? Orwell's
horse ("I must work harder!") was a figment of his imagination. Krugman forgets just what is the part of capitalism that brings
the most to the table, competition.
@MS Competition for what? Wealth, of course. And we're back to those whose greed will never be satisfied. Why not "cooperation"?
A competition for who can do the most good for humanity.
@MS Is MS really think that competition among the drug lords of big pharma is truly competition ? Reminds me of the book on
Adam Smith's Wealth of Nations with a photo of a huge factory belching smoke on his cover. When Adam Smith wrote his book in the
late 18th century, a factory was ten people making pins.
As I understand it, most, if not all, of the attempts at creating a "socialist" economy haven't really merited the name. They've
tended to be autocratic regimes that falsely used the term "socialism" as a means of suggesting to their citizens that they would
have a more participatory government. They were cynical charades. I would love to see a true socialist element in our economy,
i.e., one that actually placed the needs of the citizens above the needs of plutocrats. Healthcare, in particular, seems to be
an ideal candidate for public ownership. Too many companies today in the field are unnecessarily driving up the cost of care for
all of us.
Krugman's thought experiment here seems to too readily accept that the questioner of "capitalism" knows what they're asking
about, deflected by wanting speculation about whatever else -- supplements? ("mixed economy") Alternatives? I've spent many years
with this issue, if I may say so. One aspect that ready critics of "capitalism" don't seem to appreciate is the difference between
capital-intensive business and capitalISM. The latter is about profit at any cost and tends to be predatory. The former is normal
business whose investors accept a reasonable margin and sustain concerns about employee quality of life, corporate citizenship,
professional ethics, etc. as part of normal business. Normal business accepts a degree of regulatory constraint for the sake of
a level playing field and reliable futures market (in an idiomatic sense), which is required for long-term investment. Libertarian
Republicans apparently regard all regulation as "Socialist," but actually socialism is just a bad theory of democratic republicanism
(small-d, small-r). If one examines the history of so-called "socialism," it's a history of desire for a democratic republic without
much sophistication about making an economy innovative, resiliant, etc.; and a bad sense of government that enables prosperity.
Questioning whether "capitalism" has run its course is an unwitting invitation to have one's sense of economics and good government
enlightened.
It's shocking that an economist finds a mixed economy has to "have a case made for it". It is very obvious that the private
sector is not going to undertake any endeavor that helps everybody and not just its own competitive advantage. And it's obvious
that regulating the private sector doesn't put them on the right road; just from running amok. Infrastructure, healthcare, education,
environment, climate change -- the private sector -- you kidding?? And of course we have the great benefits of Citizens United
to thank for assisting corporations to focus our politics upon what needs to be done. The GOP has succeeded beyond all expectations
in ruining the country by doing favors for corporations.
Socialized agriculture, socialized defense companies, socialized churches, socialized border security walls and socialized
tax cuts are what america has. Republicans are hypocrites. Without the huge government subsidies that farmers get-many many billions,
including but not limited to the 12 billion from trump after china imposed soyabean tariffs, the farmers would all be out of business
by now. Defense companies are financed by ten and even hundreds of billions of pentagon spending. They can't survive on exports
to saudi arabia alone. The pentagon gets hundreds of billions from government when there has been no war since world war 2, other
than the ones it created in vietnam and iraq. Evangelical churches, GOP enterprises. are financed by tax charity, basically by
government and they are socialist organizations. Trump wants to spend 5 billion of tax payer money for a border wall, after talking
nonsense about making mexico paying for it-it would be a socialist border wall. The 2017 gop tax cut is socialist welfare for
billionaires and corporations. It has added 1 trillion to the federal deficit. Trump and his party are the socialist party serving
the top 0.1 percent of the wealthiest.
A mixed economy is the best economic model. Capitalism is purely about profit. A purely private economy would create a society
with a handful of ultrawealthy people, a small middle class and many tens or hundreds of millions of poor people with no basic
health and education services- a system like the one that existed in the king, baron and serf era in england, and in many developing
countries. We would have a trump tower with a corrupt and criminal politician and businessman sitting in it, and homeless people
and slums surrounding the building for miles. Companies would pollute and destroy the air and water with impunity. The air in
the cities would be hard to breathe, and the water would contain poisonous chemicals. Many millions would starve, be unable to
go to school and get health services, and live in dirt and squalor. Global climate change would accelerate and the human species
would soon be extinct. All relations with friends and allies alike would be purely business transactions and russia, china and
hackers would be an much bigger threat than they are. saudi arabia can murder journalists-we will look the other way, just selling
them arms and buying their oil.A purely public economy would give us job security for life, and cheap products and services, but
they would all be poor in quality, and at the cost of higher taxes.When people want free electricity, and the local politician
wants to give it to them,the utility company goes bankrupt.There will be no innovation
For me this is one of the long awaited topics that I have been hoping Krugman would engage; Now more than ever we need discussions
of alternatives to the capitalism we have evolved to with its tacit assumption that it is the best of all possible models and
that growth is essential. Paul do you really believe that growth can be endless without environmental consequences? I would like
to see Krugman wade in on this and especially address newer discoveries of the de-growth movement embodied in stock flow consistent
modeling done by Tim Jackson (Prosperity without Growth) and others that show that virtually zero growth can be sustainable and
perhaps more stable than our current system.
There are 3 basic methods in a modern industrialized societies in which ownership of the means of production can be accomplished.
1. Ownership by a special group, called capitalists, or rentiers is apart from labor in enterprises which produce goods and services.
2. The government can own enterprise and employees like in the British Health Service can be state employees. The state can run
the enterprise at a profit or run it paid for partially or completely by the taxpayer. 3. As in Germany in Part labor can have
a voting share either complete as in a cooperative such as the Spanish Mondragon and ownership can be by the workers with a lead
worker or even Union Official managing the company. Many mixes are possible and all posibilities need to be seriously considered.
This has yet to be done in a serious or empirical fashion
What is the end game for right wingers? If everything is privatized and jobs are insecure, people will be afraid to spend.
And we'll live in a feudalistic society. Think about that before you take away working class pensions to give tax cuts to the
rich.
One of the biggest socialist enterprises in america is the federal reserve board. They poured 4.5 trillion into banks and the
economy to lower interest rates. It has turned out to be welfare for wall street and corporations. Trump and the wall street journal
editors are complaining about this socialism for corporations when they attack and criticize the fed chief. The fed needs to go
back to their main role-containing inflation. Let the stocks drop by 40 percent. The market will eventually adjust. With no place
for their money, and low bond and cd rates, the investors will go back into stocks. After all the fed money sloshing around in
the system has dried up banks and corporations will go back to paying mom and pop investors like you and me 5 percent. It will
be great for financial stability as well. People have been forced to take too much risk in the stock market for years because
of near zero interest savings and cd rates. Safe cds should pay interest rates well above inflation. Mortgage rates were low in
2008 even before the fed intervened. There was no need for the fed to pour in trillions. Fed intervention made sense till two
years ago. No longer-it is just socialism for billionaires. They should have raised interest rates much faster than they have
in the last two years and got out in a hurry. The interest rates are still too low. Mom and Pop investors are making a sacrifice
to make hedge fund managers and CEOs even wealthier.
Actually Krugman sells socialism in America short, as practiced before our Founders formally engraved it in the Constitution
with government operation of the mail. Before the term socialism was coined there were socialized sidewalks, public schools, socialized
fire departments, socialized police departments ET CETERA! with no one back then dissenting from necessary partial socialist governance.
It was only after the Civil War in the rightwing drift against socialism caused by the desires of massive private concentrated
wealth that the socialist menace began to be a thing. It isn't, it never was, tho it, socialism in practice, will continue, the
alternative being the alt-truth of for-profit governance, i.e. Medieval Feudalism sane peoples have long jettisoned as the ne
plus ultra of concentrated wealth incarnate. That's how absolute monarchs appointed themselves as heads of state, rule by the
wealthiest pirates (e.g. Donald Trump) of their time for which little-s socialism has always been the NECESSARY CORRECTIVE.
The rich people want to privatize more and make more money for themselves. Privatizing puts them beyond public scrutiny and
we wont really understand when they are failing us. We have to protect our democartic institutions and make income distribution
more equal.
Technology is about to change society in a most drastic way. Unless the transformation is properly controlled the outcome could
be disastrous. This enormous task cannot succeed without the government setting the strategy and providing the resources necessary
to implement if The Chinese government has defined the goals and is engaged in working out a process of implementation. They have
so far produced a successful version of a mixed economy. We may adopt perhaps a different mix but their example is worth to learn
from
It's an indication of how far we've fallen that an article like this has to make a case for a mixed economy. Even for Adam
Smith it was self-evident that government had a key role to play. When Smith talked the value of free markets he was not talking
about an uncontrolled private sector. He was talking about a new and better system that could be achieved if government would
stop the private sector from perverting the markets--through monopoly behavior and influence over government policy. He was FIGHTING
the kind of nonsense we have today. Krugman is actually arguing for the mainstream against the lunatic fringe. The idea that the
liberated private sector is going to solve all problems has no basis in historical fact. The strength of capitalism is its efficiency
in achieving its own ends. It will not miraculously assure the well-being of the population if government doesn't make it. It
will not defend the environment or educate the population. It will not even provide the resources for its own success. The should
be no question about the need for a mixed economy. It's the only way to get the job done.
I work for a government agency. I have worked for private enterprise in the past. In a very simplistic way, I think the main
difference between the two is that private enterprise takes in money, uses it to purchase goods and services and outputs something
with the purpose to generate more money. Public 'enterprise' takes in money, uses it to purchase goods and services and outputs
something with the purpose of improving (or if you like, maintaining) society. The issue is that money is easy to count, while
literacy and good roads are much more difficult to quantify. Also, I'm always struck by how private enterprise can do whatever
it likes because it has the freedom to completely fail. I think it's easy to use this metric to see where private enterprise is
not really appropriate. National parks, national defense, public infrastructure and so on; we don't want more money from these
things, and they can't fail like Nokia. What is really lacking is a public willing to have an extended and thoughtful discussion
on what we want as public goods, and what we think they are worth.
My real challange for Proff Krugman is to explain how an economy with zero or declining population would work it seems to me
that our capitalistic system needs an ever increasing population.
That is the big, unspoken, truth about the industrialized world that no one wants to talk about or acknowledge: material wealth
tends to lower birth rates. Like climate change, the deniers would have you believe something different, that the world is overpopulated
today and exploding tomorrow. The truth is, while global population is indeed increasing, the rate of increase is slowing down
dramatically, as people exit systemic poverty and enter into relative wealth that is a consequence of industrialization. The implication
is obvious even in our times of protectionism and manufactured xenophobia: if a market economy is to be maintained and there are
limited supplies of workers, we either need to encourage domestic birth rates, or accept the idea of immigration and worker productivity
(and just compensation) as a necessary part of transitioning to a sustainable human presence on this planet. There is no way out
of this conundrum. Just as with climate change, hard choices will need to be made--our desires, wishes, and pet ideologies won't
matter if we wish to provide a decent future for our children and their children. Else, what is this all for?
@David Staszsk : We're approaching 350 million at what seems like breakneck speed. Aren't you confusing the US with Italy,
where the birth rate is barely equal to the death rate?
@Craig Hill But it isn't. While most of the industrialized West is at or below the replacement rate (births/deaths), the US
is one of the few that doesn't have to worry (as much). Why? Our heretofore open attitude toward immigration. But, like everything
else, Trump and the GOP is destroying that advantage as well. Talk to a fruit farmer and ask them about their harvest plans. Their
loss of income due to an inability to hire labor is just the beginning.
Some industries require heavy investment that only Government can provide. How would America produce stealth fighters and aircraft
carriers, and operate them, without many tens of billions of Government spending on a handful of private companies that produce
defense products like Northrop and Boeing ? The pentagon greatly wastes money because of government throwing money at them with
no accountability whatsoever, producing 20,000 dollar toilet seats. The GOP and their supporters do all that while they deny unlucky
and disabled people food stamps. China's massive government investment in the last 40 years, in their export oriented industries,
education and defense has been a huge success for them. The US has been on the decline for 40 years now, because of it's overdependance
on private investment. The US Government needs to invest a lot more in it's people-in education, health care and by attracting
immigrants to cover labor shortages in some areas, to compete with China in the 21st century, but with the 21 trillion debt and
many GOP reactionaries(basically ignorant and some crazy and misguided people calling it 'socialism'). Private companies lead
America's innovation and create new services and jobs, but Government and it's enterprises play a crucial role. If Obama had not
intervened in 2008 GM and Ford would only be found in history books.
Why do we need government ? Companies and their shareholders only care about profit. Left to themselves rapacious and unethical
corporations adopt unfair and monopolistic practices, produce poor quality and overpriced products, and provide substandard services
and cheat consumers. Historically, they have even hired armies, and occupied and impoverished countries in the European colonial
era. Companies, when there is no regulation, heavily pollute the air and water, pouring industrial waste into the oceans and our
drinking water. Global climate change and deforestation, worsened by non-government and destructive government policies is causing
wild fires, floods, droughts and hurricanes, melting polar ice caps, rising sea levels, and higher carbon monoxide levels, and
accelerating at an unprecedented pace. Corporations, overall, do not protect us from our enemies and from hackers(except for a
few defense and software companies).Drug companies and insurance companies keep hiking the prices of even generic drugs that have
been in the market since the 1950s and 70s.Public steel, utility and telecommunication companies. and collective farms have been
a failure however.Often, there is no real accountability for Government money and services, and employees are not motivated, knowing
their jobs are secure even if they don't show up,and a lack of competition results in shoddy products and poor service. But public
schools,universities and local government provide good,low cost services.
Implausible or not, Parecon (for Participatory Economy), a proposal described in the book The Political Economy of Participatory
Economics by Michael Albert and Robin Hahnel, is a decentralized system that doesn't rely on price incentives and self-interest,
The perfect example of the advantages of public ownership is the Los Angeles power company. In 2001, Enron wreaked havoc (and
profited from it) in California's newly deregulated private electricity markets. The targeted manipulations sent prices skyrocketing,
and triggered rolling blackouts elsewhere throughout the state, while Los Angeles remained untouched by any of it. Prices in LA
remained stable, and power was uninterrupted. Another benefit came from Los Angeles Water & Power's independence from a profit
motive. Faced with growing power demand, instead of building a new plant (which would have ensured growing revenues to a private
power company), LA W&P paid for each household to receive a compact fluorescent bulb. The resulting reduced consumption by its
more than 1 million housing units reduced LA W&P's income, but eliminated the need for a new plant.
Thanks for motivating me to read again a clearly written clear-headed history of, and manifesto for recovering, the achievements
of our "mixed economy" - Hacker and Pierson, American Amnesia: How the War on Government Led Us to Forget What Made America Prosper
(2017).
@MarkerZero it is great that you appreciate Jacob Hacker and Paul Pierson. I very much have been influenced by them and quoted
them in my post as well. Check out Jacob Hacker and Paul Pierson; Making America Great Again: The Case for the Mixed Economy"
- Foreign Affairs - May/June 2016)
https://www.foreignaffairs.com/articles/united-states/2016-03-21/making
-...
"Put all of this together, and as I said, you could see an economy working well with something like 1/3 public ownership. Now,
this wouldn't satisfy people who hate capitalism." Perhaps not, but would it satisfy ""capitalists" who hate socialism? Over the
years I have had the pleasure of meeting Americans visiting in Norway who, rather that finding the socialist hell-hole they expected
to encounter, found that things they'd brand socialism worked surprisingly well here. What has often intrigued me has been their
unwillingness to apply, even as an experiment, the "Norwegian way" in their own country. Is there an inherent fear in Americans
of being proven wrong that they cannot live with? Case in point: every year in the wake of snowstorms and rainstorms hundreds
of thousands of people across America lose their power for days and weeks. Why don't they put their cables in the ground where
the wind cannot get to them? Why do they insist on paying over and over and over again to put the cables in the air? Is there
some particular capitalist "intelligence" that dictates that is better to pay $100 ten times over than to pay $500 once and be
done with it?
Our government built the interstate highway system using competitive bidding with private sector contractors. The deign specs
and overall management was the government's responsibility. A fantastic success. WW II was successfully executed by our government
overseeing the military/allies and the private economy to defeat two powerful enemies. They did for the COMMON GOOD of the world
not to maximize profits. When government works it can implement grand achievement. When corrupted by free marketeers nothing gets
done.
In fact, a mixed or (better) hybrid economy should include three sectors of unequal but flexible size: a. the private market-oriented,
profit-driven system, b. the public service-oriented and social equity-driven system, and the cooperate-associative, proximity-oriented
and non-profit system. Each answers a clear needs of human societies, each corresponds to a basic instinct of the species: the
aggressive acquisitive drive of the meat-eating killer, the stability expected by the family-breeding tribe member, the solidarity
and cooperation needed by the pack-hunter. The first is essentially dynamic, geared for progress and growth, the second is basically
static, geared for fairness and predictability, the third is adaptive and responsive to immediate needs. Their relative sizes
should be allowed to vary according to the evolution of social and political life, science and technology, and material survival
conditions -- and political rules should make sure that each survives and plays its role.
@Yves Leclerc I couldn't have said it better myself. Joyeuses fêtes, fellow Montrealer. & while we're at it, let's raise a
glass for Hydro-Quebec, our much-maligned healthcare system & the non-profits who contribute so much to making our lives easier
in our wonderful city. La Porte Jaune, I'm thinking of you.
We should make public all those things necessary for life, liberty, and the pursuit of happiness that, were they left to the
free market, would not be available to one and all equally. We already do that with police and fire protection and public infrastructure.
We should also add health care and education at all levels to that list, for a start.
You have to start by completely discarding the word "socialism." It aborts every potentially useful exploration of any kind
of concept. I know that's not justified, but it's the sad truth. Lots of good ideas could be aired out fairly if called by some
other names and discussed in terms that specifically denounced "socialism."
@John Call it capitalistic humanism, or humanistic capitalism. It should put needs of people before (or at least on equal footing
with) needs of profit. As we used to say in the old days....
Maybe Prof. Krugman owes an apology to Bernie Sanders, whose plan for Sinle Payer Healthcare he derided as "rainbows and puppy
dogs" during the last presidential campaign.
I found this entry by Krugman is awfully weak, but it's not too surprising. Robert Reich, for instance, has a recent short
video out about this issue of when to privatize and when not to, and it's more thought out. I hate to think this, but Krugman's
apparent weakness on this issue seems to reflect what I see is a major problem with the "big media" like the NYT. It's mostly
all Republicans all the time, even if it's total criticism of Republicans, and harsh criticism of Republicans is not the same
as developing alternative views (e.g., Rachel Maddow nonstop criticism of Republicans). You just never hear sustained coverage
about serious alternative ideas and the groups working on them. You have to go somewhere else to see that sort of news. There's
hardly any sustained investigation into what you could call progressive left views, ideas, and actions. The big media is incredibly
biased in this regard, and so it's not too surprising that Krugman, for some reason, seems so incapable of expressing alternative
ideas to privatization and capitalism.
Averous and greed are what drive capitalist economies. But there is nothing in the book of human nature that says they must
be the only characteristics that drive capitalist economies. Why not compassion and empathy?
Hey Paul, Do not cut your "life time" short. Problem with economists or whatever your called is that you can not see what's
coming because you are sworn to look through those broken glasses. Capitalism and for that matter PRIVATE OWNERSHIP OF PROPERTY,
are two of the most ridiculous delusional concepts that selfishness has ever conned us with. I mean, really Paul, how can somebody
who is going to be dead eventually own any "THING". We can not even own our own bodies for that long. All so, this ridiculous
notion is that there is not ENOUGH therefore we have to hoard what we have... BTW Paul, there are an estimated 8,000,000 people
starving to death in just in that Nation that the Saudis want to own. Come on, Paul. It just makes sense for everyone to have
what they need regardless of what some billionaire might thik he/she "owns".
It's been my experience that markets are really good at what they do up until the point at which they are really bad. I keep
a running list of market failures, which includes but is not limited to: police departments, fire departments, public health departments,
pharmaceuticals, journalism, and education. Pharmaceuticals: The fact that we are running out of new antibiotics is a market failure
which can be solved be subsuming new drug development into public health departments (most drug development is government funded
US university backed research anyway). Journalism: The market solution to journalism is the cable news business model which prizes
infotainment, eye balls on the screen, and click bait above real journalism. Real journalism is funded by charitable donations
like paying $44 per month to The New York Times, for example. The market solution for education is that rich people get really
good schools and poor people get really bad schools. If you live in a state with a high GDP per capita you get better schools
than poorer states, for example see the state Arizona. What is the business model for education? If the thing you are producing
cannot be exchanged in a market it has no value. Even pro-free market economists recognized that light houses were considered
public goods and that by collectively allocating public resources for them they facilitated commerce and increased wealth. The
fact that most republicans ignore this today is purely spiteful.
The Second Income Plan provides a Third Path - having the advantages of capitalism while sharply reducing inequality and many
other disadvantages. It can be combined with a Universal Basic Income with no net cost to the treasury. See: SECOND INCOMES at
aesopinstitute.org Here is a path to ending concern about the stock market that makes possible greater returns. 85-90% of an individual's
funds should be invested in Treasury Bills, the safest place to put money on this planet. The remaining funds can best be invested
with modest amounts, as highly leveraged as possible, in a substantial number of high risk opportunities (ideally an Angel investment
portfolio). This is the prescription for investors by Nassim Taleb in his book - THE BLACK SWAN: The Impact of the Highly Improbable.
(See page 205)
" For-profit education is actually a disaster area." The City University of New York is an obviously a prime example of the
excellence of public education if it employs a professor of your obvious ineptitude. BTW, where did you matriculate? If, by picking
any one of a dozen private, for-profit, rip-off colleges you are making a case for public education, you obviously haven't been
working with public school students lately. In my upper middle class community, the public high school, fed by a half dozen public
grade schools, is, with numerous exceptions, nevertheless graduating students who have a mediocre grade school education. And
at least a dozen of the teachers, highly paid and highly protected, couldn't pass an ordinary, private university entrance exam.
I never cease to be amazed at the astounding ineptitude of the public education system, while the private, Catholic system continues
to roll out educated citizens. (I'm not Catholic). A generalization like yours is certainly indicative of the failure of Yale
University.
@Good John Fagin That's odd. So many other countries are doing a much better job in public education. Check out the OECD PISA
results if you want to see how your argument against public education holds up.
Re:Elizabeth Warren's idea of the US government manufacturing generic drugs -it is a great idea. According to Ralph Nader most
of our antibiotics are manufactured in China. That worries me and it should worry you.
Let's face it, healthcare is undoubtedly the 800 pound gorilla in the room when it comes to a debate on the relationship between
public and private economies. Many NYT commenters want to see Medicare for All become a reality in order to cut out all the profiteering
in healthcare, and so that we would have a universal national one size fits all healthcare system. To this I say that Medicare
profiteering is rampant with waste fraud and abuse by doctors and hospitals accounting for as much as 40% of Medicare's costs.
So, if we really want to socialize healthcare, and take care of everyone, and control the costs we already have a national healthcare
system. It is called the VA. In the VA the government owns all the hospitals and all the medical staff are government employees.
We really need VA healthcare for everyone. Again, if one believes that socialism is the answer to solving our largest crisis,
healthcare, and we also believe that no one should ever profit from providing healthcare, then VA healthcare for all is the only
option.
One important rule to understand the capitalist-socialist dichotomy: Capitalism has no national allegiance; socialism is required
to adhere to political allegiances
It might be pointed out that even Adam Smith would have supported most of this. His primary thesis was that government has
to set the rules or the private sector will go off perverting the free market he so valued. He also had no illusions about the
private sector delivering education, social services, or other necessary functions. This idea that the unchained private sector
is the solution to all problems is not free market economics -- it's wildly radical nonsense. The private sector, left to its
own devices, will undermine the free market and the conditions needed for its success.
Well, my view is that "capitalism" and "socialism" (or "communism") do not exist and never could - over the longer term. The
flirtation with "communism" was (or is) a "flash in the pan" relatively speaking and pure "capitalism" would be similarly disastrous
if tried - consider the near attempt of the contemporary United States. In other words a "mixed economy" or "social democracy"
is a "no-brainer" - and I think it a major embarrassment to the humanity that any of us thought differently in this our modern
era. We are unfortunately seemingly naturally inclined to "black and white" or "all or nothing" thinking - but we can be schooled
to overcome it for our own benefit if we so allow. Much of the sad experience of the last 150 years - and particularly the last
80 - could have been avoided if one Karl Marx had not been a chauvinistic and egotistical nationalist who wanted to go down in
history as the father of a revolution in Germany that would be much bigger and better than the one in France. He wanted the "workers
of the world' to "unite" simply for his glorification I contend. We might have had no fascist reaction, no fog of cold war. And
a lot less dead in hot ones. Imagine. Much of the world now could have been an international association of interconnected and
peace-loving social democracies of highly educated, civilised and ecologically concerned citizens like Denmark and Sweden. Imagine
again. All lost because of one man's intellectual dishonesty and obstinacy.
"And I'm sure I'm missing a few others." Banking, for goodness sake. The idea is catching on, so get out of the way. For starters,
how about allowing the Post Office to do some local loan business to take away the awful people who do payday lending at very
high interest rates? Lobbyists for that lot should be thrown out.
@Bartolo Indian government just inaugurated India Post Payments bank. India Post is equivalent of USPS. Virtually every village
has a post office. Banking reaches everyone. Profits - minimal. But with limited options (savings, CDs, monthly income scheme,
pension distribution , small loans only), to ensure the private banking can continue with all the fancier products, bigger loans
etc.
Socialism isn't a failure in happier countries than ours: Sweden, Denmark, Finland, for instance. They have a mix of private
and public ownership of essential services like healthcare and education. And social services. For profit healthcare is an oxymoron.
Profit always wins over good healthcare and slicing and dicing services and procedures to squeeze every nickel and dime out of
them leads to very bad medicine.
The worst part of capitalism is extreme concentration of wealth in a few hands, further aggravated by foolish taxation policies.
Quality of education is uneven because of wide variation in local resources. Uniform federal funding of education would solve
this problem. Same applies to healthcare. Equal level of healthcare is possible only by a single payer system such as Medicare.
Public health which ranges from providing clean food, clean air, clean water, and vaccinations to garbage collection and dispositions
is a matter that is better publicly handled. Continuous reeducation of workers displaced by automation or outsourcing is another
matter that capitalism has ignored. Cremation or burial need to be publicly funded for those considered indigent when they were
alive.
The devil would be in the political mayhem that would take place as we decide what should be capitalist and what should be
socialist. Even if you base the decision on answering the question "What does every person need to live in this world?" you will
have massive disagreements. Insurance is inherently socialist - it requires everyone contribute so that the ones who need $ can
get it when the need it, on the theory that sooner or later we're all going to need it - but look at how insanely people (and
corporations) have resisted Medicare for all and even Obamacare. On the other hand, the liquor industry doesn't need to be socialist
- everybody doesn't need it and won't need it if they don't want it.
@Brookhaw Ever consider checking out how other countries do things? You can't skew the statistics forever by stacking everything
in the hands of the top 20-30% & still consider that on average, you're doing better than everybody else. The success of a few
outliers do not a functional country make & no, you don't need the oil revenue of Norway to make sure that the basic needs of
all citizens are met. It may not be easy & it's probably too late for the USA, as it takes generations of stability & hard work
to pull it off, but the most successful countries in the twenty-first century either did just that or are trying very hard to
do this well.
Socialism works if you have oil like in Norway where there's a trillion in surplus in profit. With 5 million population you
could have train service everywhere and elder care wherever you look. Wait they do have poverty. Never mind. Democratic Socialism,
neither Democratic or Socialist, could be done here. But when the deficit reaches a gazillion and Alexandra Ocasio Cortez appointee's
are running Ford and trying to select next years colors and mpg ratings why not cancel the government debt. It's not new it's
even in the - you guessed it, the Bible. Wait a second being a billionaire is so common. Who wants to be a trillionaire?
I hate capitalism. I want something better. Capitalism is greedy, completely materialistic and gives no regard for human values.
The earth and human civilization cannot survive unregulated capitalism, and capitalists don't care. Either we will create new
ways of living or catastrophic environmental collapse will bring human civilization as it exists today to an end.
This is where liberals lose me. Sure there are areas of the economy that should be run by the government. Health care definitively
is one of them (or at the very least a public option) But advocating socialism as opposed to social democracy is a NO NO. Last
country that when full blast socialism was Venezuela 20 years ago and look at the results. Many other disastrous examples abound,
Cuba any one?
Capitalism's strength is wealth creation in the hands of the few, who then use this wealth to further enhance their wealth
via control of governmental policy - all of which is contrary to the needs of the many. People who think a lot deeper than Krugman
question whether it makes sense to talk about democracy in a capitalist society - and there are academic studies that support
this. See: https://www.thenation.com/article/noam-chomsky-neoliberalism-destroying-democracy
/
https://scholar.princeton.edu/sites/default/files/mgilens/files/gilens_and_page_2014_-testing_theories_of_american_politics.doc.pdf
Regarding socialism, the concept implies bottom-up control of policy which has only been achieved briefly, on very small scale
in societies and in history of which most are unaware. Dominant capitalist societies have attacked countries economically and
militarily that have tried a socialist model. Whether these would have eventually adopted a bottom-up power structure is unclear.
I agree with Paul Krugman, generally. But the issue respecting 1/3rd socialism and 2/3rds capitalism is that the socialist
sector would be the servant of the capitalist sector that would suck the life blood (tax revenues) needed to sustain a productive
health and education sector. One only need look at the military-industrial complex (MIC) to support my observation. The DoD spends
"Huge" taxpayer funds to support global military dominance. How much of that (socialist) military budget is contrived by capitalist
politician-lobbyists and over-spent with the blessing of the (socialist) military establishment that is recharacterized as "profit"
is anyone's guess. The socialist Defence Budget, and privatized NASA budget, fall outside the normal bounds of markets as the
buyers of these goods and services tend to be sovereign governments and sovereign corporations - TBTF. Eventually, retiring military
leaders that sanction budget directives that enrich capitalist corporations that make these military 'assets', end up post-retirement
as directors or officers of the MIC - i.e. Dick Chaney did well swinging socialist government business toward his business interests.
I accept Krugman's estimation that a minor portion of government-associated business can cut-out the middleman and become more
transparent and cost-effective producer of social goods and services - but only if there is an independent board and executive
team NOT expecting "fringe benefits" doing so.
Well, let's be honest, the "socialism is failure" paradigm is based on the corrupt and totalitarian regimes of the Soviets
and Eastern Europe. Yes, they failed. We know that. But Jesus, can we advertise the successes of Socialism for a damn second!!!!
C'mon, use the old brain. It is mixed economies that have yielded the best set of results in the modern era. There is no question
about that. Can we stop with the inane arguments! A certain amount of socialism is good! Let's debate the right balance. Fine.
But I'm sick of litigating the idea that some socialism is good.
One question that I think doesn't get enough attention is: Can capitalism exist without the need for constant growth? My intuition
is that it can, but most people regard the assumption of constant growth as a law of nature.
I am happy to see someone point this out. The mantra of growth is, ironically, the one thing agreed upon by all political persuasions,
but it's actually the least sustainable approach that could be imagined. I'd like to hear how capitalism might exist without it,
but even more I'd like to hear of any long-term workable system that's compatible with a steady state rather than unlimited growth.
@Chris Winter and John Steady-state economics has been seriously proposed. There is a non-profit dedicated to its theory and
implementation: the Center for the Advancement of the Steady State Economy,
https://steadystate.org/discover/steady-state-economy-definition
/
Every human activity needs some sort of regulation to prevent exploitation of the vulnerable. Also, those portions of incomes
so high that they can't possibly be spent need to be transferred to those who will spend them. That keeps the money circulating
so that everyone benefits. This is what is needed, not arguing about public vs. private. Every activity can be private; that's
fine. But every activity also requires oversight to prevent harm to others. Unfortunately, people will tend to misbehave if they
can get away with it.
What is ignored in this innocent debate is the finicky nature of politics. The political swings from say, Kennedy era public
spending to Reagan era private enterprise along with a degraded view of government, can wreak havoc on those dependent on "government".
I think of my friend who benefited for years on a "minority owned business" provision to get contracts for his business. He believed
it was an entitlement. Then the Bush Administration cut out that provision and he ended up living out of his car. The lesson is
always: Don't get dependent on government.
The argument against socialism is totally disingenuous and purely tactical. "Socialism" has been purposefully cast as the "other"
in financial systems, exactly the same as foreigners have been cast as the "other." Socialism has always been a part of our democratic
(not capitalistic) system. Building infrastructure, public education, public transportation, public health, public law enforcement
are all socialism. Anti-monopoly laws are socialism. One can be reasonably certain that as soon as labels are used to evaluate
policy rather than content and benefits it is a "red herring" argument to distract from opportunism by the perpetrators.
@BB It could be argued that the United States was built through socialism. The Founding Fathers enshrined a national, government-run
mail delivery system in the Constitution that united the states. President James Monroe expanded the mission of the U.S. Army
Corps of Engineers from building coastal forts to surveying and improving inland waterways in 1824, helping to open the western
frontier to expansion. President Abraham Lincoln and Congress provided taxpayer-funded grants and government-backed bonding as
incentives for private companies to build transcontinental railroads and telegraph lines, uniting the continent. President Franklin
Roosevelt used taxpayer funding to subsidize the expansion of electricity into rural areas, bringing large portions of the country
into the 20th century. President Dwight Eisenhower proposed a taxpayer-funded interstate highway system that made America's a
truly national economy.
I suspect the only segment which can tolerate the inefficiency of humans is the government. Private firms will always seek
the most efficient means to provide goods and services, thus the push to automate and deploy AI. There is nothing wrong with this,
for example, the time saved using self checkout with portable scanners is wonderful, of course there are displaced workers.
@Awake Private firms always seek the most efficient way to make money. The mission is to make more money than last year. To
increase shareholder value. That is the extent of it.
@Awake You apparently have never worked for a large corporation. I have worked for three different corporations that had annual
budgeting procedures that were so inefficient it was often well into March before workers had anything to do. As a contract consultant
I spent eight months on contract doing nothing while management considered which of two alternatives plans to implement. I have
worked for a corporation where the internal charge for parking within the basement of a company owned building was far higher
than the rates at commercial parking garages within a few blocks, so the manager of the department with the most company cars
moved them saving his department money but decreasing the company's bottom line. I worked for a company where it became fashionable
for executives to send documents to one another via FedEx overnight instead of via interoffice mail. Sorting took place in Memphis
instead of the basement and the documents arrived two or three hours later or if the documents were ready early enough in the
day, twenty hours later.
@Dink Singer: As you correctly note, large bureaucracies have inefficiencies regardless of whether they're publicly owned or
privately owned. The Dilbert strip shows private enterprise, after all...
From a cost efficiency standpoint, more public control of some industries is easily justified. The part of the puzzle that
hasn't been solved is innovation. Without incentives brought about by capitalism, Google search, smart phones, YouTube, tablets
not to mention thousands of applications making your phone or tablet or PC so useful, would not arrive in 100 years let alone
one generation.
@Tom from The most patient investor in R&D is the federal government. For the obvious reason that more than 90% of R&D just
proves what does not work. The CIA helped fund some of the original research that ended up being Google, and an Italian college
professor (paid for by government money) made an important breakthrough as well. Read Mariano Mazzucato's The Entrepreneurial
State.
@Tom from Chris below goes no where near far enough. The entire technological platform on which Google, smart phones, YouTube
and the rest rely would have taken at least decades longer to develop without Government action and support. There quite literally
would not have been a "Silicon Valley" without the massive government investment in aerospace and defense in the 50's and 60's.
@Chris Herbert - Exactly right. The initial spadework -- fundamental research in materials, computing, biology that has led
to technological revolutions, was funded by the government usually without any vision whatsoever of the end application. It is
this that we are in great danger of getting away from, in doing applied research with an immediate end in mind (e.g. magic bullet
drugs for cancer).
A more realistic solution that wouldn't require the consent of our lawmakers would be to set up private companies that don't
operate soley on the profit margin, and instead work to provide a good or service to the public better than the current players;
treat their employees well and not pollute, cheat, steal, etc.; and provide a reasonable rate of return for investors (7% or so),
with any extra profits being split up and reinvested, given as bonuses to workers, investors, and consumers, etc. by a predetermined
formula. Western Europe gives lie to the argument that socialism doesn't work, but anybody who has been paying attention knows
lawmakers and their handlers will not abide by it, and sabotage it first chance they got. Instead we can set up a sort of private
socialist system, to compete in areas where the profit motive doesn't provide for the best outcomes, in areas like alternative
energy, internet cooperatives, drug discovery and manufacture, insurance cooperatives, etc. Graduate schools could be set up as
such allowing people to use their school money and the assets of the school to invent new products that could be then brought
to the public under such rules. The private sector would be free to compete, but the profit motive wouldn't be the only game in
town.
I have imagined a pair of such systems. One can't exist without the other. They are called Faction-Free Democracy and Democrato-Capitalism.
They are based on the fact that our supply of money is unlimited. I have been preaching this gospel for years, including comments
on this blog. I finally wrote a book about it called "Faction-Free Democracy." You can look it up. It provides government funding
for almost everything, and models the government on the democracy of ancient Athens. Many people call it "socialism" but in fact
it is a real democracy instead of the phony one we have now, which is, according to the Framers, a republic. Yes, it is possible
to have a government modeled on Athenian democracy. Computers don't you know. We could have a world-wide democracy if we wished.
It provides a Social Security Lifetime Supplement of $36,000 per year per citizen from birth to death. Don't be scared, check
it out. To paraphrase Keynes: "The new ideas expressed here are extremely simple and should be obvious. The difficulty lies, not
in the new ideas, but in escaping from the old ones, which are now intertwined in every corner of our minds, and do not wish to
be disturbed."
If what Prof. Krugman were to happen in the US, it would just make them a bit more similar to European nations. Nothing revolutionary
in European views, but definitevely so for the American mindset. I think it would also make the US a stronger a more cohesive
nation. But expect private interests getting in the way of that by all means.
Private individuals and self interest are of course abstractions that do not stand by themselves in reality, apart of the common
sense ideology. They are mediated by social activities (via exchange -selling my capacity to work or buying what I need in the
market). I don't produce something to consume it myself, as in earlier economies of self subsistence. The computer I'm writing
on was made by others. Therefore I depend on others' products to live in society as I am not capable of producing my own means
of subsistence. The social wealth (all the products of use) produced by the collective worker (all of those who work for a wage)
is though appropriated by private individuals. But that is only a phenomenon that exists in a society where the means of production
are individually appropriated. This happens even in China despite its "socialist" or mixed "economy." So socialism is not just
the collective ownership of production means. It is the democratic control of the same, which does not happen under the regime
of capital accumulation (even in those 'state owned enterprises'). The baptism of fire of capital was the dispossession of lands
held in common by peasants in England starting in the xv century They were freed from their means of production and forced to
work for others. This operation has been repeated since then-even in China as recent as a decade ago. Those cities, roads, and
factories were made with the work of newly "freed" labor from the soil they used to till.
Krugman says socialism is an utopia or it does not work based on the experience of the former Soviet Union or currently in
China. Both are examples of centralized economies rather than socialism where the means of production (land, factories, technologies,
etc) are democratically controlled. Indeed, this centralization has favored the concentration of wealth produced in those two
areas of the world. The Russian oligarchs and the Alibabas come from somewhere, and the state has been there to help them along.
So let's keep apart the idea of socialism as a way of producing and appropriating this product from the form of government that
either fosters or suppresses it. There is not a clear example of the former. All the existing governments have so far mostly suppressed
socialism as a mode of production despite their name. The so called mixed economies were the result of the truce between capital
and labor after ww2. After that truce ended in the 1970s with low profitability capital has taken the offensive with both neoliberalism
and globalization, which ran out of steam in 2008. We are now facing the dystopia of a capital regime in trouble and unable to
deal with catastrophic climate change, the global poverty it has produced, the millions unemployed in the global south or precariously
living in the midst of concentrated wealth like in the US, and the demoralization produced by this social malaise Economists need
to deal with this dystopia and stop living in denial.
Professor Krugman are you not looking at the data? Total federal, state and local government spending was 37.9% of GDP in 2014
( https://data.oecd.org/gga/general-government-spending.htm
). The largest shares go to my mom and my kids (thanks taxpayers!). Government expenditure is not the same as GDP but are
you saying we should shrink government by 15% (5% of GDP) or grow it? If more money flows through DC (or, for this Californian,
Sacramento), will additional lobbying for regulation delivering rents to unions and corporations be worthwhile? Lack of antitrust
enforcement is doing more for the top .1% and to the bottom 10% than anything but maybe our silly tax code. Please think and write
more about that.
I think many sectors could benefit from a greater role for cooperatives: one-member-one-vote rather than one-share-one-vote.
Also, there could be mandatory inclusion of labor and public members on corporate boards. The current private sector model is
focused on growth, rather than service or maintenance, and typically has a very short time horizon. If our goal is sustainability
over the longer term, we need a better mix of governance and finance than at present. I completely agree with Dr. Krugman about
the need for better structures to meet public purposes such as health, education, utilities, and a basic social safety net including
housing.
The positive feedback loops of so-called network effects are concentrating economic and political power into black holes of
incredible wealth. When things get too out-of-balance, society, like an ecology, disintegrates. A mixed economy can help maintain
that balance. But, as things are going, it looks increasingly like many, many people are going to suffer first until some form
of balance, social, economic and ecological, is restored.
My suggested guideline is simple. If an organizations highest priority should be to be the public it should be socialized (tax
supported). If an organizations highest priority is profit its private. A healthy mixed economy is in our future. We just have
to make it happen.
It is amazing that Paul is a bit embarrassed to say the private sector isn't able to do everything well. It is sooo clear that
most of the big problems of this Country are a consequence of government being unable to do what has to be done. Of course, the
GOP doesn't want to do anything. But infrastructure, opioid addiction, health care more generally, education, research, the arts,
foreign policy, and politics in general are not where capitalism shines. In fact, simply making a profit very often isn't a good
motivator when it makes providing goods and services simply an expense instead of an objective. Facebook, Google, Twitter, YouTube,
Instagram are cases in point, where the money motive has corrupted large portions of these enterprises, driving out responsibility.
The issue we need to discuss first is corruption. What else can you call the fact that our representatives are for sale to
the highest bidder? We the public are clearly not capable of being represented in that system. Thus we are not. The issue of socialism
vs capitalism is totally misrepresented by most commentators and media. If we define socialism as taxpayer funded programs for
the public we've had the mixed economy Paul suggests for many years. Social security and medicare are the most referenced but
there are many more; public schools, the post office, libraries, museums, highways and roads, water, sewage, parks, local police
and government services..... But our unrepresentatives have shifted socialism on behalf of the public to socialism for the corporations,
subsidizing many industries like oil and agriculture while vilifying socialism on behalf of the public. The military and the banking
system are the most aggregis of the socialized, consuming over half our GDP. None of this will change until we deal with the corruption
of our representatives. Paul is stating the obvious, a mixed economy currently serves both the public and private sectors, but
is under relentless pressure to go private. Public institutions like schools and prisons have already been privatized. But when
we get our representatives back we have to decide what it makes sense to socialize and privatize. My suggested guideline is simple.
@Ed...if we get our representatives back. Absent another FDR and an overhaul of the democratic party that will embrace a New
Deal, the democrats will not dominate our governments and remain beholden to the same interests that prioritize short-term gain
over even their own long-term interests.
According to my cable-internet installer, a) Ethernet has defeated all other network protocols, b) Ma Bell was broken up over
long distance, a topic no one cares about anymore, c) no one can make money delivering generic IP packets, so d) the government
should re-create a national monopoly on fiber to homes and businesses, and e) bid out the installation and operation to local
contractors. This would allow one big govt-run system (furnace) and all the installers and network operators would still have
jobs. Happy Holidays.
Protecting our natural and cultural resources will unfortunately require a degree of protectionism. But this is a more sustainable
solution for both our country AND the rest of the world. If we can favor LOCAL COMMERCE through local/municipal, county and state
governments that preferentially support local/small-scale business, our carbon footprints and carbon sequestration figures, for
examples, would improve. Federal-/national-level governance and multinational capitalism are, in concert, destroying the planet.
Fortunately, our resource-richness allows us NOT to have to compete with the world's lowest bidders, in terms of exploitation
of workers and the environment.
@carl bumba, Yes we should try to think more locally, but moneyed interests think and act in concert globally, and a local
mindset where we ignore issues that don't affect us directly leaves us all at the mercy of the globalists.
In the 1920s, the British government initiated what was in effect an experiment comparing public and private design and manufacture
of an airship. This was before improvements in airplanes made airships obviously uncompetitive. The government designed and built
one airship, the R101, while a private corporation designed and built another, the R100. The government airship was a disaster,
literally. 48 people were killed when it crashed on its first attempt at a really long flight, in October 1930. Neville Shute
Norway, an engineer who had worked on the R100, later said he believed one of the big advantages of the private airship was that
it was under the scrutiny of suspicious government safety inspectors. The engineers building the government airship were not subjected
to the same hostile scrutiny by the government--after all they were the government--so they were able to get away with things
that should not have been permitted.
Neither pure 'capitalism' nor pure 'socialism' (or whatever may lie at the other end of the spectrum) have existed for centuries.
The unregulated seeking of profits, just as a centrally controlled economy, would be disastrous in any country and we do well
to understand the benefits of a mixed economy. The political economist Charles Lindblom "once described markets as being like
fingers: nimble and dexterous. Governments, with their capacity to exercise authority, are like thumbs: powerful but lacking subtlety
and flexibility. The invisible hand is all fingers. The visible hand is all thumbs. One wouldn't want to be all thumbs, of course,
but one wouldn't want to be all fingers, either. Thumbs provide countervailing power, constraint, and adjustment to get the best
out of those nimble fingers." (Jacob Hacker and Paul Pierson; Making America Great Again: The Case for the Mixed Economy" - Foreign
Affairs - May/June 2016)
https://www.foreignaffairs.com/articles/united-states/2016-03-21/making-america-great-again
In comparative economics courses at US universities during the 1970s, large utilities experiencing decreasing long-run average
costs (like power generation/distribution; telephone companies; certain aspects of airliners; etc) and certain other production
where firms might have large numbers of employees, were hinted-at as prime candidates for being [quasi-]publicly sourced. What
the resulting system was called seemed less important than output and cost (Pareto, Nash, other) efficiencies. In some countries,
such industries flip back and forth between private and public production (or finance) over the decades, rendering those nations
characterized as more or less socialistic or capitalistic at the time, depending on how the highest profile firms are supported
by whatever prevailing administration (or ownership group) has power. This also can do wonders for public deficits and accumulated
debt in a very short period of time.
What about the broadcasting industry? Imagine watching television with programs not being broken up by commercials. Nowadays
is seems as if half of program time is taken up with commercials. Imagine having the quality of news, public affairs, and entertainment
approaching that of the BBC. A very intelligent and competent television producer reminded me many years ago, "Television is not
an information and entertainment medium, it's an advertising medium." We almost had a total national public broadcasting system
instead of the small sliver we have today . Congress narrowly supported the private system when the issue was decided in the 1920's.
Too bad it went that way.
@Bill So true. Then maybe we shouldn't reflexively trust corporate news, like NYT, to provide us with unbiased truth. For example,
many people here seem to adopt views about "fly-over country" without ever really knowing it, firsthand. Likewise, readers' opinions
here seem to be frequently formed by comparisons between REAL people (who are not Trump supporters) and DEPICTIONS of real people
(who are Trump supporters). This is problematic.
Paul's totally on target and the timing just might be perfect. Hopefully, he and others can build on this with actual examples
of other modern countries that have made this transformation successfully and the Democratic Party could finally UNITE around
a prudent vision for the voters .. . the two key words? Prudent and UNITE.
this brilliant and important piece misses a key phrase: the natural ecology. under pure capitalism the earth & the life support
systems it provides have no monetary value. therefore they exist merely to be exploited (and destroyed) for private profit. in
the long run such a system will doom us all. in fact, you could say in the short term it's already doing just that.
The primary arbiter of the effectiveness of free markets must be the presence of effective competition. If natural forces or
regulation do not insure effective competition in a market segment then the interests of the consumer must be enforced by regulation.
If regulation does not suceed public ownership is the most obvious alternative. The common belief that, if unregulated, markets
will function to the benefit of consumers and, on a larger scale, societies, is woefully misguided.
Retirement is a major area that could benefit from public ownership and control. Think of how much 401(k) gains are lost to
the private financial services industry. Think about how much lower administrative overhead Social Security has than private financial
service industry companies. Think what an expansion of the Social Security social insurance model could do to resolve the retirement
crisis.
As a teacher of economics I am wondering the same thing. Are we at a point where economies are so large and complicated, and
prosperity is so great (though not for realized for everyone), that some new economic system is called for. Call it "creative
destruction" turned towards the economic system itself.
Just by the mention of a ratio of 2/3:1/3, Mr. Krugman illuminates his belief that, no mater what perils capitalism may bring,
it is still twice as better than an economy that is heavily controlled by a government that is by and for the people. Eventually,
we may have a government capable of leading the economy, but for now, and without any evidence, commentators like Mr. Krugman,
cynically let us know that we should mostly just stay the course and give our money to the profit seekers. here's another way
to think about this: not only could all the people working in health care be public employees, but they and the people who need
medical care (all of us) could have our care subsidized by the creators of the drugs and diagnostic tools that save us. It is
important to remember that in health care there are statistics that show specific percentages of those subjected to certain drugs
or tests are actually harmed by those drugs and tests. It seems reasonable that those manufacturers should be in partnership with
the government for (and on the hook for) costs associated with their imperfect products. That is more of a real public interest
led economy where capitalism, because it harms people (as part of its nature), is humbled by the public good to subsidize their
mistakes and support the health of the citizenry.
@rick Let's see. You want the drug companies to underwrite the cost of patients who would receive their products. I think the
drug producers would love that scheme.
The socialist-capitalist, mixed economy, discussion in America is long overdue and, contrary to Prof. Krugman's guess that
it would be "probably irrelevant", quite relevant indeed. The Chinese economy is the leading capitalist-socialist economy: "Real
GDP Growth YoY data in China is updated quarterly, available from Mar 1992 to Sep 2018, with an average rate of 9.2 %."
https://www.ceicdata.com/en/indicator/china/real-gdp-growth
The World Bank illustrates the difference in GDP percentage growth since 1960 for the U.S. and China. Clearly, the Chinese
will over-take U.S. economy (GDP) in a matter of decades - likely when a millennial becomes President of the U.S. and China.
https://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG?locations=CN-US
Despite the evidence, Americans still think that the U.S. will defeat the historic odds and remain the world's leading economy
and military power that it is today. In a world of increasing militarism, the future is uncertain. With unabated sustainable growth
of GHG emissions, millennials will need to get involved in politics sooner than any prior generation: their standard of living
is at real risk, they are part of the solution. The present U.S. Trump administration's denial of the science behind global warming
and climate change is the problem.
Some areas should be free market: Any area where there is clear competition -- e.g. automobiles. Some areas should be either
government owned, or tightly regulated: Utilities fall in this category, as it is very inefficient to have competition in electricity,
water, sewer, or wired communication. Cable TV would have fit in here 20 years ago, but there are enough other alternatives that
this is no longer the case. Some areas where the industry has an impact on the common good -- businesses that pollute come to
mind -- need regulations that govern that aspect. Any business that is "too big to fail" should get bailed out once: And then
broken up into at least 3 smaller companies. Other areas of regulation: Overlapping directorships within an industry. Banks should
not be in the insurance business. Nor in the stock selling business.
Krugman fails to mention the that most of the 2/3 capilaist portion of the ecomony he talks about isn't really capitalism,
it dominated bystate sanctioned monopolies. No one really believes in a ture capilaist economy, if they did they would be arguing
for the elimination of the largest distortions to a capitalist economy in the United States; tradmarks, patent, and limited liability
corporations. these three distort from a freemarket truely capitalist economy much more than wlefare, public education, regulated
healthcare. The government regulation inflicted by these three government mandates is much greater than Obama care and welfare
ever could be.
The question of "how discredited is socialism?" is odd. "Discredited" by whom? and in what context? Ronald Reagan crisscrossed
the country on behalf of the AMA, fear-mongering about ending freedom forever because the AMA hated the idea of socialized medicine:
Medicare. Today, many Americans seem not to know that original Medicare is a government-run program (socialized insurance, not
socialized medicine) -- less expensive to run, higher quality results, better at controlling costs -- far better than the wolf-in-sheep's
clothing Medicare Advantage programs that socialize risk, privatize profits, and make mountains of money for shareholders/execs.
Polls show Americans have become far more comfortable with govt-run healthcare -- hence its importance in Nov18 ... and likely
continued importance in 2020. And, last time I checked, Warren's drug manufacture plan included more than generics -- e.g., new
drugs with insufficient profit potential -- for rare diseases, or that cure, or that will be used rarely (like new antibiotics).
I'd prefer Prof. Krugman spend more time on economic explanations -- not worrying so much about political feasibility, prognosticating,
and inflammatory labels. Maybe then he'd discuss economic, public policy -- and moral -- benefits of the NY Health Act, "Improved
Medicare for all NYers," better than any current public or private insurance. If it becomes law in 2019, the feasibility of national
single-payer will no longer be in question...just the terms.
Capitalism begins to look a lot like state socialism when there is heavy concentration in the industry, for example, only one
commercial jet manufacturer or only one military fighter jet manufacturer or High tech controlled by Amazon, Google, Apple, FaceBook.
Capitalism works when there is competition, not monopoly. We are not as purely capitalistic as we like to think.
Free education for all advanced by Bernie Sanders is a first step that is needed. This is neither a socialism nor a capitalism.
We have Medicaid to take care of poor. It is just a matter of adequately funding it. Next, setup public works program where unemployed
can work for food stamps. Provide more public housing. This guarantees the basic necessities of food, shelter, education and health
care. Pay for it by reverting to taxation of 60s. I don't know whether it is socialism or capitalism, but it certainly is a basic
function of the government to take care of its own citizens.
We're at a point where a globalized administrative and distributive system can be successfully implemented. The only thing
in the way is capitalism, and private ownership of the existing first steps, twisted to the will of the super-elite. All we need
to do is turn that system into a global, public set of utilities, whose purpose is service, not profit. When the need for capital
accumulation grows to handle macro problems, it can be managed more efficiently this way, without the massive drain of corruption
that has heretofore hobbled all such efforts. The truck is going to be to make this system responsive and coherent, and that will
involve far greater integration of existing financial systems and processes into other service organizations, to make them useful
platforms for exchange management instead of the bubble casino fantasies built for the few they are today. This is an entirely
feasible proposition, and is only impossible because of the desperate, self-serving greed of those now owning it all. Remove them,
and their ownership, as a significant first step, and the rest becomes far more obvious soon thereafter. Or, continue living in
the clouds hoping a few useless tweaks will fix a broken global capitalist order. The stay will, however, be short, and the fall
is a long distance.
The fundamental problem with the idea of a mixed economy maybe be with the politicians who are advocating for it. Consider
at this moment, Jeremy Corbyn in the UK and the Brexit mess. No one has contributed less to that problem than Corbyn and the Labour
Party. Or here at home, Bernie Sanders. Nice guy whose ideas harken back to Norman Thomas -- a wonderful man and perennial candidate
for POTUS who never won. The message about a mixed economy has and has lacked a spokesperson who can make its case and get people
to vote for them.
The problem as I see it, Professor Krugman is that there ARE people who believe that Gosplan and the Great Leap Forward, or
their equivalents, are the answer. While most are in College classrooms there are an increasing number of 20-something congresspersons
among them. They are too inexperienced and uninformed even to imagine the ways in which their cherished solutions are and have
been disasters. We are currently living through a national nightmare with thuggish real estate developers in charge of things,
but coming out the other side into someone's rosy vision of the Worker's Paradise is certainly not the answer.
I would like you to include a small sliver for co-operatives. I grew up in a farm community where a a co-op was a major source
of seed etc. Later I lived in a cooperative community where both our homes and local grocery store was a co-op. These are just
a few examples of how co operatives are used to supply basic and essential components of daily life without a profit margin.I
even get a check now and then when the grocery has a "profit."
I grew up in a military family that has fought every American war in history. Healthcare for us was provided by the public,
not private. The military provided public, not private education. Is the military socialist?? No. It's a combination of socialism
and capitalism, and it works.
Advances in medicine is an area that works amazing well through a public-private hybrid. In fact, biotech and big Pharma companies
even lobby for strong public sector funding for basic medical research. Why is that? Well, basic research has been the economic
driving force of this country where all the most important scientific advances have come from. However, it makes no sense for
the private sector to fund basic research (unless they are a charity) because it is unclear whether advances will quickly generate
a profit. However, without such advances, the private sector will dry up because they won't fund this type of research. See where
this is going. On the other hand, it is easy to justify public funding of basic research because 1) it trains our next generation
of cutting edge scientists and engineers; 2) nearly all discoveries that power the next "big thing" that transforms our economy
comes from basic research; 3) many basic discoveries are quickly converted into products and companies, again, driving the economy;
4) the most competitive countries have strong basic research. Even China, which is notorious for stealing technology and violating
IP, is investing heavily in basic research. This is just a model where even the private sector says the role of the public sector
is essential. If we can accept this fact, why can't we accept the fact that there are other areas that can't be done as well in
the private sector as it can in the public sector?
Professor, you're position is actually a restatement of "Rockefeller Republicanism." Named after Nelson Rockefeller (former
Vice President and NY Governor), Rocky's version of Republicanism believed that the government that governed least, governs best,
but with a big "however." Rockefeller knew that the markets we're imperfect, did not address every American's needs or desires,
and in some cases, failed miserably. He believed government had a role in the economy, but that did not necessarily translate
into large government organizations employing large numbers of public employees. Rocky pioneered (at the time) new, innovative
ways to address market failures like the quasi-government corporation. They worked by the government setting up a publicly owned
corporation, loaning the entity tax dollars "start-up" finds, and giving it a clear, simple mission. Take the NYS Thruway Authority.
Before there was an interesting highway system, there was the Thruway Authority commissioned with construction, operation and
management of limited access high-speed roads to connect the state's major urban areas. The initial taxpayer funded investment
was repaid via tolls paid by users. Expansion and maintenance was done by floating binds on public markets to be repaid by toll
revenues. When the bonds were paid off, tolls were mandated to drop (they did). This system worked without the "for profit" incentives
of the private sector that raises costs to users. Rocky Republicanism works.
"Socialization of investment" is necessary to keep investment flowing when the private sector is in full retreat due to the
paranoia du jour. Some public needs, such as health care and housing, are too important to be left to the individual calculations
of firms with short term views and short term bottom lines.
The key to success in any form of enterprise is motivating the leaders. Corporate CEOs respond to bonuses and options; lower
level managers respond to promotions. What are the corresponding lures in public-sector enterprises? Altruism doesn't quite cut
it. Maybe China has an answer?
@Subhash Garg You may establish government-owned companies that are legally normal companies but mainly or fully national owned.
In this way, you can ensure that CEO get bonuses if they do well etc., but the difference being that the top CEO salaries will
not be 50 MUSD, but a fraction of that. Personally, I think it is possible to find someone doing a good job as a CEO for a 1 MUSD
salary.
@Subhash Garg Largely the same, good salaries and bonuses for effective employees and managers. Don't see why cutting out absent
shareholders and incestuous "rock star" CEOs wouldn't help.
None of us lives our own lives by one pure ideology or rigid set of values. Why should we insist that one economic system will
serve our needs, now, tomorrow and forever? Of course, it depends on what our goals and values are. If we believe that acquiring
great wealth is the purpose of life and work, we will have a purely capitalist system where a few achieve that goal. If we believe
that living comfortably with a modicum of security in a stable, healthy society where everyone has enough, we will want that "mixed"
system. I prefer the latter.
Krugman describes some of continental Europe. I am not saying it's good or bad, but there is something out there to see how
that kind of mixed economy works.
Private, corporate interests should be put on notice: if you can't get the job done efficiently at a reasonable cost with on-going
respect for privacy rights and without endangering large numbers of the population, someone else is going to step in. That someone
else is all of us. Instead, things now are the other way around: the Republican hidden "master plan" is to privatize as much of
government functions as possible so that massive profits can flow from the billions spend. The other view, the other side, should
be a clear threat to private enterprise and intentionally so: do it well with respect for human decency or you will be replaced.
.... When life expectancies are declining, despite our tremendous resources and wealth, a degree of protectionism is in order.
Local, small-scale interaction, both public and private - need to be promoted and supported, over the long-term. Our 'sustainability'
depends on us protecting our cultural and natural resources.
Dr. Krugman misses the most important parameter for hierarchical social organization, which is the LEVEL of interaction. The
public/private debate here contrasts ONLY federal or national-level public institutions with private sector alternatives, both
at the national-level, e.g. power and telecommunication utilities, and local businesses and contractors. Sure, "central planning"
is widely discredited (and "decentralized" programs rely on market forces). But, historically, most of these organizations were
HIERARCHICAL networks; governments were not hubs of unstructured networks, but the top of pyramids of organizational levels. Governments
that plan and operate at the LOCAL level through local, public institutions and elections, in support of local commerce and businesses,
are not so easily discredited. The Washington swamp DOES need draining (for want of a biology-grounded metaphor). Municipal, county
and (to a lesser extent) state governments need to be EXPANDED. We are the only superpower, BY FAR. We don't need to have extensive
military commitments and alliances throughout the world anymore. These are NOT required for national security. This is an excuse;
they protect our domination of the global marketplace. We don't need more national and multinational corporations. BOTH agribusiness,
corporate franchises, etc. AND federal programs are terrible for life in middle America. When life expectancies...
The criteria for public regulation/ownership should be whether the goods or services that a business provides are deemed either
unethical to withhold from all citizens, or where the deprivation of those goods or services to some citizens adversely affects
all citizens. Clearly health care and education fall into that category. Nobody would make the argument that it is ethical to
deprive a child of education or health care because the parents were too poor to afford them. But uneducated or sick citizens
is not just an ethical failure. There is significant economic damage to everyone if large segments of the population are sick
and uneducated. Besides education and health care, other businesses with a compelling public interest come to mind. Mr. Krugman
mentioned utilities (no one wants people denied access to clean water or electric power). But a free and open internet is, or
should be, an area where the public has a compelling interest. Progressives should make the case why there is a compelling public
interest to take ownership of, or regulate, these industries. Then the political climate would be more favorable to, for example,
Medicare for all.
So can Prof. Krugman explain why public is more efficient only it isn't? If a private concern can sell something for $10 with
a $1 profit, then a public concern could sell it for $9. Seems elementary to me. Public companies can use the same techniques
as private ones to determine demand. The profit motive is societal. It's not elemental.
There is no sense in having a committee of communists decide how much milk should be on the grocery store shelf. Capitalism
is golden at responding to supply and demand. Yet, basics like roads, public safety, protection of our country (military), parks,
education, healthcare, and basic protections for the young, sick, disabled and elderly should be the collective responsibility
of all our citizens mainly through our local, state and federal governments. Quality of life should be the goal of humanity. It
is also high time for Peace on Earth Good Will Toward Man.
Dr. K. Your best column since your call over a decade ago about a possible looming meltdown with your prescient observation
re " they are selling each other condos down there in Florida". I would only disagree that it should be a greater figure for government
running business, not only does this create better paying jobs for a greater number of people hopefully with benefits, but so
much of the economy today allows private interests to capitalize on public investment not only resulting from public funded infrastructure
but R and D by government entities that private interests were allowed, or lobbied into, reaping the enormous profits from. Forty
years of runaway capitalism has produced little other than extreme inequality, the time is long overdue to correct these inequities,
another thing that needs to be addressed is vulture capitalism that has seen so many mergers and acquisitions turn into little
more than grand theft done by lawyers and bankers as they buy or gain control of one company after the other, fire millions in
the name of efficiency, load it up with debt to pay themselves huge sums and dump the carcass on shareholders, fully fifty percent
of these deals are bad for the companies not to mention the lives ruined, there is in my opinion a very good case these " venture
capitalists" should be in prison. China with its central planning has done a good job in this area as well, people get to greedy
they are executed, good riddance.
@Ted OK Ted, make the case: What law did they break? "there is in my opinion a very good case these " venture capitalists"
should be in prison." I'll leave this absurd statement for another day: "Forty years of runaway capitalism has produced little
other than extreme inequality"
A paradigm that says "Anything you could call socialist has been an utter failure". Interesting thinking. Medicare. Social
Security. Failures? Hmmnn. Wall Street has been an utter failure, destroying the economy in the Great Depression and nearly doing
so Great Recession--which was saved by public programs, policies, and very public bailouts. And Wall Street doesn't do a whole
lot of good (when the bad is included) on an ongoing basis. (I can hear the right-wingers howling on that one--innovation, start-ups,
and yada, yada). Privatization of prisons and schools has been a disaster. Privately--owned utilities are generally a ripoff.
The US health insurance system is a disaster. Several western European and Scandinavian countries have done quite well with public
ownership of the healthcare system, and ownership (and real) regulation of others. It won't happen here, though, as Greed runs
the show.
"...Private insurers don't..provide a service that couldn't be provided..by national health insurance. Private hospitals aren't
obviously either better or more efficient than [their] public [counterparts] "So you could imagine..health..currently in the private
sector [becoming] public, with most people at least as well off as they are now..." [op cit] -- Yes, by all means! -- For example?
Check out what's already in place: the VA healthcare [totally government run] System, where I'm enrolled, as a veteran... -- And
do you know what I think? 1. It words, "just fine." 2. It's cost efficient, as far as I can tell. 3. And I'm not complaining at
all. 4. In fact? I'm grateful! *** "...Also, I see zero chance of any of this happening in my working lifetime..." [op cit] --
Too bad! -- Because when you consider that most of our "advanced" Neighbors have long since instituted "Socialized Medicine,"
it begs the question: 1. "What do they know, that we don't?" 2. And, "Why haven't we done likewise?" *** It's become apparent,
that Americans have a penchant, for re-living the glory days of our past -- That is, debunking "progress," in favor of ways that
have always been familiar, and still seem to work -- Want to be relegated to history's, "Junk-heap?" It's oh, so easy! Just keep
on resisting -- 1. Better ideas. 2. Obvious examples, that work(!) 3. Sound advice, from those in the know. *** "Good luck," I
say, heading into the future-- And may God help the hard-headed among us !
Three "human rights": education, health care and housing. They should be guaranteed by the government, that is us, and taken
away from the unavoidable profiteering that is implicit with private sector enterprise. It would make for better economies and
a more just society.
@Davide How can housing be guaranteed? Say all 320 million people would want to live in the Bay Area. There is not enough space
to guarantee housing here. If not, then you have winners and losers no matter what type of housing distribution you adopt like
by birth, lottery or anything else.
Very helpful. Wouldn't it be a good idea for insurance of all types - auto, home, life - to be a government run, not for profit,
sector? What added value does a private insurance company give to anyone but the owners?
The whole socialism/capitalism thing is so muddied it would be hard to get a clear eyed view to compare. So called private
entities get subsidies of varying kinds and many state owned enterprises are run more like for profit ventures. Companies have
become so used to subsidy that they often get it without even asking for it. An example of the mess is my employer- a private,
faith based hospital system. The building that houses the facility is city owned and leased to the private company in a sweetheart
deal and it also receives a subsidy in the form of a city sales tax that is used for capital expenses. In addition, the operator
gets a tax exemption as a "faith based not for profit". It also gets discounts on some supplies and other subsidies as part of
various government programs. The recent Apple expansion in Austin, Texas was announced and it comes with subsidies. The Amazon
expansion involves massive subsidy to get jobs in Virginia and New York that according to this paper were the obvious places to
put them. Billionaire team owners routinely ask the city, county or state to fund new stadiums. While we are at it, there are
even more forms of subsidy. Comcast & AT&T have copper or fiber running in my back yard without my permission or compensation.
CenterPoint Energy has a natural gas line running underground in my yard and I get no compensation for it. Entergy has an underground
power line and - you guessed it- they do not pay me a cent for it.
America actually has a gigantic state sector: the military-industrial complex. We also have a huge, and bloated bureaucracy
- not so much at the federal level - but at the state and municipal level, where nothing of real importance is done but where
we still expect to pay middle-class salaries to these low-level civil servants on the backs of working-class taxpayers. Most of
what the federal government does should remain as government work. But the state and municipal governments should be substantially
reduced: very few jobs at that level are necessary or valuable to society, and there are far-too many mid-level managers in state
and municipal government that are sucking the taxpayer dry. They take all the money that the taxpayer would like to give to the
struggling, the young, and the disabled, and they use it to pay themselves handsome salaries. That certainly should end.
@Purity of Let me make the argument that water and sewer services operated by municipalities are the most important components
of good health followed rapidly by fire safety services offered by code enforcement officers and fire departments.
@Purity Let me remind you that the majority of municipal/state employees are educators from k-graduate school. Then of course
police, jailers and sanitation. The middle managers that you are complaining about are very small item in these budgets.
You and David Brooks should get together and write a collaborative column. David advocated for a similar mix in a recent column.
Great minds thinking alike?
I have often wondered ... what would "society" be if it followed the military model: everybody has a MOS (job), food, housing,
health care, retirement ...
A large share of the commenters here seem to not remember or be aware of some of the "features" of socialism that capitalism
effectively saved us from. A key rule to remember of government, no matter how benign - you don't get a choice. You don't choose
how much to contribute (taxes), you don't choose your service provider (no competition), and you have limited ability to effect
a change (and only if you are lucky enough to live in a socialist system that is also a democracy.). Take a look at the history
of the 70s US and Britain before the market reforms in both countries...
@random I drive to work on paved roads with functional traffic lights, although they could be better synchronized, and if I
saw an accident, I could call 911and get a trained operator who would dispatch the appropriate well trained and equipped first
responders. I choose to pay for this through my votes on City Council and County Board members. If you do not want to pay for
that, take the license plate off of your vehicle and stay off the roads.
@random Anyone remember the hated HMOs from the 90's? Today, you want an MRI you get it in the morning, whether you need it
or not. Put all medical care under the g'ment, care will be rationed by time rather than dollars- you may get that MRI or joint
replacement in 4 months by the Dr. of a bureaucrat's choice. It's going to be really difficult to unwind the choice of today to
that system.
Most of your points are not really true; but especially so if you consider free migration. One of the side-effects of widespread
xenophobia is to gerrymander the world by blocking that most basic form of voting; voting with your feet.
Firemen are honored, and esteemed, by both sides of the political fence. But fire departments are socialist government in the
sense that they are there, paid by all for the good of all, because if one house burns, the fire may spread. It used to be, however,
that in the USA in the 19th century, firemen were paid by private insurance companies, and there were competing fire companies
who would not put out your fire if you had not signed with them. We are glad now that that period is over. But the situation with
health care today is identical. When will we Americans learn that the health of each of us impacts the whole. You have to put
out a house on fire even if the residents have not paid insurance, because the fire can spread (infection) and damage the whole
town (body).
So, we're looking for some kind of equilibrium with public and private control of the means of production. I think that is
going on. And, it changes with each new generation, the goal posts move. The pendulum swings between the public and private. It
is burdened by history. For me, I am not an economist I'm a LiArt guy, I am a cog in this system, and, it took me a while to accept
that. But, having accepted that, I set my own economic goals and have achieved much of it. Healthcare was a no-brainer, I paid
for and have had health insurance for myself and family all my working life. I am retired now, am comfortable, still working to
leave something of a legacy for my children. This is something to think about. What is the right mix? Everything economic requires
conscious effort. Capitalism and democracy work together and we are constantly looking for that equilibrium. I don't think it
can be reduced to a nice, neat formula. It is dynamic and everything can be fungible. Of course, there may come a time when I
won't care one whit about anything. That is when my long-term disability insurance should kick in, but, who knows, really, and
I probably will not care.
This should be a blinding statement of the obvious with historical data to demonstrate the statement's truth. Decades of Republican
propaganda exploiting the quasi-intellectual concepts of the libertarian laissez faire economics has created a mantra for "conservatives"
that is in serious need of challenge. Good on Paul Krugman for confronting Republican economic theory.
@Taxidermitist, probably because "free" is a chimera. Schools need to be maintained and upgrades. Teachers need to be paid
(a lot more then at present) and textbooks need to be printed. The cost of all these things comes from the taxes that most citizens
regularly vote against. It behooves us as a nation to provide the highest quality education at the lowest possible cost – hence
the public option is the most pragmatic, as well as the most practical. I think most people would support a public service requirement
for graduates to spend x number of years in national service (not necessarily military) in exchange for their "free" education.
"Free" is a loaded word, as well as being misleading.
Thank you Paul. Progressives must make the case that in order for Market Capitalism to be sustainable; Public sharing of Health
Care, Education, Retirement Security, and National Park Lands with Environmental Protections must be part of our Common Goods
we all need to exist. Progressives do not need to demonize Big Multinational Business. Just appeal to their own self interest
by stating that if we share the risks of Health, Ed, and Retirement, Markets will be free of areas that they inherently fail at,
and people will have more resources and time for pursuit of Free Enterprize.
@Michael W. Espy. Business pays for most non research healthcare today. Commercial insurance pays a premium so Medicare can
pay direct costs only and Medicaid pays a fraction of actual costs.
It seems to me that focusing on public or private ownership, exclusively, misses the boat. Enterprise size is the issue. Could
anything be more wasteful than the Pentagon or more socially destructive than Amazon? Small and medium sized enterprises (schools,
towns, water departments, farms, factories, retail, etc) may be less efficient than large ones in some measures, but they may
also avoid the externalities of big ones, so should be better for society on balance -- including geographic equity (i.e., they
can make it outside of the coasts). But bigness can only be controlled through regulation, which has almost no friends and is
more vilified than socialism.
The reason for privatization has always been the obscene profits available to those few at the top, not "efficiency". Even
with a 2/3 private, 1/3 public economy, the income distribution would remain vertiginously skewed on the private side, with some
making billions and other pennies. The money will be used, as ever, to buy power, posing a continuous threat to the system. Let's
get money out of politics first and then see what new economic equilibrium we settle in to.
I have always felt that we should let the government do what it does best and let the private sector do what it does best.
Mr. Krugman makes a valid case for the "mixed economy," but right-wing conservatives, who benefit the most from private ownership
that is subsidized with huge tax benefits, will howl at the thought. It's Socialism! That term has become a pejorative for anything
that smacks of the government taking over what the private sector has been doing, even when done poorly -- think providing adequate
medical care for all Americans. Just look what's happened with so-called Obamacare. A sitting President had the courage to tackle
this problem and he lost both houses of Congress. Did the Republicans who control Congress try to fix the broken system? No, they
made political hay by voting to repeal the Affordable Care Act more than 50 times.
The utilities sector too. It makes no sense to privatize things for which there can be no meaningful competition. What we actually
find is that services and price controls are strictly controlled by public utility commissions. So what was the point of it being
a private enterprise?
Totally agree; the profit motive does not bode well for public benefit. Two points: 1) My husband was on dialysis for ten months,
and had a kidney transplant in January 2009, paid for by the government. 2) Does anyone believe that the private sector will send
a letter across the country, indeed halfway around the world (think Guam) for 55 cents? We must not let the Postal Service be
privatized! It pays for itself, and cannot be duplicated by the private sector.
We're in a mixed economy, already. Although not to the level that Krugman proposes. It's been a series of back and forth, with
the Republicans curtailing taxpayer public social investments -- only if it does not serve their purposes (or there could be potential
sizable donations as a result). It's a matter of keeping this in perspective: That is already the US economy -- we just have to
make sure it is working for the public good instead of tax dollars and national heritages (public lands and resources) supporting
private interests. Do more of this where it makes sense? Absolutely. Not in Krugman's working lifetime? Maybe not -- there's new
blood with the desire to do the monumental task of mobilizing America and the world with a New Green Deal. That's just scratching
the surface. And, they are definitely not afraid of the word socialism. Mixed economy it is and will be -- in spite of Trump and
the Republican party.
As a European I live under a system where [still] many public services are without a doubt public: healthcare, infrastructure,
education. Even utilities & public transport, although privatized, are mainly private monopolies, coming forth out of public services.
For me it's simple: you don't make a profit off the back of the sick, the poor and the children. And infrastructure is a necessary
evil that needs to be public, too. I don't mind private clinics, as long as public service offers the basics needed to keep people
healthy. Extra care, softer pillows, luxury rooms and caviar for breakfast; if you want it, pay for it. Why not? The same for
utilities (which should be public & non-profit, to my opinion) and education. If making a profit on the service hurts the economy
(which is the case with education, health care, utilities and infrastructure), then it should be a non-profit, public service.
And it doesn't hurt to have private companies doing the bidding for the subcontracts/services; as long as it's an open and transparent
process, not a corruption. Simply put: if it is essential to our well-being, for our basic needs, make it public (or subsidize
the rents, f.i.). Leaves us with the question: what is essential? - Water, electricity (gas for heating?), healthcare, education,
infrastructure, public transport. What else? - Housing? For sure. Public housing for the poorest is essential. - Internet/TV/Radio/Telephone?
Not sure. What do I miss?
@Timo van Esch, in this excellent and very complete list, you missed the courts, which in the US are a mechanism for extracting
revenue from those who can least afford it. Our prisons are overflowing with people unable to pay fines, who are being charged
rent for their incarceration. "If you cannot afford an attorney, one will be appointed," if an oft quoted part of people being
informed of their rights. What is not stated is that they will be presented with a bill for services - even from the Public Defender's
office, and charged interest and penalties for failure to pay – even additional imprisonment in a vicious circle.
@michaeltide Very interesting, I had no idea a bill followed. I guess it's safe to say that public legal service rates are
lower than than market rates! (By the way, Michael, to answer your earlier question: Trump supporters voted for Trump to be president,
to solve our current problems, NOT to be our friend, neighbor, role model or have Camelot-charm/sex appeal.)
"Now, this wouldn't satisfy people who hate capitalism." No, Paul, it wouldn't -- as someone who hates capitalism myself, I
can corroborate your claim. But what you have set forth here is a real start, too. People who hate capitalism tend to be people
who hate the predatory, rent-seeking, deregulated and rigged capitalism practiced now, the kind that has slowly turned our country,
as the systemic level, into an anti-democratic oligo-pluto-kakistocracy with the rhetorical trappings of a legitimate republic.
Those who are arguing that greed is what demolishes both socialism and capitalism miss the salient point that capitalism (as we
know it) is exhausting itself in part because it has nearly fulfilled its own logic: the more we automate, the less money we spend
on salaried employees; the fewer salaried employees, the smaller the workforce, the bigger the bottom line, but the bigger the
underclass of unemployed and potentially unemployable poor. Marx spoke often about the "means of production"; the transformation
and partial, if not total, automation of these means seem to me inevitable, and profoundly dangerous for all but a tiny elite.
There are those of us who would back any step in the right direction. The best analogy, perhaps, is in American healthcare policy.
Those of us who lean left of Sanders believe, almost unanimously, that a single-payer system is the only one befitting a civilized
nation. But the ACA was a start, and improvement. If you're game, I'm game.
Mr. Krugman is almost as savvy re politics as he is with economics - I am sincere ... and it's high praise, of course. So,
to bandy about words like socialism and even communism - words which almost everyone agrees are "fighting words" is either horridly
insensitive or a rare lapse in judgment on his part If there WERE op-eds like is "behind what used to be called the Iron Curtain,"
they might score almost as many debating points about the failure of capitalism as Mr. Krugman strews as he basically finds nice
things to say about what he calls socialism. I disagree very strongly with him that education is an area where the "public model"
can take a bow. The Lincolnesque photo of him indicates that he probably was schooled (publicly ?) long enough ago so that oh-how-far-it's-fallen
may not be apparent to him. As a guess, he has grand children who either live in a 1% type community or attend private school.
(Not snide - just trying to fathom how he could be SO out-of-touch.) In fact, that's what's so awful about the "public model"
- people not accountable to anyone really, holding jobs for life. It surely had a lot to do with the collapse of countries like
East Germany ... and bodes ill if, say, utilities are de-privatized. OTOH, I think he is uncharacteristically tepid when it comes
to our health care vs. most other (mostly) comfortable societies. Our bang-for-the-bucks is appalling. Obamacare's lack of a "public
option" cemented a miserable status quo for anyone not rich.
we have a mixed economy now: it's good for the rich and bad for everyone else. and with President Trump's goverment shutdown,
we're on the way to realizing a long-held Republican goal: a return to slavery, starting with government employees working for
nothing right before Christmas.
Many who love the market system are either autocrats and boards of autocrats running their companies or the politicians bought
and paid for by such. The market system definitely has its place but I am not sure that it has the ability and the patience to
develop what truly reorients mankind's progression. The Greeks instauration to democracy, the Renaissance, the Moon program, the
Genome project, were not created by the market, nor was the big data revolution and A.I. which were driven by the emergence of
neural networks, birthed in universities. Neither will the market bring about the proper approach to climate change and population
control. Now, once a direction with potential is determined then the market knows how to implement it. Socialism and Market economy
are words mostly used by people in tribal camps who, for the most part, are useless in the long run. I do not think that rats
like the Koch brothers, Sheldon Adelson, or Carl Icahn and others (such as Trump) contribute anything to society. They are worse
than Clorox!
A mind is a terrible thing to waste, especially if the mind in question is an economist. But we are here to bury capitalism
not to praise it dear Brutus [sic]. We already have a mixed economy. Communism for bankers and the ultra-rich and capitalism for
the once great middle-class, and fascism for the poor. Do try to think a bit beyond our current predicament even if those stock
buy-back strategies didn't workout so well.
1)I really dislike how the meaning of the term "socialism" has been undermined by its repeated use as a pejorative. Any public-sector
activity the right doesn't like is labelled "socialist." Now we're stuck trying to explain what it actually is to a bunch of people
who still support the gold standard. Gah. 2)The idea of the government taking back its patents on generic drugs makes perfect
sense. I'd rather have the federal government manufacturing insulin than watch more price fixing by a cartel of private companies,
which is what we have now.
With rising profits, and declining services, there's a lot of room for Government to be competitive with the public sector.
If you scratch the surface of a large company, you will find the same inefficiency as in government, only higher salaries and
profit (some of which is guaranteed through 'government work'. Lots of good 'in-house' work has been provided by the state and
federal government in engineering, research, ship repair and consumer protection. I worked for Alaska Railroad when it was owned
by Department of Transportation, and it was pretty good. Probably a money-loser, but people liked that you could pull the string
and get off where you liked, or stop the train and get on in the bush. You had to sign a paper saying you'd take to the hills
and fight if the Russians attacked. There's nothing like that at Facebook.
The entire 20th century was a search for the balance between public and private economy in democratic societies throughout
the world. Japan, South Korea, Uruguay, Chile, Germany, Canada, Sweden -- any number of nations demonstrate different ways to
balance it all. Their experimentation is there recorded and available for anyone to study. Do you think anyone in the US government
does? While this column is welcome, America seems doomed to debate the knowledge of the middle of the last century over again,
as if it had never happened -- in economics as in all things -- why? Because History and other knowledge has been replaced by
Ideology through Paid Commercial Media, both legacy and digital. This helped accomplish the great dumbing down initiated by the
Reagan administration to cut pell grants and essentially as much education funding as possible. Replacing scholarships into a
monetized banking scam. Aided and abetted by Democrats who controlled the house and had no interest in educating the voters that
Republican Ideology wasn't based on truth. A whole generation of college professors didn't happened, or rather the more intelligent
candidates were systematically replaced by the more wealthy candidates. This process has brought reduced elite education to nothing
more than a fetishized luxury good -- credentials replacing achievement as a career goal. The triumph of nepotism then follows
logically. The telegenic filled in for leadership for both parties.
What we have to overcome, is this childish idea, capitalism would be a sort of natural law that will provide for us all! Eventually!
i.e. something like god's little brother. The problem is not so much that free markets don't work, but that some markets are not,
and will never be free e.g. health (people will pay anything for a treatment if it means life or death, and nothing if they don't
need that treatment; lower prices will not increase demand); food (people have to eat; their demand can not drop to zero); ditto
housing; and especially labour (people have to work to provide for themselves; the so called Manchester capitalism throve exactely
on that) N.B.: A free market is a market in which supply and demand float freely, coupled by the price, not a market without any
regulations! That would be a lawless market i.e. a gold digger town economy. Such markets tend not to remain free for long. Furthermore,
please remember: A free market produces an equilibrium, and that's it! The point of equilibrium might still be unacceptable for
moral reasons e.g such an equilibrium could very well be high unemployment, or a food shortage. And about privatisation: Even
microeconomic science tells us that things will become more efficient if there is competition, not just because the players are
private. A private monopolist is as bad, or even worse than a public one.
Jeff Bezos collects almost 9 million dollars an hour at his job while I make 15 dollars an hour at mine. I spend every dollar
I make to survive, which makes my economic worth zero. Bezos collects his dollars into the billions and has a gigantic economic
worth. Because I live my life without enough money it's easy for me to forget that we are not economic things and that our value
and worth cannot be summed by economic terms. I don't have any value or worth, I am not a commodity, I am not a variable or a
statistic. I am not a cog in a wheel or a rat in a race. None of us are, but our culture conditions us to accept ourselves as
consumers and nothing else. When we worry about our worth and value as people we are using incompatible terms. Bezos is not worth
more than me or anyone else. He is not more valuable than anyone else. The only difference between Bezos and myself is that his
ability to consume is off the charts and mine is minimal. If we really are economic entities then I am an earthbound worm eating
dirt while Bezos exists as a tremendous black hole consuming matter, light, and everything else. I don't want to be a black hole.
I want to create, like the burning stars, shedding heat and light as I consume what I am. It's a choice to be a black hole or
a star. Create more, consume less.
The United States of America of today has effectively two systems: capitalism - the main one -, and socialism, in the Pentagon
(which is between one tenth and one quarter of the American economy, depending on how you want to count it). The Pentagon is effectively
socialist because, given the sui generis nature of the defense sector and the advanced level of the American capitalism, it runs,
internally, a perfectly planned economy. How is it done? It receives unconditional and unlimited amounts of money-capital directly
from the USG. Yes, the "outside world" is still capitalist, and many Pentagon contracts end up fueling the capitalist part of
the country - and that's why the capitalist part of the USA is still the hegemonic one - but, in its inner logic, it is socialist.
Why the USA accepts a big chunk of its economy to be socialist? Because the use value of national security requires absolute efficiency
in terms of logistic readiness and lethal efficacy: you can't not bomb country X simply because the quantity of missiles Y would
not be on a scale sufficient large enough to meet the necessary profit rates of supplier Z. No, if you need 1 missile Y at exact
time W to achieve a military victory against country X, you bet your life the Pentagon will have it -- regardless if it is "cost
effective" from the capitalist point of view. The only other time the USA was as socialist was during FDR: this reveals the American
pragmatism towards the overall survival of capitalism.
What the late Louis Kelso, inventor of the Employee Stock Ownership Plan used by 11,000 companies, called The Second Income
Plan, deserves consideration. See SECOND INCOMES at aesopinstitute.org for a description. This is a Third Way that captures the
advantages of capitalism while overcoming many of the disadvantages.
I believe that a combination of Capitalism & Socialism can work & is already working ,like the VA, which I use & i'm completely
satisfied. Social security doesn't pay all my bills, but without it I would depend on the one day old Doughnut Company to eat.
Having said all of the above, what made America Great is incentive, motivation & creativity that is the result of Capitalism.
Socialism must be used in Education, rather then the insurance loan that put Graduates in debt for years. It should not be an
open door to higher education, but given to only those that are qualified. Universal Health care has to be Socialized, & given
only to the needy. Neither Socialism or Capitalism is the answer when used without the other, together it's not perfect but better
than alone.
"... If anything, Trump and the GOP have finally shown common decent folk what the democratic experiment in America has become: a system that looks alot like feudal systems of the past. Including walls! ..."
"... There is no such thing as a free market. Let me repeat it again for effect: there is NO such thing as a free market. Whether one calls it libertarianism or neoliberalism, the idea is pretty much the same: if we just unleash the power of human greed, the market will equal everything out, and we'll all be freer because of it. Sorry, but it doesn't work that way. Our government gives huge incentives to large corporations with the idea that wealth will trickle down into middle class jobs and prosperity. But guess what? Those corporations keep most of the incentives and profits for themselves and their shareholders. The comparatively minuscule recent tax cuts for the middle class pale in comparison to the huge corporate cuts that added $2 trillion to our national deficit. The only thing stopping corporate excess and monopolies is government. Many libertarians cry "starve the beast." Well, they shouldn't complain if they get food poisoning because their food wasn't properly inspected by a government they loath. And neither should President Trump complain, if, like most Americans, his next Big Mac doesn't agree with him. ..."
"... Anarchy is oligarchy. The rule of law -- law crafted by dedicated public servants, who are elected by sober and informed citizens -- is the closest we can come to freedom. ..."
"... The libertarian philosophy is this: while you're young and healthy and productive, you can help make money for your boss. However, once you are old and no longer capable of making a contribution to someone else, it is your obligation to simply die. ..."
"... Privatizing Social Security so that investment firms can get a piece of the action, privatizing Medicare so that insurance companies can get a piece of the action, and privatizing the military, so that private paramilitary companies can get more than their fair share of the action. It's theft in plain sight. We can't believe it, because it's so obvious. ..."
"... Paraphrasing Marie Antoinette "Let them eat contaminated cake" ..."
"... Funny how libertarians never argue for privatizing the military, or law enforcement. ..."
"... I cannot enumerate the number of rich Republicans who tried to get the government to support their elderly while the children of those elderly got the money. I could tell you stories, including one about a certain Republican Governor of Pennsylvania who tried to put his adult, but mentally handicapped child on Medicaid. ..."
"... Cutting tax rates on the wealthy are stealing from the rest of us. We make contributions every hour of every day which are hoovered up by the wealthy and the powerful. Meanwhile we cannot afford the cost of living, which has skyrocketed vs wages and benefits. The cost of an apartment is exorbitant. The cost of health care is exorbitant. Meanwhile the commons suffer. Infrastructure suffers. Sidewalks are a menace. There is lead in the water. Rich people who do not pay their fair share of taxes are stealing from the people in so many ways it's impossible to count them. But count them in years lost, in lives cut short, in lives blighted. ..."
"... Republicans aren't against government, it has grown more under every Republican president including Reagan himself. They simply have their preferences as to who benefits from it. ..."
"... As the saying goes, you never miss your water until your well runs dry. ..."
That said, the truth is that libertarian ideology isn't a real force within the G.O.P.; it's
more of a cover story for the party's actual agenda.
In the case of the party establishment, that agenda is about redistributing income up the
scale, and in particular helping important donor interests. Republican politicians may invoke
the rhetoric of free markets to justify cutting taxes for the rich and benefits for the poor,
or removing environmental regulations that hurt polluters' profits, but they don't really care
about free markets per se. After all, the party had little problem lining up behind Trump's
embrace of tariffs.
Meanwhile, the philosophy of the party's base is, in essence, big government for me but not
for thee. Stick it to the bums on welfare, but don't touch those farm subsidies. Tellingly, the
centerpiece of the long G.O.P. jihad against Obamacare was the
false claim that it would hurt Medicare.
And as it happens, many of the spending cuts being forced by the shutdown fall heavily and
obviously on base voters. Small business owners are much
more conservative than the nation as a whole, but they really miss those government loans.
Rural
voters went Republican during a Democratic midterm blowout, but they want those checks.
McConnell may have trash-talked food stamps in the past, but a sudden cutoff would have a
catastrophic effect on the
most Republican parts of his home state.
I had an idiot,er, libertarian friend once who actually believed the market would take
care of food safety, because people wouldn't buy food from a source if that source was known
to have sold tainted food. "What about the people who die in the meantime?" I asked. "Well,
it's up to people to decide what to eat. The government shouldn't tell people what to eat."
"But how are you supposed to know? How much tainted food has to be sold and eaten before
people even know to avoid it? People get sick or die.
What about people's lives?" "Argh,
'people's lives.'" (Eye roll.) "Liberals are always talking about 'people's lives.'" I swear
this is an actual conversation that I repeated so many times I have it
memorized.
One of the big obstacles I've observed is that conservatives, in general, have to
experience negative consequences directly to understand the link between cause and effect.
Liberals, in general, are better at imagining negative consequences and taking preventive
action before they directly experience it. It has to do with empathy and solidarity, I think.
Liberals see someone suffering, and they think, "We should find out what caused that and fix
it so it doesn't happen to the rest of us." Conservatives see someone suffering, and they
think, "That guy must be a terrible person. He totally deserves what happened to him. It can
never happen to me because I'm a good guy." It is only when the negative thing does directly
happen to the conservative that he may reconsider. That's when it is important to find a
scapegoat- illegal immigrants, minorities, Jews- to blame in order to obscure the causal
link.
Libertarianism attracts the finest stunted teenaged and hypocritical minds that are either
disconnected from reality or that suffer from cognitive dissonance that allows hypocrisy and
selfishness to flourish like mutant bacteria. Taxes and good government are the price of any
decent civilization...and both of these concepts are completely demonized by Republicans even
though Republicans are some of the greatest welfare queens in the nation. Productive, modern,
blue Democratic state federal tax dollars have long subsidized rural, religious Republican
states that hate the federal government....they curse they horse that feeds them and then
they curse even more when the federal teat is turned off. America's 0.1% Robber Barons and
crony vulture capitalists curse 'high tax rates' that aren't particularly high compared to
the rest of the world while using America's infrastructure, legal system, government-funded
research and technology, and corrupted electoral system to make parasitic profits that dwarf
those of foreign corporations who pay their fair share of taxes to countries with
increasingly better infrastructure and educational systems. The libertarian theology followed
to fruition is Somalia-like; an unregulated anarchy of human misery. Decent human beings
understand that healthy taxes produce healthy civilization. Today's version of libertarian
Republicanism is a demented form of arrested emotional development that's been destroying the
USA since 1980. Nice GOPeople.
Senator Mitch McConnel said that the food stamp program is "making it excessively easy to
be non productive." Well, Mitch McConnel is not on the food stamp program and he manages to
be one of the most "non productive" senator in the history of the US Senate. Congratulation
Senator!
Almost unfailingly, the stoutest Republican supporters seem to be the biggest
beneficiaries of government: the military, farmers, pensioners or small business owners.
Growing up in a military family, I remember subsidized gas, medical treatment for free and
school trips paid by the DoD. Yet anytime there was a Democratic president, it sounded like
there would be a coup when our military parents met at picnicks and had a few beers. If
anything, Trump and the GOP have finally shown common decent folk what the democratic
experiment in America has become: a system that looks alot like feudal systems of the past.
Including walls!
There is no such thing as a free market. Let me repeat it again for effect: there is NO
such thing as a free market. Whether one calls it libertarianism or neoliberalism, the idea
is pretty much the same: if we just unleash the power of human greed, the market will equal
everything out, and we'll all be freer because of it. Sorry, but it doesn't work that way.
Our government gives huge incentives to large corporations with the idea that wealth will
trickle down into middle class jobs and prosperity. But guess what? Those corporations keep
most of the incentives and profits for themselves and their shareholders. The comparatively
minuscule recent tax cuts for the middle class pale in comparison to the huge corporate cuts
that added $2 trillion to our national deficit. The only thing stopping corporate excess and
monopolies is government. Many libertarians cry "starve the beast." Well, they shouldn't
complain if they get food poisoning because their food wasn't properly inspected by a
government they loath. And neither should President Trump complain, if, like most Americans,
his next Big Mac doesn't agree with him.
For those who despise government regulations, I offer 3 observations: 1. I lived near
Muskegon, MI, prior to the EPA, when 3 foundries were constantly belching smoke and foundry
dust into the air. Breathing the air was equivalent to smoking 2 packs of cigarettes a day.
2. I lived in Cairo, Egypt for 3 years. I purchased 4 pairs of prescription eyeglasses before
finally giving up. None of them were right - and no regulations meant that I had no recourse.
3. I lived in Accra, Ghana for 3 years. No construction codes meant that the brand new luxury
apartment building I moved into suffered numerous problems with plumbing, resulting in mold,
flooded floors and sudden loss of water pressure.
In Cairo and in Accra, there was no social
safety net. Beggars were a constant. Often they would be horribly disfigured and with no
family what were they to do? I am happily retired now, back in Western Michigan, thoroughly
enjoying the clean air, safe food, and clean parks. Obama said it best - it's not the size of
government, it's the effectiveness of it. And if it's not working, that's on us - we're the
ones who put those people in office. 2020 can't arrive soon enough.
The Trump voter in my family was a libertarian before switching to the Party of Trump and
still believes that government is an interference. One conversation we had was about
electricians needing to be licensed. He said electricians did not need to be licensed because
if their work led to customers being injured or killed due to a fire, that information would
circulate and those electricians would be forced out of the market. I asked him if he cared
about the people injured or killed, he shrugged his shoulders and said that's just the way
things are. I then asked him what if he was one the customers injured or killed. He looked
rather shocked at that question and immediately dropped the subject. That is all that I ever
needed to know about libertarianism.
"Libertarianism" according to the GOP means that YOU need the discipline of the "free
market," but I deserve all the protections and support of the nanny state (financed with your
tax dollars, thank you very much.)
As George Lakoff reminded us, what the anti-government folks call "regulations" are, for
the most part, "protections." We shouldn't let the Kochs, Trumps, McConnells, and Ryans frame
the discussion. "The term "regulation" is framed from the viewpoint of corporations and other
businesses. From their viewpoint, "regulations" are limitations on their freedom to do
whatever they want no matter who it harms. But from the public's viewpoint, a regulation is a
protection against harm done by unscrupulous corporations seeking to maximize profit at the
cost of harm to the public." https://georgelakoff.com/2017/01/28/the-publics-viewpoint-regulations-are-protections
Michael McLemore Athens, Georgia Jan. 11 Times Pick
At some point the American people need to realize that conservative/libertarian pundits
are just on-air hucksters selling a product. Instead of selling Vegematics, Ginsu knives or
non-stick cookware, they are peddling right-wing bile for a profit. And the profits derived
from their corporate advertisers are huge. Forget truth or journalism, Rush Linbaugh openly
proclaims himself to be an "entertainer" and not a "journalist" (mainly to make it more
difficult to sue him for falsehood). Ann Coulter similarly declares herself a "polemicist".
Forget for a moment the subversive influence of Russian money and hacking on American
politics. Our own homegrown corporate advertisers are eagerly subverting America by
underwriting glib purveyors of corrosive right-wing propaganda, who will slyly proclaim the
gospel of unbridled greed and not of social responsibility. Of course drug companies don't
want the FDA. Why would they want oversight to keep the public safe, when safety costs them
money? Why would banks want regulation to safeguard the financial system and consumers, when
regulation interferes with short-term profits? The Koch brothers don't want pesky
interference from the EPA in regulating their mega-refinery in Minnesota. Their family homes
are in Aspen, Palm Beach and Manhattan, so why should it concern them if effluent rolls
through St. Louis, Memphis, and New Orleans? Don't dare call this something so plain as
"greed". Wrap it in a bow and call it "libertarianism".
FunkyIrishman member of the resistance Jan. 11 Times Pick
Republican mantra (even Libertarian) is to be left alone, so long as THEIR way of life is
left alone, and they are subsidized by you for living that way. That may mean a MASSIVE
military to be a deterrent, or to go invade some other country to keep the oil flowing. That
may mean subsidizing all sorts of industries, businesses and the like, because they cannot
compete at all on a truly free open market. That might mean support for all sorts of social
programs, health programs, education programs and the like as well, because bootstraps only
take you so far. I would use the word hypocrisy, but that would entail that many know what
they speak of when describing what Libertarian, or Socialist. or another ''ist'' form of
government actually means. We are all in this together or we are not. There is no in between,
but many would have you believe it is possible. It is not.
@Bill Once you our you loved one eats salmonella contaminated lettuce and nearly dies,
good luck going after, or even finding, the agra-business across the country who caused
it.
European food is heavily regulated, uh, by governments. Much tastier and doesn't contain
known carcinogens. Watching the train wreck of the United States.
Will Schmidt perlboy on a ranch 6 miles from Ola, AR Jan. 10
@C Wolfe This rings so true for me too. I majored in economics at UICC in the early
seventies. My favorite prof was a PhD candidate at U of Chicago, and one of his advisors was
Milton Friedman. Being at UICC, I did not study under the great man, but I did under one of
his acolytes, who was close to tenure (ABD, if I remember correctly), and I thought, a very
intelligent one. One of his two areas of doctoral specialty (you had to have two; his other
was labor) was macro, and I took him for among other things, money & banking. In fact, I
took M&B twice, because the first time (I got an A) was from a Keynesian, and I wanted to
get it from a Quantity Theory guy; another A.) Because my prof was a diciple of M.F., I got
to attend several special lectures at UC, and partake of the kool-aid. Well, I heard directly
from the horse's mouth how consumers would boycotte inferior suppliers and only the best
would survive. The free market would favor the best and punish the worst. Of course, this
required perfect information. Unfortunately, no good case was made how a perfect information
economy could be achieved nor how consumers could afford to acquire perfect information. The
price of discovering bad suppliers of tainted food would surely include the deaths of some
number of consumers before that information became generally available. We debated perfect
markets and perfect information but never did get a convincing case for abandoning government
inspection of food products.
The famous Republican philosopher Grover Norquist once said that he's want to have
government so small that one could drown it in the bathtub. Right now, nearly one million
government workers are facing the prospect of drowning in debt. Trump suggests that they
could make do like he always used to, namely declare bankruptcy or go to daddy for a loan.
All this while court jester Pence 'handles' the negotiations. His idea is to make more
requests while staying firm on a wall.
Perhaps the GOP base will finally learn just how dependent they really are on the
government they profess to hate. Trump loving farmers and small town business owners are in
for a particularly nasty surprise. It's not just farm subsidies. As described by Michael
Lewis in "The Fifth Risk": "As the U.S.D.A.'s loans were usually made through local banks,
the people on the receiving end of them were often unaware of where the money was coming
from. There were many stories very like the one Tom Vilsack told, about a loan they had made,
in Minnesota, to a government-shade-throwing, Fox News-watching, small-town businessman. The
bank held a ceremony and the guy wound up being interviewed by the local paper. "He's telling
the reporter how proud he is to have done it on his own," said Vilsack. "The U.S.D.A. person
goes to introduce herself, and he says, 'So who are you?' She says, 'I'm the U.S.D.A.
person.' He asks, 'What are you doing here?' She says, 'Well, sir, we supplied the money you
are announcing.' He was white as a sheet." There are rural counties in this country that are
only viable with government money. Trump counties. It's going to be an expensive and painful
education. Trump University lives.
If ever there was a group that lives in a fantasy world, it's the libertarians. In another
article in another newspaper that dealt with "intrusive" government, I submitted a comment
saying that I wouldn't be surprised if Libertarians would be opposed to STOP signs and
traffic lights because these would constitute an unnecessary infringement on their freedom.
Wouldn't you know that a person of that persuasion actually replied to my comment and
confirmed my suspicion. Working in an IT position for three decades I dealt with this type
daily. Many were 30-something white males, often both cognitively and physically well above
average, who had learned to program computers. They were blessed with being raised in
two-parent families. I acknowledge the hard work they did to learn to wrestle with computers,
but they lacked the perspective to realize that they had not hit a home run but rather had
been born on second or third base due to the intellectual and physical gifts they possess
that many others don't.They could not understand why others in society could not emulate
their success. In one conversation about affirmative action, one such person asked "Why do we
need that anymore? There are laws against discrimination.". Many of this type get bit in the
behind when some government regulation is repealed then it turns out that THEY are the ones
adversely affected by the repeal. But don't waste your breath trying to pierce the fantasy
balloon. They hold tight to those fantasies.
I'm waiting for Grover Norquist and the other small government proponents to relocate to
Somalia, home of no real government. Why it's not thriving without the yoke of onerous
regulations is surprising.
"...making it excessively easy to be non-productive." -- Senate Majority Leader Mitch
McConnell. The irony is too rich here. While he and his president and the "non-productive"
Republican Senators draw a paycheck for soaking up the public dime, kids will go hungry;
start-up hopefuls will lose loans; farmers will feel the bite; food will become contaminated
and people will fill hospital ER's and strain their health insurance. For openers. The Right
is getting its own back on FDR's New Deal. All because "government is the problem." Talk
about a self-fulfilling prophecy.
A relatively minor point: "Maybe you believe that private companies could take over the
F.D.A.'s role in keeping food safe, but such companies don't exist now and can't be conjured
up in a matter of weeks." Such inspection companies could only exist if they were funded by
the food companies they were inspecting. Competition among inspection companies would then
obviously lead to grade inflation: hire some other company that is more likely to give you a
passing grade, who in turn will be happy to lower standards to attract more customers. This
is not an avenue for effective replacement of the FDA. Libertarianism is for chumps and
fanatics, no one else.
We lived in a small West African nation for 25 years. There were no collectable taxes
because the tax collectors kept what they could extort from poor people, no safety nets such
as social security or medicaid/medicare, no fire fighters, no functional road departments, no
regulation of pharmaceuticals, an unprepared and unarmed military, no paid federal, regional
of local police forces, no judges who were not bought by the highest bidder, no standards for
the public hospitals, no communication systems, no running water in major cities, no electric
power that functioned more than 4-6 hours a day, and not a single government official who was
not on the take.
What we did have were cholera epidemics that killed 5000 people, annual measle epidemics that killed children under 5 years old , villages burned to the ground by
wildfire, a school system which did not pay its teachers and finally a 12 year civil war
which killed over 200,000 people and a [post war ebola epidemic which killed 12,000 more.
The
proper use of taxes was not even a dream. Now in the USA, the "leadership" under its current
president and his sycophants are playing personal and infantile grade school games with your
and my tax dollars and the congress is helping them do it. Amazing! I feel like I am back
home in my 3rd world village .
Anarchy is oligarchy. The rule of law -- law crafted by dedicated public servants, who are
elected by sober and informed citizens -- is the closest we can come to freedom. Governance
that provides basic order and rules and a safety net for when people fail (either from
behavior that is unwise or from ill fortune) is part of the rule of law. There are also
necessary things that the government can provide (without a profit motive) better than either
charity of for profit organizations. Roads and basic science are good examples. Other things
are best left alone by government -- things like sex, drugs, and rock'n'roll. These should be
principles that we all can live by, but it seems like the so-called conservatives believe
quite the opposite. They believe in unregulated guns, flows of money to unregulated trusts,
defunded public goods, and violent repression of sex, drugs, and free
expression.
@earlyman correct. The first thing those large corporations responsible will do is use
their lobbying power to legislate liability caps on what they have to pay in settlement
costs. That's the way the real world works. We're not living in some libertarian
utopia.
James Wallis Martin Christchurch, New Zealand Jan. 10
Problems with the food industry in the US isn't just a new issue since the Trump
administration, it has been an issue for decades. The problems of Big Ag and Food
Manufacturers lobbying has been so bad, that whenever I see doctors in Germany and New
Zealand, the first question they ask is have I been and eaten food in the US in the last six
months, when they are trying to ascertain health issues". When the medical community around
the world asks about US food intake, you know corporate libertarianism has run afoul and at
the cost of the health of America. The fact that foods that can't be sold in Europe for
health reasons are dumped in the US just highlights how it is no longer the United States of
America, but rather the Corporate States of America. When will the people demand for
Separation of Corporation and State?
I had serious Libertarian leanings up until a few years ago when my family and I moved to
Bangalore, India to work for three years. It was an eye opening experience to see what
actually happens when you don't have a strong central government regulating things like the
air you breathe, the water you drink, and the food you eat.
Bangalore was once known as the
Garden City and is considered the Silicon Valley of India, but corporate greed, unchecked
expansion, and government corruption, along with no meaningful environmental laws that are
actually enforced, has turned it into a nightmare-- or maybe into what Libertarianism looks
like in the real world, outside of Ayn Rand novels.
The river beside our street was so
polluted it had layers of chemical foam that would reach ten feet in height and blow across
the road, stopping traffic.
The nearby lake would literally catch on fire, burning for days.
Open sewers ran into nearby water sources. Forget tap water, it would make Flint, Michigan's
water crisis seem desirable by comparison. Food safety? Roll the dice and take your chances.
Within a year any trace of Libertarian beliefs were wiped clean from my mind and I longed for
strong government regulations to protect me and my family. This U.S. shutdown isn't even a
minor taste of what it truly means to live without powerful and enforceable government
regulations and protections.
@Bill it is important to keep in mind that contaminated food can kill you before you even
have a chance to pursue remedies. The critical elements for us now leaving much longer than
our ancestors involve personal and public hygiene (e.g. safe food, sewer systems), medicine
and healthy environments (e.g. pollution controls). I recommend watching the Trashopolis
series, its quite informative.
@C Wolfe Decades ago I had a very similar conversation with a doctrinaire libertarian,
though it was about a less essential question. I also repeated it many times. The incredulity
factor is large. I mean, I couldn't believe the degree to which rationality
disappeared.
On the bright side, a federal judge just ruled Iowa's so-called Ag-Gag law to be
unconstitutional, making it easier to expose the filthy and inhumane conditions on factory
farms. So agribusiness will be smacked with the double whammy of losing their corporate
welfare checks and bribery payments, and having their own cruelty exposed at the same time.
It's obvious that Trump's tantrum of a shutdown is the latest episode of disaster capitalism,
or what Naomi Klein has dubbed the Shock Doctrine. Create a crisis, like neglecting New
Orleans levees, or most recently, the criminally negligent homicides of Hurricane Maria
victims in Puerto Rico, and you allow the vulture capitalists to swoop in and cash in. The
entire school system of N.O. is now privatized, and libertarian billionaires are buying up
huge chunks of Puerto Rico at bargain basement prices to create palaces. With walls, of
course. The trash and overflowing toilets at our national parks are just the ticket for
corporations to take them over and charge exorbitant admissions... before selling out to
ranchers and drillers to further speed up the Anthropocene. The other semi-bright upshot of
this disaster capitalism is that rich conservatives will get just as sick from eating tainted
food as the poor. Trump probably figures he is immune, because he likes the polluting cow
flesh he consumes to be well-done to burnt. But without getting paid, how long will the White
House chefs continue to serve him? : -)
Exactly so. It has been my experience that my libertarian friends are only able to be
libertarian because they have been protected all their lives (at great expense, they would
argue) by the very government they deride.
What's fascinating about all of this is how the Gutless Obnoxious Popinjays refuse to take
any responsibility at all for the problems. It's always the Democrats fault. I'm surprised
that none of them have pointed a finger at Obama. After all, he didn't try to build a wall so
it must be his fault that Trump is demanding money for a beautiful wall that will protect all
Americans from the outside world. It's fascinating to realize that McConnell, Pence, Trump,
and the rest of the obnoxious crowd are getting paid by the government they want to drown.
They are contributing to the very cycles of misfortune that they blame people for. Are they
going to write letters for every federal employee who loses a home, falls farther behind on
loan payments than they should, who can't afford to pay for medical care or the premium? No.
The GOP has no plans to share the misery it's causing. Trump doesn't understand or care. This
is what happens when a complete incompetent is elected to run a country: chaos, uncertainty,
and worse. The party that abhorred communism and the Russians now has a president who may be
owned by the Russians. Even if he's not, the entire debacle that is Trump's presidency must
warming the hearts of Putin and his "friends" each day it continues. As Obama said, elections
have consequences. This is one of them. I don't know about the GOP and the libertarians but I
prefer to eat, drink, and breathe safely. It's why I like a functioning
government.
The libertarian philosophy is this: while you're young and healthy and productive, you can
help make money for your boss. However, once you are old and no longer capable of making a
contribution to someone else, it is your obligation to simply die.
If you look at all the
proposals of the Republicans, this seems to be the guiding force. Privatizing Social Security
so that investment firms can get a piece of the action, privatizing Medicare so that
insurance companies can get a piece of the action, and privatizing the military, so that
private paramilitary companies can get more than their fair share of the action. It's theft
in plain sight. We can't believe it, because it's so obvious.
It's the chaos this president keeps thrusting on all of us. We can't keep up day to day of
his lack of self control, his lack of understanding how government works, the principles of
the constitution, the rule of law that has sustained us through the years. He seems to
believe that he has the support to destroy everything that keeps us safe. The foundation that
made this a great country is at risk. I'm old now and can not believe what I see every day
from this American President.
@Zhou "I'll sue the company producing it". How will you do that in the absence of any
governmental mechanism to enforce compliance with a law suit? And how will you prove
contamination in the absence of any recognized standard to show it is present?
@Bill So, you prefer the pound of cure known as a lawsuit to a regulatory ounce of
prevention. Personally, I'd prefer to avoid both the discomfort of food poisoning and the
expense of a lawsuit. Besides, do you really think you'd win? None of the many people
poisoned by contaminated vegetables at Taco Bell stores a few years ago had any chance of
even bringing a lawsuit, much less winning one and gettting compensation. It took regulatory
agencies, public health departments, and the national Center for Disease Control simply to
track down the offending vegetables and force Taco Belll to clean up its act. As for your
checks and balances, most of the checks go from lobbyists to congressmen, and that throws any
balances way out of whack. Your annual deficit figure of $1 trillion is out of date. The
latest Trump tax cuts raised it to $1.5 trillion. So, start worrying real fast. But, I'd
start worrying more not merely about the deficit, but about how money is being spent. You
seem to worry more about the comparative peanuts spent on the FDA (which, by the way, also
regulates drugs and medical devices) or the USDA (which also helps regulate food safety).
than on the far larger amounts spent on the military (e.g. latest technology F-35 jets that
can't fly in the rain), US taxpayer funding of arms sales to foreign countries that neither
share our values nor help keep us safe (e.g. Saudi Arabia).
I work with alot of big Ag companies -- they're constantly raging about government regs
and the red tape, etc, etc., but they have HUGE lobby and political power. On an average
year, they get an amazing amount of subsidies coming in all kinds of forms, from direct
compensation packages to float an industry a la corn, or from electric rates that are lower
for them at the expense of the other rate classes. And when any hint of hardship comes,
nevermind true hardship, they're front and center for the hand-outs. And they get plenty. All
this before we even address immigrant labor! Ha! Libertarian Ag would look WAY different out
in the fields. And one thing that would surely be needed: Cheap immigrant (sometimes illigal)
labor. You get what you vote for.
@michjas Except the Republicans could reopen the government if they chose to. They could
pass the same bill they passed in December, and then override the President's veto. Their
conspiracy is that they won't do that.
So the party of fiscal responsibility which is already running up the deficit insists on
building a wall over 2000 miles of border, seizing private property along the way . When we
stopped teaching Geography and Citizenship and dismissed literature as irrelevant to getting
a good job, we created an electorate that could be gulled by such propaganda and conned into
thinking that fear is our avatar: fear of otherness, fear of government, fear of taxes, fear
of liberals, fear of fear itself.
@Aoy when food is contaminated, the FDA is able to locate "ground zero" with utmost
efficiency--Food Science 101. Without the FDA--which was established under T. Roosevelt's
administration--there is no coordination between the food chain and the population. You can
wash your lettuce to your heart's content, but if it was grown in contaminated soil, the
cells within are contaminated. So, yes, the FDA is extremely necessary.
"Government," declared Ronald Reagan in his first Inaugural Address, "is not the solution
to our problem, government is the problem." Yup, Republicans say government is the problem
and then they get in power and prove it. The Party of Problem
Government.
Anyone who thinks enforced food safety is unnecessary should go to India and eat in a
restaurant anywhere but a first-tier hotel for foreigners. Your odds of getting sick are very
high. Ditto in Alexandria, Egypt, and other places I've experienced where profit is important
and product is, well, less so. Remedies? Seriously? How will you prove anything? Especially
when all the restaurants have the same cavalier attitude toward washing food and hands. You
ate the salad? More fool you.
I wish that shutdowns were actually that-- shut things down. That means no air traffic
controllers, no TSA, no border agents. Wonder how quickly the politicians would solve their
differences if they couldn't rely on slave labor from unpaid federal employees forced to
work?
Funny how libertarians never argue for privatizing the military, or law enforcement. When
they think it's really important, even libertarians come running back to government. The
facts are that markets are only free if they are transparent, and in all of history nobody
has come up with a better way than government regulation to make markets transparent. We
tried unregulated markets in food production, and it was a disaster - which is why we have
federal regulation of food production today. We tried unregulated labor markets and it was
also a disaster - which is why we have child labor laws, minimum wage laws, and the full
range of other labor regulations we have today. politicsbyeccehomo.wordpress.com
People forget that government workers are themselves participants in the economy. They buy
cars and houses. They go to the grocery and the hardware store. When they don't get paid, the
businesses they patronize -- private businesses -- also go without. Yesterday, I had lunch at
a famous old restaurant right near the federal plaza in Chicago's Loop. One of the workers
there told me that because of the shutdown the place's business had fallen way off. (And
that's with the federal courthouse still open. Just wait until the courts shut, too.) It's a
closed system, folks.
Spot on. Naïveté about libertarianism runs deep. It was brought home to me
when I worked with programmers in Silicon Valley in the 1980s. A fair number espoused
libertarian ideas. Yet they had all had their computer science degrees paid for by the
Defense Department, many at state universities. I was not too sophisticated myself but even I
could see the disconnect between the ideas they were pushing and the real world
implications.
Have you ever actually tried a personal injury case? For a food borne illness? I ask those
questions rhetorically because I can tell from your comment that you haven't. As a lawyer,
who doesn't often get involved in personal injury cases, I can tell you that people often
think they aren't hurting anyone by cutting corners, and are only restrained from doing
things like serving contaminated food or doing illegal gas line plumbing by the threat of
fines if caught cutting those corners. It's not the lawsuit that makes them take
care.
The gilded age of the 1890's seem like a wonderful time for libertarians. The productivity
of the nation was high and gaining. But, it came with dirty air and water, bad food and
medicine, quackery and robber barons. It was followed by the Roaring 20's where stocks grew
without limits and borrowed money paid for it. That did not end well, either. Finally, in
FDR's first 100 days, government stepped in and wrote the rules that made life good for most
of us. The GOP does not know history and forgot what happened when there was a libertarian
society. They are getting an education, finally.
One of the things that might end is the Indian Health Services. The government made
contracts with tribes that in exchange for their land, the federal government would provide
education and healthcare. It's not a welfare program. It is payment for millions of acres of
land. If Indian Health Services ends, that's the same as reneging on a contract. Trump may
see tribes going to court to get what was promised to them in exchange for land and
lifestyle. If the shutdown continues, lots of people may be taking Trump to
court.
Do you believe in magic? Religious extremists do. So do Libertarians. And so do
Republicans though what they believe is a variant of magic that might be called delusion or
magic mixed with whisky and soda, which we call cynicism. What they all have in common is a
collective inability to see the forest from the trees: central to their emptiness is the
absence of humanity and all the messy ambiguity that entails, instead substituting a bogus
certainty that's nothing more than a palliative for existential panic at the absence of self
identity grounded in community. Bertrand Russell called it cosmic anxiety. It drives the
compulsion for religion, ideology, in fact all systems of coping that avoid the crushing
weight of freedom that comes without compass or owner's manual. Whether the god of the
invisible hand that directs the market, or the god of clubs with exclusive membership and
status, or the god of ancient fables told and retold for a millennium of successive
generations, all are rationales for the irrational aversion of responsibility to do the work
necessary to make freedom meaningful without making it meaningless for others. The two
bargain bins in the basement of modern life are religion and ideology. Libertarianism can be
found on the clearance rack for one size fits all.
Paul, you included this quote from Mitch McConnell, the Senate majority leader... When
talking about Food Stamps he has denounced the program for "making it excessively easy to be
nonproductive." He has no business being so judgmental. Being productive implies a positive
result for society. When it comes to being productive, his entire career is in
question.
@ebmem You don't know anything. For one thing, you are DEAD WRONG. Medicare DOES NOT PAY
FOR NURSING HOME CARE AT ALL! MEDICAID DOES, but only for the poor. It is WEALTHY REPUBLICANS
who "Medicaid Plan" their assets so the government will cover their living expenses so they
can preserve wealth for their heirs. How do I know this to be the truth? I spend 23 years as
a government regulator for Medicaid (Medical Assistance) in the state of Pennsylvania.
I
cannot enumerate the number of rich Republicans who tried to get the government to support
their elderly while the children of those elderly got the money. I could tell you stories,
including one about a certain Republican Governor of Pennsylvania who tried to put his adult,
but mentally handicapped child on Medicaid.
It is remarkable how farmers, who are particularly reliant on federal government programs
to buy seed, equipment, get loans, get crop subsidies, and market their food, still support
Trump, even though these programs are shut down and he's started a trade war. One farmer in
today's issue supports Trump, saying "we need some border security", even though it means he
might lose his farm. What kind of politics is this where people support a President who
intentionally ruins their prospects and their way of life? It reminds me how dictators keep
power through propaganda, rewriting history and painting its leadership as heroic. Fox News
is like North Korean TV rewiring Republican brains to believe that Republicans, no matter how
bone-headed, are always good, and Democrats are always bad, so much so they are willing to
lose the farm, like North Koreans are willing to starve.
@Mark Nuckols all the government programs that help business mean that the wealthy owe
some money back. when 5000 workers of a large corporation all drive the company trucks on
free public roads built with tax dollars, when those roads need repair, it sure should be
taxes on the company that helps pay, along with the gas tax we all pay. Your mistake is in
thinking that the income of the company owner was earned by him and him alone, but in
reality, the taxpayers helped him plenty every step of the way. You just did not see it
all.
The article focuses on food inspections, but what about drug inspections? Is the FDA
inspecting pharma manufacturing houses? Are they inspecting precursor chemicals commonly
imported from, say, China? Libertarians (along with the rest of us) may be in for much more
consequential disappointments than bad lettuce.
Well, at this point it certainly comes as no surprise that the narrowly tailored
ideological conceit republicans like to think of as - laughably - 'Libertarianism' was little
more than an economic grubsteak to the plutocratic interests. Indeed, it makes my head spin
to think how quickly the so-called libertarians of the republican party would support
rollbacks on women's reproductive liberties, not to mention the liberties of minorities and
the LGBTQ community, not to mention how they would import the Christian Right's version of
theology into the public domain. (Ah yes, get government off our backs, but shove God into
every home.) The issue that looms broadly over all this, however, is the republican's intent
to liquidate this nation's status as technologically advanced, industrialized liberal
democracy. Apparently the maintenance/perpetuation of modernity is not compatible with right
wing notions of 'liberty,' let alone libertarianism.
The first libertarian I knew was a slum landlord who did not want the Government
regulations concerning maintenance of apartments and the like. This seems like a common trait
among the political group as I think libertarians are more interested in
profit.
No one complains more loudly and more often about attempts to curtail his first amendment
rights "guaranteed by the constitution," than my libertarian friend, who refuses to pay
taxes, then expects the government he won't support to protect his freedoms. If you really
miss those debate club arguments from jr. high school, go try to talk sense to some
libertarians. For the rest of us, plain old Republicans are a perfectly adequate source of
flawed reasoning.
@Mark Nuckols Wrong! Cutting tax rates on the wealthy are stealing from the rest of us. We
make contributions every hour of every day which are hoovered up by the wealthy and the
powerful. Meanwhile we cannot afford the cost of living, which has skyrocketed vs wages and
benefits. The cost of an apartment is exorbitant. The cost of health care is exorbitant.
Meanwhile the commons suffer. Infrastructure suffers. Sidewalks are a menace. There is lead
in the water. Rich people who do not pay their fair share of taxes are stealing from the
people in so many ways it's impossible to count them. But count them in years lost, in lives
cut short, in lives blighted.
Republicans aren't against government, it has grown more under every Republican president
including Reagan himself. They simply have their preferences as to who benefits from
it.
I'm surprised that the air traffic controllers haven't all called in sick. They have the
collective power to bring air travel to a standstill. I've long felt that a general
nationwide strike would finally get the attention of our corporate overlords. After all, all
they care about is money--just like Trump and the GOP.
When two elephants fight, its the grass that gets uprooted. In this show of arrogance and
egos its the lives of many ordinary Americans that is adversely affected. I only wish that
this crisis comes to an end soon to the relief of many.
@jrinsc, exactly right with an academic exception. Adam Smith and his ideas of free market
competition assumed that there would be large number of companies competing with each other
with their sole means of competition being consumer satisfaction, price and employee
efficiency. Anyone who couldn't compete went out of business, hence "free market". The
government's only role is to enforce anti-trust laws to keep businesses small and
competitive, and assure that the competitive triangle of business, labor, and consumer are
kept in balance. Fundamentally big business is bad, always! What real "free markets" DO NOT
include is the idea that a small number of huge companies pay the government to create a
competition free environment. The term "free market" has been stolen to mean that companies
can do anything they want to succeed, including creating laws with profitable loopholes, laws
to inhibit labor participation in the competition, and laws that inhibit consumers from using
fraud laws to suppress shoddy products. In reality there is no "free market", as @jrinsc
said, except to mean that big companies are free to do whatever they want to be
profitable.
My first lecture in economics dealt with free. The professor, then the Chief Economist at
the Cleveland Fed, made the point that nothing was free: no free lunch; no free air; no free
love. The point that he made was that somebody always pays. For everything; maybe not you,
not now; but somebody does. So every time that I hear this Republican rant about free
markets, I begin to laugh.
I am wondering if Mitch McConnell and his close Republican allies have been living off
food stamps because it seems to me they all have been incredibly unproductive for years which
he sights as a consequence of anyone using food stamps.
@Joel Sanders This is completely specious reasoning. There are any number of non-state
food groups that compete to set, e.g., organic, standards for food... for their participants.
And they can restrict anyone from using their seal of approval without meeting their
requirements. What they can't do, and the State can, is to require tainted products to be
removed from distribution. Having the power of the State depends on law that transcends
private agreement. And in the case of food, drugs, highways, airlines, and a number of other
avenues of social life, that strikes me as a valuable thing. Why is this SO difficult for
you, Mr. Sanders?
I once heard a conservative economist give a speech in which he denounced the FDA for its
suppression of competition in the pharmaceutical industry. I asked him what would protect the
consumer if the market replaced the Feds as regulator of new drugs. He responded that, if my
wife died from the effects of a toxic drug, I could always sue the firm that produced it. I
found this notion deeply comforting. I might lose my wife, but the drug company would have to
compensate me with a pile of dollars, assuming I could prove its negligence. For this
libertarian, a life and money weighed equally in the scales of justice.
The people who support libertarianism are like those who support biblical literalism
(fundamentalism). The libertarians want to get rid of some laws and regulations but not all
of them. Just the ones they don't like. Usually these are laws which make corporations and
businesses sell clean and safe food, treat employees fairly, pay taxes, etc. The libertarians
don't want to get rid of laws which help business, corporations, and the well-to-do. They
want to be sure that Boeing, Lockheed, and others get cushy defense contracts, the petroleum
companies get subsidies, Big Pharma gets to charge a lot for drugs, etc. It is just a new
name for the same old playbook -- make things tough on the weak and poor -- those with dark
skins, immigrants, etc. All the while being solicitous for the well-off and powerful.
Religious literalist do the same -- pick out the Bible verses which support the desired
message. Ignore those which don't. So many things don't change. We get give them a new
name.
Actually, Krugman didn't confuse Libertarians and Republicans. He said that Republicans
used Libertarian rhetoric but weren't true Libertarians, and he didn't accuse Libertarians of
favoring Republican policies across the board.
@Bill: See Michael Moore's Fahrenheit 11/9, which covers the Flint water crisis in depth.
These people didn't even know they were drinking contaminated water until a health worker
broke ranks and made it public. THEN nothing was done.....(Oh, the state provided bottled
water for a while, to drink).... The children of Flint were suffering IRREVERSIBLE brain
damage due to lead in the water.....would suing 20 years later fix that? AND why did this
happen at all? The Republican governor of the state wanted to help his buddies make a lot of
money....
@Goodglud Excellent link! We need to call it what it is. No more reduce "regulations"
which people hear as reducing red tape. Make them advocate to "reduce
protections."
@AndyE, Berkley, MI: Nice turn on Jennings' corollary to Murphy's Law (the chances of the
toast falling buttered side down on the carpet is directly proportional to the cost of the
carpet).
Money talks louder than reason. So long as moneyed libertarians like the Koch Brothers buy
political influence, they will purchase an agenda to benefit themselves at our
expense.
"In the case of the party establishment, that agenda is about redistributing income up the
scale, and in particular helping important donor interests. Republican politicians may invoke
the rhetoric of free markets to justify cutting taxes for the rich and benefits for the poor,
or removing environmental regulations that hurt polluters' profits, but they don't really
care about free markets per se." Head of nail, meet hammer. The US used to be the world's
beacon of democratic values. No longer. The political system has been severely corrupted by
PACs, Super PACs, self-funding billionaire politicians, skewed campaign funding rules,
cynical electoral manipulation, self-interest and a lack of statesmanship amongst the
political classes. You'd think a credible third political party would be able to drive a bus
straight through the middle of this division. Two choices, left or right, just can't be
enough to sustain a democracy.
@Will Schmidt perlboy "We debated perfect markets ..." Like in engineering somebody would
design a car without engine because there is no friction and you just have to give it a push
to get around. I am so happy I am an engineer, forces me into reality.
"Knowing that the food you're eating is now more likely than before to be contaminated,
does that potential contamination smell to you like freedom?" Exactly. One of the most thing
I appreciated of being in the EU is a strong consumer protection and safety regulations. But
I guess, it's to "socialist" for some. Let's wait and see how the UK consumers will enjoy
post-Brexit "freedom".
In answer to to Bill from Michigan, the problem with food and water contamination is that
it may take years to find out that the food or water is actually contaminated, and then
additional time for the public to be informed. After all this time passes, the damage is
already done and lives are irreversibly damaged. As an example, the FDA has very strict
limits on the amount of mycotoxin and bacterial contamination in our food supply. While E.
coli contamination may be detected due to severe acute health effects, the carcinogenic
effects of mycotoxin contamination may not be detected in years. The Flint Michigan lead
contamination occurred in 2014 and wasn't declared an emergency until two years later, when
public health officials alerted the public in 2016. Although this was largely a local issue,
the H.R. 4470, the Safe Drinking Water Act Improved Compliance Awareness Act, mandates that
consumers be informed. So, personally I'd rather have the Federal Government be on the side
of the public and not rely on greedy lawyers.
@ebmem Republicans get in office and go to work to prove that Government doesn't work and
is the problem. Government works fine as long as Republicans are not in charge. The sabotage
any effort to resolve or solve a problem. They complain about the debt and deficit until they
are in office and then they blow the budget to smithereens with invented reasons for war so
they can enrich themselves. They are the problem, not Government.
@Bill, good luck with that. If you survive long enough to sue--and if you can prove the
source of your cancer or other illness--you'll find that personal injury lawsuits get you
nowhere. The big boys always win. Your best remedy is prevention. Don't let yourself or your
loved ones ingest or breathe toxins. Don't let toxins into your groundwater or soil. How do
you do that without government regulation?
Today, medical expenses are stratospheric. Meanwhile, the conservative movement strangles
the welfare state so that nearly everyone in the middle class (regardless of political
affiliation) who wants to live on more than $900 a month must go through legalized fiscal
contortions to be able to pay for adequate care.
@TM Exactly the correct response to libertarians. They like to talk about what "would"
happen, as though lack of government were a theoretical that can be calculated. There are
plenty of real world examples of what "would" happen. There are historical examples too, but
they "would" be different, of course.
@Aubrey Excellent analogy, although we can also use a good old-fashioned term to describe
these 'libertarians', 'conservatives' and religious types -- -- hypocrites ..... of the
highest despicable order.
What courts? Courts are set up, run by and paid for by government. No government means no
court system. You, the little, dying from tainted food, up against a huge agricultural
corporation with deep pockets. Libertarianism is a bully system. Those with the money win and
the rest die. That's it.
@jrinsc How quickly we forget, of course sometimes it isn`t that we forget but rather our
memory is clouded by the smoke from the fires set by vulture capitalism. Upton Sinclair The
Jungle should be required reading for all congress critters and all incoming Presidents. The
Jungle is a mirror to where todays American Nobility, the 21st century Robber Barons, would
like to take us. A disposable population for profit.
Where you see Libertarians, I see people who are so self-unaware and entitled that they
believe the only apt government subsidies are the ones that benefit them. Remember the ACA
debate line - "keep government out of my medicare?" Most people have no idea of what the
government does! What about the staunch GOP voters who nonetheless complain when the
government doesn't provide immediate aid to them after a disaster, but hesitate when the aid
is going to others? And do they comprehend that all disasters - even those claimed to be
"natural" - are actually man made? And do those that value privacy and their right to do what
they want - do they really think that corporations and businesses will keep their products
fair and safe? No, because corporations and businesses take the short view, while fairness
and safety - both of which contribute to the health of the nation and its people - take the
long view. Libertarians and their ilk are self-entitled peoples who only think about the
immediate impact on themselves and their wallets. They change their tunes quickly when
government is needed to help their bottom line.
What people with GOP/libertarian leanings should realize is that government regulations
were ONLY put into place in response to the horrifying abuses of laissez faire
capitalism.
@Bill You keep right on believing. THE FACTS ARE that people who would sell you
contaminated food have ways of covering up all the evidence. Besides, they could always hide
behind the fact that the USDA and FDA inspectors weren't working and "they didn't know"
because of that. You would lose any lawsuit because the inspectors didn't reveal any problems
and the business owner "did not know to the best of his/her knowledge." EVERYTHING would be
blamed on the shutdown, and you would LOSE>
Boy howdy, but it's easy to spout the libertarian line when the FDA, FTC, SEC, EPA, etc.
do what they do, day in and day out. Government succeeds quietly! Many post smack about what
seem like excesses, while they enjoy safe food and drugs, modest limits on fraudsters, clean
air and water, etc.: Now, maybe, we'll see what happens when those who mouth off get the
freedom they have demanded for decades. With a months' long shutdown lives will be lost, but
those who disparage the regulatory state might get their come-uppance. The coming months, if
they involve a partial shutdown, will highlight the value government offers. Opportunities
like this one don't appear often. This writer, for one, hopes it represents a crisis which
won't be wasted.
@C Wolfe I made friends with Libertarian from Texas in college my freshman year. He got me
to read Ayn Rand's Fountainhead and Atlas Shrugged. My first take was that Ayn Rand was a
pretty weak writer and clearly had serious empathy issues to the point of being a bit creepy.
My friend insisted that everyone should be self reliant and was responsible for their own
destiny until the day he flunked out because his academically weak high school left him
unprepared to survive in our highly selective college. I really felt sorry for him but he was
so far behind I could not help him. I have no idea where he ended up.
As the saying goes, you never miss your water until your well runs dry. A very big part of
me says this is the only way red states will learn how to stop biting the hand that feeds
them: they've been blindly following a party that made no secret that it wished to "starve
the beast". This is what it looks like. This new perspective has delighted me even as I worry
for my friends, family and colleagues who are feeling the effects. I hope our nation survives
this president and learns from the mistakes.
The problem I have with libertarian utopias is that 'the market' isn't going to work to
address all conflicts. So you need to hire enforcement, since government isn't doing it... or
are we keeping the courts? And if the courts rule for you, and the other party just refuses
to pay, now you have to go get your payment. Good luck with that. It all seems likely to
devolve into a 'might makes right' series of standoffs, until people band together into
unified groups to collectively agree to a set of rules, and work together with those rules.
Sounds a lot like government. Or you can just hire some soldiers and go take what you want.
Dare the other guys to take it back. Sounds a lot like anarchy. Libertarians always seems to
me like trying to cherry-pick what they like about government, what benefits them, and then
dump the rest, the stuff that costs them but they can't see the benefit for. Maybe they'll
understand better if they get some contaminated lettuce next time they go grocery
shopping...
@Bill Who exactly administers said courts that you would turn to for justice? Oh that's
right, the government. I hope the irony is not lost on you. Libertarians seem to forgot that
no man is an island to himself.
The people I have met who (loudly) espouse libertarian ideas tend to be of three types -
all of whom benefit from this philosophy at the expense of others: 1) wealthy heirs like
tRump who don't want to pay their taxes since it reduces their ability to live large AND pass
on a dynasty to their heirs. 2) those with the luck to obtain the particular skills and
education that provide a secure job with high remuneration. (Yes, it is usually a lot of
luck) 3) good looking women who are confident that they can latch on to one of those
described in 1) or in a pinch, 2) 2) will complain bitterly when the job market shifts - as
it did for many in computer science after the glory years of the 80s. 3) will complain if
their lawyer doesn't get them a big enough divorce settlement and their looks will no longer
give them a second chance. A good economic system works equally for all people, not just
those benefiting as members of the lucky gene club.
@Socrates Amen. Something also came to mind in reading your comment: Productive modern
blue states subsidize receiving red states, who then, thanks to their outsize representation
via the electoral college, bludgeon the blue states with red policies like deregulation and
taking of health care etc. Like I am paying someone to punch me. "Something is rotten in the
state of Denmark."
We don't see the few inspectors who quietly keep our food safe, the EPA folks testing our
air and rivers. The impact will be felt much later, and with no one to do the forensics, the
story won't be told until well after the shutdown ends. I'm wondering how long the shutdown
will last when visible folks start to go on strike. Will the federal employees who will
perform the promised IRS, Food Stamp and farm distributions go to work, or ally themselves
with their less visible brethren? With transportation, chaos will be most evident. After no
paycheck on Friday, what if TSA doesn't shows or they picket Atlanta, OHare, JFK, SFO, IAD
and DFW? Ditto for their compatriots in the Control Towers. Chaos. Who benefits? Perhaps
we'll learn from Michael Cohen.
We as a nation are in this condition because the American character is one of greed,
selfishness, one who does not think for himself/herself, and one that is controlled through
fear. Maybe once our empire crumbles it will be divided into smaller countries that are
easier to manage like the western European countries. I will move to one of the new countries
that support a balanced budget, hates the concept of Citizens United and K Street lobbyists,
wants to educate their masses, and provides healthcare for everyone rich and not so rich. An
ignorant populous is easier to control and manhandle. The US is a good
example.
@hen3ry "It's fascinating to realize that McConnell, Pence, Trump, and the rest of the
obnoxious crowd are getting paid by the government they want to drown." When you go the rest
of the way you finally get a true sense of how perverted these people are.
Thank you Dr. Krugman for a great perspective. It reminds me of the saying "be careful of
what you wish for" ... for it may actually come true. Save for the sacrifice of many good
Americans who depend on jobs and government benefits and the public in general, this may be
the medicine those Republicans need to cure themselves of their hands off
philosophy.
@Bill I don't believe for a nano-second you would be willing to expose your family to
contaminated or adulterated food on the chance you might be able sue someone after the fact.
It could take you years and many thousands of dollars to get justice that way. There is a
good reason we have agencies like the FDA. Many years before you were born, we in fact had
the very situation you say you would be fine with. It was buyer beware for all foodstuffs.
You could not trust food producers to put on the label what was actually in the can or
bottle. Meat packers were packing and sending out absolute filth. If you want a hint of what
it would be like here without these protective agencies, do a little research on food safety
in China. It will make you sick when you see what the Chinese are exposed
to.
@C Wolfe Libertarian or not, in this country money is always more valued than human life.
Again, it took Western Europe more than 2,000 years to become somewhat civilized and it will
take this continent at least that long.
@Eleanor How will you get around this? Reagan said, 'The nine most terrifying words in the
English language are "I'm from the government, and I'm here to help."'
@ebmem I am an employee of Medicaid who sees countless fellow workers toil long after
quitting time to cover the most people, with the least potential harm or burden to them, to
get the best services and quality of life possible, AND doing all that earning maybe half the
compensation of a comparable private sector position. It saddens me that even the program
ensuring our loved ones - or ourselves! - have care at the end of life is not safe from this
kind of bitter, distorted partisan anger.
@Bill Two words for you: Blue Milk. Look it up. Food contamination is an old story, as old
as tort law. The FDA was created because tort law was unequal to the task. If you think the
modern day is different, how is that romaine lettuce lawsuit going for you? As far as I know,
no one knows where the contamination came from, much less who to sue. The romaine situation
illustrates another flaw in your libertarian fantasy. The individual harm is collectively
huge but individually small. Any action -- preventive or retributive -- requires collective
action. Which, actually, is what democracy is, and why democracy created the
FDA.
@Linda You said it, Linda. I just returned from Europe. And I could not believe again how
much tastier the meat and produce was - not only in restaurants but in humble meals in the
country. Commercial food produced in the United States is terrible, tasteless, and full of
pernicious additives. Ma and Pa Kettle have become inured to it, and don't know any
better.
@Wilbray Thiffault "Well, Mitch McConnell is not on the food stamp program, and he manages
to be one of the most 'non productive' senators in the history of the US Senate." Correction:
Mitch McConnell and his fellow Republicans are indeed on the food stamp program, the best one
ever, and the government shutdown is not preventing them all from being paid. They will never
give it up willingly.
Prof. Krugman says, "Meanwhile, the philosophy of the party's base is, in essence, big
government for me but not for thee." I totally agree. It is indeed Trump and the Republican
party who is disrupting the free market. The free market can be sustained only when it is run
by smart and fair-minded people including top-notched economists and politicians. Otherwise,
the socialism-monster would threaten and collapse the free market anytime. What I mean by
'the socialism-monster' is not the economies of Northern European countries such as the
Netherlands, Sweden, etc. Some Americans call their economies 'socialism', but that's very
wrong; their economies are indeed one of the most advanced capitalistic systems. How can't
they be? Capitalism in a sense started from there, i.e., the business markets of the
Netherlands, Denmark, Portugal, etc. Only when capitalism is truly advanced can well-rounded
safety nets exist. In any case, genuinely socialist countries such as North-Korea and China
do not protect human rights and thus prohibit freedom. The real problem with Trump and his
allies is that they offer the strongest momentum for socialism by killing the chance for
developing truly healthy free market. Trump, with Putin, is turning the whole world back into
the days of nationalism, ideologism, and colonialism. They all champion big , huge, monstrous
government. If there is any American crisis, it is not border security but gun violence. But
Trump underwrites the NRA.
Voters around the world revolt against leaders who won't improve their lives.
Newly-elected Utah senator Mitt Romney kicked off 2019 with an op-ed in the Washington Post
that savaged Donald Trump's character and leadership. Romney's attack and Trump's response
Wednesday morning on Twitter are the latest salvos in a longstanding personal feud between the
two men. It's even possible that Romney is planning to challenge Trump for the Republican
nomination in 2020. We'll see.
But for now, Romney's piece is fascinating on its own terms. It's well-worth reading. It's a
window into how the people in charge, in both parties, see our country.
Romney's main complaint in the piece is that Donald Trump is a mercurial and divisive
leader. That's true, of course. But beneath the personal slights, Romney has a policy critique
of Trump. He seems genuinely angry that Trump might pull American troops out of the Syrian
civil war. Romney doesn't explain how staying in Syria would benefit America. He doesn't appear
to consider that a relevant question. More policing in the Middle East is always better. We
know that. Virtually everyone in Washington agrees.
Corporate tax cuts are also popular in Washington, and Romney is strongly on board with
those, too. His piece throws a rare compliment to Trump for cutting the corporate rate a year
ago.
That's not surprising. Romney spent the bulk of his business career at a firm called Bain
Capital. Bain Capital all but invented what is now a familiar business strategy: Take over an
existing company for a short period of time, cut costs by firing employees, run up the debt,
extract the wealth, and move on, sometimes leaving retirees without their earned pensions.
Romney became fantastically rich doing this.
Meanwhile, a remarkable number of the companies are now bankrupt or extinct. This is the
private equity model. Our ruling class sees nothing wrong with it. It's how they run the
country.
Mitt Romney refers to unwavering support for a finance-based economy and an internationalist
foreign policy as the "mainstream Republican" view. And he's right about that. For generations,
Republicans have considered it their duty to make the world safe for banking, while
simultaneously prosecuting ever more foreign wars. Modern Democrats generally support those
goals enthusiastically.
There are signs, however, that most people do not support this, and not just in America. In
countries around the world -- France, Brazil, Sweden, the Philippines, Germany, and many others
-- voters are suddenly backing candidates and ideas that would have been unimaginable just a
decade ago. These are not isolated events. What you're watching is entire populations revolting
against leaders who refuse to improve their lives.
Something like this has been in happening in our country for three years. Donald Trump rode
a surge of popular discontent all the way to the White House. Does he understand the political
revolution that he harnessed? Can he reverse the economic and cultural trends that are
destroying America? Those are open questions.
But they're less relevant than we think. At some point, Donald Trump will be gone. The rest
of us will be gone, too. The country will remain. What kind of country will be it be then? How
do we want our grandchildren to live? These are the only questions that matter.
The answer used to be obvious. The overriding goal for America is more prosperity, meaning
cheaper consumer goods. But is that still true? Does anyone still believe that cheaper iPhones,
or more Amazon deliveries of plastic garbage from China are going to make us happy? They
haven't so far. A lot of Americans are drowning in stuff. And yet drug addiction and suicide
are depopulating large parts of the country. Anyone who thinks the health of a nation can be
summed up in GDP is an idiot.
The goal for America is both simpler and more elusive than mere prosperity. It's happiness.
There are a lot of ingredients in being happy: Dignity. Purpose. Self-control. Independence.
Above all, deep relationships with other people. Those are the things that you want for your
children. They're what our leaders should want for us, and would want if they cared.
But our leaders don't care. We are ruled by mercenaries who feel no long-term obligation to
the people they rule. They're day traders. Substitute teachers. They're just passing through.
They have no skin in this game, and it shows. They can't solve our problems. They don't even
bother to understand our problems.
One of the biggest lies our leaders tell us that you can separate economics from everything
else that matters. Economics is a topic for public debate. Family and faith and culture,
meanwhile, those are personal matters. Both parties believe this.
Members of our educated upper-middle-classes are now the backbone of the Democratic Party
who usually describe themselves as fiscally responsible and socially moderate. In other words,
functionally libertarian. They don't care how you live, as long as the bills are paid and the
markets function. Somehow, they don't see a connection between people's personal lives and the
health of our economy, or for that matter, the country's ability to pay its bills. As far as
they're concerned, these are two totally separate categories.
Social conservatives, meanwhile, come to the debate from the opposite perspective, and yet
reach a strikingly similar conclusion. The real problem, you'll hear them say, is that the
American family is collapsing. Nothing can be fixed before we fix that. Yet, like the
libertarians they claim to oppose, many social conservatives also consider markets sacrosanct.
The idea that families are being crushed by market forces seems never to occur to them. They
refuse to consider it. Questioning markets feels like apostasy.
Both sides miss the obvious point: Culture and economics are inseparably intertwined.
Certain economic systems allow families to thrive. Thriving families make market economies
possible. You can't separate the two. It used to be possible to deny this. Not anymore. The
evidence is now overwhelming. How do we know? Consider the inner cities.
Thirty years ago, conservatives looked at Detroit or Newark and many other places and were
horrified by what they saw. Conventional families had all but disappeared in poor
neighborhoods. The majority of children were born out of wedlock. Single mothers were the rule.
Crime and drugs and disorder became universal.
What caused this nightmare? Liberals didn't even want to acknowledge the question. They were
benefiting from the disaster, in the form of reliable votes. Conservatives, though, had a ready
explanation for inner-city dysfunction and it made sense: big government. Decades of
badly-designed social programs had driven fathers from the home and created what conservatives
called a "culture of poverty" that trapped people in generational decline.
There was truth in this. But it wasn't the whole story. How do we know? Because virtually
the same thing has happened decades later to an entirely different population. In many ways,
rural America now looks a lot like Detroit.
This is striking because rural Americans wouldn't seem to have much in common with anyone
from the inner city. These groups have different cultures, different traditions and political
beliefs. Usually they have different skin colors. Rural people are white conservatives,
mostly.
Yet, the pathologies of modern rural America are familiar to anyone who visited downtown
Baltimore in the 1980s: Stunning out of wedlock birthrates. High male unemployment. A
terrifying drug epidemic. Two different worlds. Similar outcomes. How did this happen? You'd
think our ruling class would be interested in knowing the answer. But mostly they're not. They
don't have to be interested. It's easier to import foreign labor to take the place of
native-born Americans who are slipping behind.
But Republicans now represent rural voters. They ought to be interested. Here's a big part
of the answer: male wages declined. Manufacturing, a male-dominated industry, all but
disappeared over the course of a generation. All that remained in many places were the schools
and the hospitals, both traditional employers of women. In many places, women suddenly made
more than men.
Now, before you applaud this as a victory for feminism, consider the effects. Study after
study has shown that when men make less than women, women generally don't want to marry them.
Maybe they should want to marry them, but they don't. Over big populations, this causes a drop
in marriage, a spike in out-of-wedlock births, and all the familiar disasters that inevitably
follow -- more drug and alcohol abuse, higher incarceration rates, fewer families formed in the
next generation.
This isn't speculation. This is not propaganda from the evangelicals. It's social science.
We know it's true. Rich people know it best of all. That's why they get married before they
have kids. That model works. But increasingly, marriage is a luxury only the affluent in
America can afford.
And yet, and here's the bewildering and infuriating part, those very same affluent married
people, the ones making virtually all the decisions in our society, are doing pretty much
nothing to help the people below them get and stay married. Rich people are happy to fight
malaria in Congo. But working to raise men's wages in Dayton or Detroit? That's crazy.
This is negligence on a massive scale. Both parties ignore the crisis in marriage. Our
mindless cultural leaders act like it's still 1961, and the biggest problem American families
face is that sexism is preventing millions of housewives from becoming investment bankers or
Facebook executives.
For our ruling class, more investment banking is always the answer. They teach us it's more
virtuous to devote your life to some soulless corporation than it is to raise your own
kids.
Sheryl Sandberg of Facebook wrote an entire book about this. Sandberg explained that our
first duty is to shareholders, above our own children. No surprise there. Sandberg herself is
one of America's biggest shareholders. Propaganda like this has made her rich.
We are ruled by mercenaries who feel no long-term obligation to the people they rule.
They're day traders. Substitute teachers. They're just passing through. They have no skin in
this game, and it shows.
What's remarkable is how the rest of us responded to it. We didn't question why Sandberg was
saying this. We didn't laugh in her face at the pure absurdity of it. Our corporate media
celebrated Sandberg as the leader of a liberation movement. Her book became a bestseller: "Lean
In." As if putting a corporation first is empowerment. It is not. It is bondage. Republicans
should say so.
They should also speak out against the ugliest parts of our financial system. Not all
commerce is good. Why is it defensible to loan people money they can't possibly repay? Or
charge them interest that impoverishes them? Payday loan outlets in poor neighborhoods collect
400 percent annual interest.
We're OK with that? We shouldn't be. Libertarians tell us that's how markets work --
consenting adults making voluntary decisions about how to live their lives. OK. But it's also
disgusting. If you care about America, you ought to oppose the exploitation of Americans,
whether it's happening in the inner city or on Wall Street.
And by the way, if you really loved your fellow Americans, as our leaders should, if it
would break your heart to see them high all the time. Which they are. A huge number of our
kids, especially our boys, are smoking weed constantly. You may not realize that, because new
technology has made it odorless. But it's everywhere.
And that's not an accident. Once our leaders understood they could get rich from marijuana,
marijuana became ubiquitous. In many places, tax-hungry politicians have legalized or
decriminalized it. Former Speaker of the House John Boehner now lobbies for the marijuana
industry. His fellow Republicans seem fine with that. "Oh, but it's better for you than
alcohol," they tell us.
Maybe. Who cares? Talk about missing the point. Try having dinner with a 19-year-old who's
been smoking weed. The life is gone. Passive, flat, trapped in their own heads. Do you want
that for your kids? Of course not. Then why are our leaders pushing it on us? You know the
reason. Because they don't care about us.
When you care about people, you do your best to treat them fairly. Our leaders don't even
try. They hand out jobs and contracts and scholarships and slots at prestigious universities
based purely on how we look. There's nothing less fair than that, though our tax code comes
close.
Under our current system, an American who works for a salary pays about twice the tax rate
as someone who's living off inherited money and doesn't work at all. We tax capital at half of
what we tax labor. It's a sweet deal if you work in finance, as many of our rich people do.
In 2010, for example, Mitt Romney made about $22 million dollars in investment income. He
paid an effective federal tax rate of 14 percent. For normal upper-middle-class wage earners,
the federal tax rate is nearly 40 percent. No wonder Mitt Romney supports the status quo. But
for everyone else, it's infuriating.
Our leaders rarely mention any of this. They tell us our multi-tiered tax code is based on
the principles of the free market. Please. It's based on laws that the Congress passed, laws
that companies lobbied for in order to increase their economic advantage. It worked well for
those people. They did increase their economic advantage. But for everyone else, it came at a
big cost. Unfairness is profoundly divisive. When you favor one child over another, your kids
don't hate you. They hate each other.
That happens in countries, too. It's happening in ours, probably by design. Divided
countries are easier to rule. And nothing divides us like the perception that some people are
getting special treatment. In our country, some people definitely are getting special
treatment. Republicans should oppose that with everything they have.
What kind of country do you want to live in? A fair country. A decent country. A cohesive
country. A country whose leaders don't accelerate the forces of change purely for their own
profit and amusement. A country you might recognize when you're old.
A country that listens to young people who don't live in Brooklyn. A country where you can
make a solid living outside of the big cities. A country where Lewiston, Maine seems almost as
important as the west side of Los Angeles. A country where environmentalism means getting
outside and picking up the trash. A clean, orderly, stable country that respects itself. And
above all, a country where normal people with an average education who grew up in no place
special can get married, and have happy kids, and repeat unto the generations. A country that
actually cares about families, the building block of everything.
What will it take a get a country like that? Leaders who want it. For now, those leaders will
have to be Republicans. There's no option at this point.
But first, Republican leaders will have to acknowledge that market capitalism is not a
religion. Market capitalism is a tool, like a staple gun or a toaster. You'd have to be a fool
to worship it. Our system was created by human beings for the benefit of human beings. We do
not exist to serve markets. Just the opposite. Any economic system that weakens and destroys
families is not worth having. A system like that is the enemy of a healthy society.
Internalizing all this will not be easy for Republican leaders. They'll have to unlearn
decades of bumper sticker-talking points and corporate propaganda. They'll likely lose donors
in the process. They'll be criticized. Libertarians are sure to call any deviation from market
fundamentalism a form of socialism.
That's a lie. Socialism is a disaster. It doesn't work. It's what we should be working
desperately to avoid. But socialism is exactly what we're going to get, and very soon unless a
group of responsible people in our political system reforms the American economy in a way that
protects normal people.
If you want to put America first, you've got to put its families first.
Adapted from Tucker Carlson's monologue from "Tucker Carlson Tonight" on January 2,
2019.
I think this is still the wrong tack, as it gets too close to the wrong headed Modern Money
Theory where the ignorant think money can be dumped into the economy, in near infinite
amounts, without regard for taxation, with no side-effects.
I think the better tack is to attack it as a cash-flow issue. The rich are taking money
out of active circulation, and lending it back into the economy. This is why debt is
exploding at an unsustainable rate.
We need to use the tax code to force the rich to spend or capital invest their income back
into the economy.
Observations of the 1950-1960s tax code show that the rich didn't actually pay a higher
effective rate. They used loopholes.
RIGHT!!! Those loopholes were created as the carrot to get the rich to spend or
invest.
Don't phrase it as "We need to raise taxes to fund..." It smacks of "take from workers and
give to lazy".
We need to phrase it as "We need to tax to force the rich to spend or invest."
The spending and investing increases total economic activity. The poor become middle
class, going from paying little-to-no tax to paying 20-30% effective rates.
AND, it is that lifting of the poor into the middle class that creates the extra tax
revenue to fund needed social and infrastructure spending.
The solution is to put the Federal government on GAAP bookkeeping. An income and expense
ledger. And asset and liabilty ledger.
State and local government sorta do this, ie, they balance income and expense except for
capital expense funded with bonds.
What is not done is the listing of all assets offset by debt, etc, and shareholder
equity.
For NYC vs smallville KS, the liabilities of NYC would be tens of billions and svKS zero,
but the assets of NYC multiples of liabilities vs a few thousand in asset value for that debt
free small town.
Given Adam Smith, the assets of a government should include its people as they are the
biggest wealth "of nations". The better educated, skilled, more productive, substantially
derermined by investing in education, health, etc, the greater the asset value, the greater
the wealth.
But just limiting debt to bonds tied to new assets, bonds for roads, schools, etc. Taxing
the assets to pay off the bonds while taxing the people for current consumption is
prudent.
Track refers to trains or roads, meaning one of limited options.
Tack is a sailing term used to describe how you get a sailboat to go upwind by not going
directly in the direction you want, but rather at an angle.
I am concerned with the money supply.
Currently, 10% of GDP leaks out via structural imbalances, replaced by debt increasing at
3x the rate of population(1%ish) and inflation(2%ish).
The OP Krugman tacks the tack (or is it track, becasue of limited options?) that we should
just keep doing that. He is saying we should ignore the massive deficits, and wealth transfer
to the rich that the interest on that debt creates.
I believe this the wrong tack (or is it track?), instead thinking we should attack and
reverse the trade imbalances such that the debt is no longer necessary.
You are still misunderstand the problem, viewing the macroeconomy through a microeconomic
lens.
You want the federal government to start acting "responsible", ignoring the lessons of the
1800s that the rich would soon suck all the money out of the economy, creating a
depression.
You get blood out of a turnip by first putting blood into a turnip.
You get money out of an economy (as the trade does $500+B a year and the rich are doing
$1T+ a year) but first putting money in ($1.5T+ new debt a year).
You think we can stop putting blood into the turnip... I mean stop putting money into the
economy, without first stopping the giant drain of blood... dang it... I mean money out of
the economy.
In reality, there appear to be 2 options. 1) Keep putting money in and taking it out. 2)
Stop taking it out so that we can stop putting it in.
Your option of "just stop putting money in, without first addressing the drains" is sure
to lead to collapse.
To anyone who thinks that the Republican Party knows a thing about economics or business:
you're delusional. Republicans know a tremendous amount about greed, theft and selfishness.
Arthur Laffer is the idiotic tax-cut patron saint economist of the Grand Old Phonies who
helped Ronnie Reagan raid the US Treasury for the uber-wealthy.
George W Bush re-implemented Laffer-economics and drove the nation into a Depression.
Trump and the GOP are in the process of driving America over another bankrupting 0.1%
welfare tax-cut cliff -- remember it took Bush-Cheney a good seven years to do it.
And guess who recently helped drive Kansas bankrupt with tax cuts for the rich ?
GOP tax-cut saint Arthur Laffer. He helped former Kansas Gov. Sam Brownback (R) pass tax
cuts through the Kansas legislature. In August 2012, Laffer promised a crowd at a small
business forum in Kansas that the cuts would produce "enormous prosperity," adding that
they'll "make a big difference in a decade." They did make a big difference.
Kansas employment and the Kansas state economy both grew slower than the national rates,
and the drastic decline in tax revenue coming into the state's treasury blew a gigantic hole
in its budget.
Kansas reversed the destructive tax cuts in order save Kansas. The lesson is plain and
simple and happens over and over again. Republicans are economic wrecking balls hellbent on
destroying society for corrupt billionaires. D to go forward. R for nationally-assisted
suicide.
"... Human capital. This word as well as any other captures the dehumanizing nature of capitalism. Just a factor of production. We don't have blood and bone and families. We have exploitable skills. Screw that. ..."
"... Leave not one stone upon another when you rise up and destroy the dystopian economy these swine have created. ..."
Human capital. This word as well as any other captures the dehumanizing nature of
capitalism. Just a factor of production. We don't have blood and bone and families. We have
exploitable skills. Screw that.
Leave not one stone upon another when you rise up and destroy the dystopian economy
these swine have created.
"Human capital" is a deceptive way of saying "buy low, sell high". As an employee, you are
bought for as little as possible, and sold for as much as possible, with Davos Man collecting
that difference, making him filthy rich off the sweat of your brow. When you can no longer
sweat for Davos Man, you are no longer human capital, and Davos Man would prefer you die
quietly, so he can enjoy his jets and yachts without looking at the wreckage left behind.
"... The following is a transcript of CounterPunch Radio – Episode 19 (originally aired September 21, 2015). Eric Draitser interviews Michael Hudson. ..."
"... The Troika and IMF doctrine of austerity and privatization ..."
ED: Thanks so much for coming on. As I mentioned already, the title of your book –
Killing the Host: How Financial Parasites and Debt Bondage Destroy the Global Economy –
is an apt metaphor. So parasitic finance capital is really what you're writing about. You
explain that it essentially survives by feeding off what we might call the real economy. Could
you draw out that analogy a little bit? What does that mean? How does finance behave like a
parasite toward the rest of the economy?
MH: Economists for the last 50 years have used the term "host economy" for a country that
lets in foreign investment. This term appears in most mainstream textbooks. A host implies a
parasite. The term parasitism has been applied to finance by Martin Luther and others, but
usually in the sense that you just talked about: simply taking something from the host.
But that's not how biological parasites work in nature. Biological parasitism is more
complex, and precisely for that reason it's a better and more sophisticated metaphor for
economics. The key is how a parasite takes over a host. It has enzymes that numb the host's
nervous system and brain. So if it stings or gets its claws into it, there's a soporific
anesthetic to block the host from realizing that it's being taken over. Then the parasite sends
enzymes into the brain. A parasite cannot take anything from the host unless it takes over the
brain.
The brain in modern economies is the government, the educational system, and the way that
governments and societies make their economic policy models of how to behave. In nature, the
parasite makes the host think that the free rider, the parasite, is its baby, part of its body,
to convince the host actually to protect the parasite over itself.
That's how the financial sector has taken over the economy. Its lobbyists and academic
advocates have persuaded governments and voters that they need to protect banks, and even need
to bail them out when they become overly predatory and face collapse. Governments and
politicians are persuaded to save banks instead of saving the economy, as if the economy can't
function without banks being left in private hands to do whatever they want, free of serious
regulation and even from prosecution when they commit fraud. This means saving creditors
– the One Percent – not the indebted 99 Percent.
It was not always this way. A century ago, two centuries ago, three centuries ago and all
the way back to the Bronze Age, almost every society has realized that the great destabilizing
force is finance – that is, debt. Debt grows exponentially, enabling creditors ultimately
to foreclose on the assets of debtors. Creditors end up reducing societies to debt bondage, as
when the Roman Empire ended in serfdom.
About a hundred years ago in America, John Bates Clark and other pro-financial ideologues
argued that finance is not external to the economy. It's not extraneous, it's part of the
economy, just like landlords are part of the economy. This means that if the financial sector
takes more revenue out of the economy as interest, fees or monopoly charges, it's because
finance is an inherent and vital part of the economy, adding to GDP, not merely siphoning it
off from producers to pay Wall Street and the One Percent. So our economic policy protects
finance as if it helps us grow, not siphons off our growth.
A year or two ago, Lloyd Blankfein of Goldman Sachs said that the reason Goldman Sachs'
managers are paid more than anybody else is because they're so productive. The question is,
productive of what? The National Income and Product Accounts (NIPA) say that everybody is
productive in proportion to the amount of money they make/take. It doesn't matter whether it's
extractive income or productive income. It doesn't matter whether it's by manufacturing
products or simply taking money from people, or simply by the fraud that Goldman Sachs,
Citigroup, Bank of America and others paid tens of millions of dollars in fines for committing.
Any way of earning income is considered to be as productive as any other way. This is a
parasite-friendly mentality, because it denies that there's any such thing as unearned income.
It denies that there's a free lunch. Milton Friedman got famous for promoting the idea that
there's no such thing as a free lunch, when Wall Street knows quite well that this is what the
economy is all about. It's all about how to get a free lunch, with risks picked up by the
government. No wonder they back economists who deny that there's any such thing!
ED: To get to the root of the issue, what's interesting to me about this analogy that we're
talking about is that we hear the term neoliberalism all the time. It is an ideology I that's
used to promote the environment within which this parasitic sort of finance capital can
operate. So could you talk a bit about the relationship between finance capital and
neoliberalism as its ideology.
MH: Today's vocabulary is what Orwell would call DoubleThink. If you're going to call
something anti-liberal and against what Adam Smith and John Stuart Mill and other classical
economists described as free markets, you pretend to be neoliberal. The focus of Smith, Mill,
Quesnay and the whole of 19th-century classical economics was to draw a distinction between
productive and unproductive labor – that is, between people who earn wages and profits,
and rentiers who, as Mill said, "get rich in their sleep." That is how he described landowners
receiving groundrent. It also describes the financial sector receiving interest and "capital"
gains.
The first thing the neoliberal Chicago School did when they took over Chile was to close
down every economics department in the country except the one they controlled at the Catholic
University. They started an assassination program of left wing professors, labor leaders and
politicians, and imposed neoliberalism by gunpoint. Their idea is you cannot have anti-labor,
deregulated "free markets" stripping away social protections and benefits unless you have
totalitarian control. You have to censor any idea that there's ever been an alternative, by
rewriting economic history to deny the progressive tax and regulatory reforms that Smith, Mill,
and other classical economists urged to free industrial capitalism from the surviving feudal
privileges of landlords and predatory finance.
This rewriting of the history of economic thought involves inverting the common vocabulary
that people use. So, the idea of the parasitism is to replace the meaning of everyday words and
vocabulary with their opposite. It's DoubleThink.
Democratic vs. oligarchic government and their respective economic doctrines
ED: I don't want to go too far off on a tangent, but you mentioned the example of Chile's 1973
coup and the assassination of Allende to impose the Pinochet dictatorship. That was a
Kissinger/Nixon operation as we know, but what's interesting about that is Chile was
transformed into a sort of experimental laboratory to impose the Chicago school economic model
of what we now would call neoliberalism. Later in our conversation I want to talk a bit about
some recent laboratories we have seen in Eastern Europe, and now in Southern Europe as well.
The important point about neoliberalism is the relationship between totalitarian government and
this form of economics.
MH: That's right. Neoliberals say they're against government, but what they're really
against is democratic government. The kind of governments they support are pre-referendum
Greece or post-coup Ukraine. As Germany's Wolfgang Schäuble said, "democracy doesn't
count." Neoliberals want the kind of government that will create gains for the banks, not
necessarily for se the economy at large. Such governments basically are oligarchic. Once high
finance takes over governments as a means of exploiting the 99 Percent, it's all for active
government policy – for itself.
Aristotle talked about this more than 2,000 years ago. He said that democracy is the stage
immediately proceeding oligarchy. All economies go through three stages repeating a cycle: from
democracy into oligarchy, and then the oligarchs make themselves hereditary. Today, Jeb Bush
wants to abolish the estate tax to help the emerging power elite make itself into a hereditary
aristocracy. Then, some of the aristocratic families will fight among themselves, and take the
public into their camp and promote democracy, so you have the cycle going all over again.
That's the kind of cycle we're having now, just as in ancient Athens. It's a transition from
democracy to oligarchy on its way to becoming an aristocracy of the power elite.
ED: I want to return to the book in a second but I have to interject that one particular
economist hasn't been mentioned yet: Karl Marx. It's an inversion of Marx as well, because
Marx's labor theory of value was that that value ultimately is derived from labor. Parasitic
finance capital is the opposite of that. It may increase prices without value.
MH: Correct, but I should point out that there's often a misinterpretation of the context in
which the labor theory of value was formulated and refined. The reason why Marx and the other
classical economists – William Petty, Smith, Mill and the others – talked about the
labor theory of value was to isolate that part of price that wasn't value. Their purpose was to
define economic rent as something that was not value. It was extraneous to production, and was
a free lunch – the element of price that is charged to consumers and others that has no
basis in labor, no basis in real cost, but is purely a monopoly price or return to privilege.
This was mainly a survival of the feudal epoch, above all of the landed aristocracy who were
the heirs of the military conquers, and also the financial sector of banking families and their
heirs.
The aim of the labor theory of value was to divide the economy between excessive price
gouging and labor. The objective of the classical economists was to bring prices in line with
value to prevent a free ride, to prevent monopolies, to prevent an absentee landlord class so
as to free society from the legacy of feudalism and the military conquests that carved up
Europe's land a thousand years ago and that still underlies our property relations.
The concept and theory of economic rent
ED: That's a great point, and it leads me into the next issue that I want to touch on. You've
mentioned the term already a number of times: the concept of economic rent. We all know rent in
terms of what we have to pay every month to the landlord, but we might not think about what it
means conceptually. It's one of the fabrics with which you've woven this book together. One of
the running themes, rent extraction, and its role in the development of what we've now termed
this parasitic relationship. So, explain for laymen what this means – rent extraction
– and how this concept evolved.
MH: To put the concept of economic rent in perspective, I should point out when I went to
get my PhD over a half a century ago, every university offering a graduate economics degree
taught the history of economic thought. That has now been erased from the curriculum. People
get mathematics instead, so they're unexposed to the concept of economic rent as unearned
income. It's a concept that has been turned on its head by "free market" ideologues who use
"rent seeking" mainly to characterize government bureaucrats taxing the private sector to
enhance their authority – not free lunchers seeking to untax their unearned income. Or,
neoclassical economists define rent as "imperfect competition" (as if their myth of "perfect
competition" really existed) stemming from "insufficient knowledge of the market," patents and
so forth.
Most rent theory was developed in England, and also in France. English practice is more
complex than America. The military conquers imposed a pure groundrent fee on the land, as
distinct from the building and improvements. So if you buy a house from a seller in England,
somebody else may own the land underneath it. You have to pay a separate rent for the land. The
landlord doesn't do anything at all to collect land rent, that's why they call them rentiers or
coupon clippers. In New York City, for example, Columbia University long owned the land
underneath Rockefeller Center. Finally they sold it to the Japanese, who lost their shirt. This
practice is a carry-over from the Norman Conquest and its absentee landlord class.
The word "rent" originally was French, for a government bond (rente). Owners received a
regular income every quarter or every year. A lot of bonds used to have coupons, and you would
clip off the coupon and collect your interest. It's passively earned income, that is, income
not actually earned by your own labor or enterprise. It's just a claim that society has to pay,
whether you're a government bond holder or whether you own land.
This concept of income without labor – but simply from privileges that had been made
hereditary – was extended to the ideas of monopolies like the East India Company and
other trade monopolies. They could produce or buy goods for, let's say, a dollar a unit, and
sell them for whatever the market will bear – say, $4.00. The markup is "empty pricing."
It's pure price gouging by a natural monopoly, like today's drug companies.
To prevent such price gouging and to keep economies competitive with low costs of living and
doing business, European kept the most important natural monopolies in the public domain: the
post office, the BBC and other state broadcasting companies, roads and basic transportation, as
well as early national airlines. European governments prevented monopoly rent by providing
basic infrastructure services at cost, or even at subsidized prices or freely in the case of
roads. The guiding idea is for public infrastructure – which you should think of as a
factor of production along with labor and capital – was to lower the cost of living and
doing business.
But since Margaret Thatcher led Britain down the road to debt peonage and rent serfdom by
privatizing this infrastructure, she and her emulators other countries turned them into
tollbooth economies. The resulting economic rent takes the form of a rise in prices to cover
interest, stock options, soaring executive salaries and underwriting fees. The economy ends up
being turned into a collection of tollbooths instead of factories. So, you can think of rent as
the "right" or special legal privilege to erect a tollbooth and say, "You can't get television
over your cable channel unless you pay us, and what we charge you is anything we can get from
you."
This price doesn't have any relation to what it costs to produce what they sell. Such
extortionate pricing is now sponsored by U.S. diplomacy, the World Bank, and what's called the
Washington Consensus forcing governments to privatize the public domain and create such
rent-extracting opportunities.
In Mexico, when they told it to be more "efficient" and privatize its telephone monopoly,
the government sold it to Carlos Slim, who became one of the richest people in the world by
making Mexico's phones among the highest priced in the world. The government provided an
opportunity for price gouging. Similar high-priced privatized phone systems plague the
neoliberalized post-Soviet economies. Classical economists viewed this as a kind of theft. The
French novelist Balzac wrote about this more clearly than most economists when he said that
every family fortune originates in a great theft. He added that this not only was undiscovered,
but has come taken for granted so naturally that it just doesn't matter.
If you look at the Forbes 100 or 500 lists of each nation's richest people, most made their
fortunes through insider dealing to obtain land, mineral rights or monopolies. If you look at
American history, early real estate fortunes were made by insiders bribing the British Colonial
governors. The railroad barrens bribed Congressmen and other public officials to let them
privatize the railroads and rip off the country. Frank Norris's The Octopus is a great novel
about this, and many Hollywood movies describe the kind of real estate and banking rip-offs
that made America what it is. The nation's power elite basically begun as robber barons, as
they did in England, France and other countries.
The difference, of course, is that in past centuries this was viewed as corrupt and a crime.
Today, neoliberal economists recommend it as the way to raise "productivity" and make countries
wealthier, as if it were not the road to neofeudal serfdom.
The Austrian School vs. government regulation and pro-labor policies
ED: I don't want to go too far off on a tangent because we have a lot to cover specific to your
book. But I heard an interesting story when I was doing a bit of my own research throughout the
years about the evolution of economic thought, and specifically the origins of the so-called
Austrian School of Economics – people like von Mises and von Hayek. In the early 20th
century they were essentially, as far as I could tell, creating an ideological framework in
which they could make theoretical arguments to justify exorbitant rent and make it seem almost
like a product of natural law – something akin to a phenomenon of nature.
MH: The key to the Austrian School is their hatred of labor and socialism. It saw the danger
of democratic government spreading to the Habsburg Empire, and it said, "The one thing we have
to stop is democracy. Their idea of a free market was one free of democracy and of democratic
government regulating and taxing wealthy rentiers. It was a short step to fighting in the
streets, using murder as a "persuader" for the particular kind of "free markets" they wanted
– a privatized Thatcherite deregulated kind. To the rentiers they said: "It's either our
freedom or that of labor."
Kari Polanyi-Levitt has recently written about how her father, Karl Polanyi, was confronted
with these right-wing Viennese. His doctrine was designed to rescue economics from this school,
which makes up a fake history of how economics and civilization originated.
One of the first Austrian's was Carl Menger in the 1870s. His "individualistic" theory about
the origins of money – without any role played by temples, palaces or other public
institutions – still governs Austrian economics. Just as Margaret Thatcher said, "There's
no such thing as society," the Austrians developed a picture of the economy without any
positive role for government. It was as if money were created by producers and merchants
bartering their output. This is a travesty of history. All ancient money was issued by temples
or public mints so as to guarantee standards of purity and weight. You can read Biblical and
Babylonian denunciation of merchants using false weights and measures so see why money had to
be public. The major trading areas were agora spaces in front of temples, which kept the
official weights and measures. And much exchange was between the community's families and the
public institutions.
Most important, money was brought into being not for trade (which was conducted mainly on
credit), but for paying debts. And most debts were owed to the temples and palaces for pubic
services or tribute. But to the Austrians, the idea was that anything the government does to
protect labor, consumers and society from rentiers and grabbers is deadweight overhead.
Above all, they opposed governments creating their own money, e.g. as the United States did
with its greenbacks in the Civil War. They wanted to privatize money creation in the hands of
commercial banks, so that they could receive interest on their privilege of credit creation and
also to determine the allocation of resources.
Today's neoliberals follow this Austrian tradition of viewing government as a burden,
instead of producing infrastructure free of rent extraction. As we just said in the previous
discussion, the greatest fortunes of our time have come from privatizing the public domain.
Obviously the government isn't just deadweight. But it is becoming prey to the financial
interests and the smashers and grabbers they have chosen to back.
ED: You're right, I agree 100%. You encounter this ideology even in the political
sociological realm like Joseph Schumpeter, or through the quasi-economic realm like von Hayek
in The Road to Serfdom.
MH: Its policy conclusion actually advocates neo-serfdom. Real serfdom was when families had
to pay all their income to the landlords as rent. Centuries of classical economists backed
democratic political reform of parliaments to roll back the landlords' power (and that of
bankers). But Hayek claimed that this rollback was the road to serfdom, not away from it. He
said democratic regulation and taxation of rentiers is serfdom. In reality, of course, it's the
antidote.
ED: It's the inversion you were talking about earlier. We're going to go into a break here
in a minute but before we do I want to touch on one other point that is important in the book,
again the book, Killing the Host: How Financial Parasites and Debt Bondage Destroyed the Global
Economy, available from CounterPunch – very important that people pick up this book.
MH: And from Amazon! You can get a hard copy for those who don't want to read on
computers.
Finance as the new mode of warfare
ED: Yes, and on amazon as well, thank you. This issue that I want to touch on before we go to
the break is debt. On this program a couple of months ago I had the journalist John Pilger. He
and I touched on debt specifically as a weapon, and how it is used as a weapon. You can see
this in the form of debt enslavement, if you want to call it that, in postcolonial Africa. You
see the same thing in Latin America where, Michael, I know you have a lot of experience in
Latin America in the last couple of decades. So let's talk a little bit, if we could, before we
go to the break, about debt as a weapon, because I think this is an important concept for
understanding what's happening now in Greece, and is really the framework through which we have
to understand what we would call 21st-century austerity.
MH: If you treat debt as a weapon, the basic idea is that finance is the new mode of
warfare. That's one of my chapters in the book. In the past, in order to take over a country's
land and its public domain, its basic infrastructure and its mineral resources, you had to have
a military invasion. But that's very expensive. And politically, almost no modern democracy can
afford a military invasion anymore.
So the objectives of the financial sector – of Wall Street, the City of London or
Frankfurt in Germany – is to obtain the land. You can look at what's happening in Greece.
What its creditors, the IMF and European Central Bank (ECB) want are the Greek islands, and
they want the gas rights in the Aegean Sea. They want whatever buildings and property there is,
including the museums.
Matters are not so much different in the private sector. If you can get a company or
individual into debt, you can strip away the assets they have when they can't pay. A
Hayek-style government would block society from protecting itself against such asset stripping.
Defending "property rights" of creditors, such "free market" ideology deprives the rest of the
economy – businesses, individuals and public agencies. It treats debt writedowns as the
road to serfdom, not the road away from debt dependency.
In antiquity, private individuals obtained labor services by making loans to families in
need, and obliging their servant girls, children or even wives to work off the loan in the form
of labor service. My Harvard-based archaeological group has published a series of five books
that I co-edited, most recently Labor in the
Ancient World . Creditors (often palace infrastructure managers or collectors) would get
people into bondage. When new Bronze Age rulers started their first full year on the throne, it
was customary to declare an amnesty to free bond servants and return them to their families,
and annul personal debts as well as to return whatever lands were forfeited. So in the Bronze
Age, debt serfdom and debt bondage was only temporary. The biblical Jubilee law was a literal
translation of Babylonian practice that went back two thousand years.
In America, in colonial times, sharpies (especially from Britain) would lend farmers money
that they knew the farmer couldn't pay, then they would foreclose just before the crops came
in. Right now you have corporate raiders, who are raiding whole companies by forcing them into
debt, and then smashing and grabbing. You now have the IMF, European Central Bank and
Washington Consensus taking over whole countries like Ukraine. The tactic is to purposely lend
them the money that clearly cannot be repaid, and say, "Oh you cannot pay? Well, we're not
going to take a loss. We have a solution." The solution is to sell off public enterprises, land
and natural resources. In Greece's case, 50 billion euros of its property, everything that it
has in the public sector. The country is to be sold off to foreigners (including domestic
oligarchs working out of their offshore accounts). Debt leverage is thus the way to achieve
what it took armies to win in times past.
ED: Exactly. One last point on that as well. I want to get your comment on and we see this
in post-colonial Africa, especially when the French and the British had to nominally give up
control of their colonies. You saw debt become an important tool to maintain hegemony within
their spheres of influence. Of course, asset stripping and seizing control, smashing and
grabbing was part of that. But also it is the debt servicing payments, it is the cycle of debt
repayment and taking new loans on top of original loans to service the original loans –
this process this cycle is also really an example of this debt servitude or debt bondage.
MH: That's correct, and mainstream economics denies any of this. It began with Ricardo,
who's brothers were major bankers at the time, and he himself was the major bank lobbyist in
England. Right after Greece won its independence from Turkey, the Ricardo brothers made a
rack-renting loan to Greece at far below par (that is, below the face value that Greece
committed itself to pay). Greece tried to pay over the next century, but the terms of the loan
ended up stripping and keeping it on the edge of bankruptcy well into the 20th century.
But Ricardo testified before Parliament that there could be no debt-servicing problem. Any
country, he said, could repay the debts automatically, because there is an automatic
stabilization mechanism that enables every country to be able to pay. This is the theory that
underlines Milton Friedman and the Chicago School of monetarism: the misleading idea that debt
cannot be a problem.
That's what's taught now in international trade and financial textbooks. It's false
pleading. It draws a fictitious "What If" picture of the world. When criticized, the authors of
these textbooks, like Paul Samuelson, say that it doesn't matter whether economic theory is
realistic or not. The judgment of whether an economic theory is scientific is simply whether it
is internally consistent. So you have these fictitious economists given Nobel Prizes for
promoting an inside out, upside down version of how the global economy actually works.
ED: One other thing that they no longer teach is what used to be called political economy.
The influence of the Chicago School, neoliberalism and monetarism has removed classical
political economy from academia, from the Canon if you will. Instead, as you said, it's all
about mathematics and formulas that treat economics like a natural science, when in fact it
really should be more of a historically grounded social science.
MH: The formulas that they teach don't have government in them,. If you have a theory that
everything is just an exchange, a trade, and that there isn't any government, then you have a
theory that has nothing to do with the real world. And if you assume that the environment
remains constant instead of using economics to guide public and national policy, you're using
economics for the opposite of what the classical economists did. Adam Smith, Mill, Marx, Veblen
– they all developed their economic theory to reform the world. The classical economists
were reformers. They wanted to free society from the legacy of feudalism – to get rid of
land rent, to take money creation and credit creation into the public domain. Whatever their
views, whether they were right wingers or left wingers, whether they were Christian socialists,
Ricardian socialists or Marxian socialists, all the capitalist theorists of the 19th century
called themselves socialists, because they saw capitalism as evolving into socialism.
But what you now have, since World War I, is a reaction against this, stripping away of the
idea that governments have a productive role to play. If government is not the director and
planner of the economy, then who is? It's the financial sector. It's Wall Street. So the
essence of neoliberalism that you were mentioning before, is indeed a doctrine of central
planning. It states that the central planning should be done by Wall Street, by the financial
sector.
The problem is, what is the objective of central planning by Wall Street? It's not to raise
living standards, and it's not to increase employment. It is to smash and grab. That is the
society we're in now.
A number of chapters of my book (I think five), describe how the Obama administration has
implemented this smash and grab, doing the exact opposite of what he promised voters. Obama has
implemented the Rubin-omics [Robert Rubin] doctrine of Wall Street to force America into what
looks like a chronic debt depression.
ED: Exactly right. I couldn't agree more. Let's take a short break and we'll continue the
discussion. Again, I'm chatting with Michael Hudson about his new book, Killing the Host: How
Financial Parasites and Debt Bondage Destroy the Global Economy.
The case of Latvia: Is it a success story, or a neoliberal disaster?
ED: I want to go back to some of the important issues that we introduced or alluded to in the
first part of our discussion. As I was mentioning to you off-air, a couple years ago I twice
interviewed your colleague Jeffrey Sommers, with whom you've worked and co-published a number
of papers. We talked a lot about many of the same issues that you and I are touching on.
Specifically Sommers – and I know you as well – did a lot of work in Latvia, a
country in the former Soviet space in Eastern Europe on the Baltic Sea. Your book has a whole
chapter on it, as well as references throughout the book.
So let's talk about how Latvia serves as a template for understanding the austerity model.
It is touted by technocrats of the financial elite as a major success story – how
austerity can work. I find it absurd on so many different levels. So tell us what happened in
Latvia, what the real costs were, and why neoliberals claim it as a success story.
MH: Latvia is the disaster story of the last two decades. That's why I took it as an object
lesson. You're right, it was Jeff Sommers who first brought me over to Latvia. I then became
Director of Economic Research and Professor of Economics at the Riga Graduate School of
Law.
When Latvia was given its independence when the Soviet Union broke up in 1991, a number of
former Latvians had studied at George Washington University, and they brought neoliberalism
over there – the most extreme grabitization and de-industrialization of any country I
know. Latvians, Russians and other post-Soviet countries were under the impression that U.S.
advisors would help them become modernized like the U.S. economy – with high living and
consumption standards. But what they got was advice to emulate American experience. It got
something just the opposite – how to enable foreign investors and bankers to carve it up,
dismantle its industry and become a bizarre neoliberal experiment.
You may remember the Republican presidential candidate Steve Forbes, who in 2008 proposed a
flat tax to replace progressive taxation. The idea never could have won in the United States,
but Latvia was another story. The Americans set the flat tax at an amazingly low 12 percent of
income – and no significant property tax on real estate or capital gains. It was a
financial and real estate dream, and created a classic housing and financial bubble.
Jeff and I visited the head of the tax authority, who told us that she was appointed because
she had done her PhD dissertation on Latvia's last land value assessment – which was in
1917. They hadn't increased the assessments since then, because the Soviet economy didn't have
private land ownership and didn't even have a concept of rent-of-location for planning
purposes. (Neither did Russia.)
Latvia emerged from the Soviet Union without any debt, and also with a lot of real estate
and a highly educated population. But its political insiders turned over most of the government
enterprises to themselves. Latvia had been a computer center and also the money-laundering
center of the Soviet leadership already in the late 1980s (largely as a byproduct of Russian
oil exports through Ventspils), and Riga remains the money-laundering city for today's
Russia.
Privatizing housing and other property led to soaring real estate prices. But this bubble
wasn't financed by domestic banks. The Soviet Union didn't have private banks, because the
government had simply created the credit to fund the economy as needed. The main banks in a
position to lend to Latvia were Swedish and other Scandinavian banks. They pounce on the
lending opportunities to opened up by an entire nation whose real estate had almost no tax on
it. The result was the biggest real estate bubble in the world, along with Russia's. Latvians
found that in order to buy housing of their own, they had to go deeply into debt. Assets were
only given to insiders, not to the people.
A few years ago there was a reform movement in Latvia to stop the economic bleeding. Jeff
and I brought over American property appraisers and economists. We visited the leading bank,
regulatory agencies. Latvia was going broke because its population had to pay so much for real
estate. And it was under foreign-exchange pressure because debt service on its mortgage loans
was being paid to the Swedish and foreign banks. The bank regulator told us that her problem
was that her agency's clients are the banks, not the population. So the regulators thought of
themselves as working for the banks, even though they were foreign-owned. She acknowledged that
the banks were lending much more money than property actually was worth. But her regulatory
agency had a solution: It was to have not only the buyer be obligated to pay the mortgage, but
also the parents, uncles or aunts. Get the whole family involved, so that if the first signer
couldn't pay the cosigners would be obligated.
That is how Latvia stabilized its banking system. But it did so by destabilizing the
economy. The result is that Latvia has lost 20 percent of its population over the past decade
or so. For much the same reasons that Greece has lost 20 percent of its population, with
Ireland in a similar condition. The Latvians have a joke "Will the last person who leaves in
2020 please turn off the lights at the airport."
The population is shrinking because the economy is being run by looters, domestic and
foreign. I was shown an island in the middle of the Daugava river that runs to the middle of
Latvia, and was sold for half a million dollars. Our appraisers said that it's worth half a
billion dollars, potentially. There are no plans to raise the property tax to recapture these
gains for the country – so that it can lower its heaviest labor taxes in the world,
nearly half each paycheck for income tax and "social security" spending so that finance and
real estate won't be taxed.
A few years ago, I was at the only meeting of INET (George Soros's group) that I was invited
to, and in the morning one of the lead talks was on how Latvia was a model that all countries
could follow to balance the budget. Latvia has balanced the budget by cutting back public
spending, reducing employment and lowering wage levels while indebting its population and
forcing to immigrate. The neoliberal strategy is to balance by selling off whatever remains in
the public domain. Soros funded a foundation there (like similar ones he started in other
post-Soviet countries) to get a part of the loot.
These giveaways at insider prices have created a kleptocracy obviously loyal to neoliberal
economics. I go into the details in my chapter. It's hard to talk about it without losing my
temper, so I'm trying to be reasonable but it's a country that was destroyed and smashed. That
was the U.S. neoliberal model alternative to post-Stalinism. It wasn't a new American economy.
It was a travesty.
Why then does the population continue to vote for these neoliberals? The answer is, the
neoliberals say, the alternative is Stalinism. To Latvians, this means exile, deportations and
memories of the old pro-Russian policy. The Russian-speaking parties are the main people
backers of a social democracy party. But neoliberals have merged with Latvian nationalists.
They are not only making the election over resentment against the Russian-speaking population,
but the fact that many are Jewish.
I find it amazing to see someone who is Jewish, like George Soros, allying with anti-Semitic
and even neo-Nazi movements in Latvia, Estonia, and most recently, of course, Ukraine. It's an
irony that you could not have anticipated deductively. If you had written this plot in a
futuristic novel twenty years ago, no one would have believed that politics could turn more on
national and linguistic identity politics than economic self-interest. The issue is whether you
are Latvian or are Russian-Jewish, not whether you want to untax yourself and make? Voting is
along ethnic lines, not whether Latvians really want to be forced to emigrate to find work
instead of making Latvia what it could have been: an successful economy free of debt. Everybody
could have gotten their homes free instead of giving real estate only to the kleptocrats.
The government could have taxed the land's rental value rather than letting real estate
valuation be pledged to pay banks – and foreign banks at that. It could have been a
low-cost economy with high living standards, but neoliberals turned in into a smash and grab
exercise. They now call it an idea for other nations to follow. Hence, the U.S.-Soros strategy
re Ukraine.
ED: That's an excellent point. It's a more extreme case for a number of reasons in Ukraine
– the same tendency. They talk about, "Putin and his gaggle of Jews." That's the idea,
that Putin and the Jews will come in and steal everything – while neoliberals plan to
appropriate Ukraine's land and other resources themselves. In this intersection between
economics and politics, Latvia, Lithuania, Estonia – the Baltic States of the former
Soviet Union – are really the front lines of NATO expansion. They were some of the first
and most pivotal countries brought into the NATO orbit. It is the threat of "Russian
aggression" via the enclave at Kaliningrad, or just Russia in general. That is the threat they
use to justify the NATO umbrella, and simultaneously to justify continuing these economic
policies. So in many ways Russia serves as this convenient villain on a political, military and
economic level.
MH: It's amazing how the popular press doesn't report what's going on. Primakov, who died a
few months ago, said during the last crisis a few years ago that Russia has no need to invade
Latvia, because it owns the oil export terminals and other key points. Russia has learned to
play the Western game of taking countries over financially and acquiring ownership. Russia
doesn't need to invade to control Latvia any more than America needs to invade to control Saudi
Arabia or the Near East. If it controls exports or access to markets, what motive would it have
to invade? As things stand, Russia uses Latvia it as a money laundering center.
The same logic applies to Ukraine today. The idea is that Russia is expansionary in a world
where no one can afford to be militarily expansionary. After Russia's disaster in Afghanistan,
no country in the world that's subject to democratic checks, whether it's America after the
Vietnam War or Russia or Europe, no democratic country can invade another country. All they can
do is drop bombs. This can't capture a country. For that you need major troop commitments.
In the trips that I've taken to Russia and China, they're in a purely defensive mode.
They're wondering why America is forcing all this. Why is it destroying the Near East, creating
a refugee problem and then telling Europe to clean up the mess it's created? The question is
why Europe is willing to keep doing this. Why is Europe part of NATO fighting in the Near East?
When America tells Europe, "Let's you and Russia fight over Ukraine," that puts Europe in the
first line of fire. Why would it have an interest in taking this risk, instead of trying to
build a mutual economic relationship with Russia as seemed to be developing in the 19th
century?
ED: That's the ultimate strategy that the United States has used – driving a wedge
between Russia and Europe. This is the argument that Putin and the Russians have made for a
long time. You can see tangible examples of that sort of a relationship even right now if you
look at the Nord Stream pipeline connecting Russian energy to German industrial output –
that is a tangible example of the economic relationship, that is only just beginning between
Russia and Europe. That's really what I think the United States wanted to put the brakes on, in
order to be able to maintain hegemony. The number one way it does that is through NATO.
MH: It's not only put the brakes on, it has created a new iron curtain. Two years ago,
Greece was supposed to privatize 5 billion euros of its public domain. Half of this, 2.5
billion, was to be the sale of its gas pipeline. But the largest bidder was Gazprom, and
America said, "No, you can't accept the highest bidder if its Russian." Same thing in Ukraine.
It has just been smashed economically, and the U.S. says, "No Ukrainian or Russian can buy into
the Ukrainian assets to be sold off. Only George Soros and his fellow Americans can buy into
this." This shows that the neoliberalism of free markets, of "let's everybody pay the highest
price," is only patter talk. If the winner in the rigged market is not the United States, it
sends in ISIS or Al Qaeda and the assassination teams, or backs the neo-Nazis as in
Ukraine.
So, we're in a New Cold War. Its first victims, apart from Southern Europe, will be the rest
of Europe. You can imagine how this is just beginning to tear European politics apart, with
Germany's Die Linke and similar parties making a resurgence.
The Troika and IMF doctrine of austerity and privatization
ED: I want to return us back to the book and some other key issues that you bring up that I
think are most important. One that we hear in the news all the time, and you write extensively
about it in the book, is the Troika. That's the IMF, the European Central Bank (ECB) and the
European Commission. It could be characterized as the political arm of finance capital in
Europe, one that imposes and manages austerity in the interest of the ruling class of finance
capital, as I guess we could call them. These are technocrats, not academically trained
economists primarily (maybe with a few exceptions), but I want you to talk a bit about how the
Troika functions and why it's so important in what we could call this crisis stage of
neoliberal finance capitalism.
MH: Basically, the Troika is run by Frankfurt bankers as foreclosure and collection agents.
If you read recently what former Greek finance minister Yanis Varoufakis has written, and his
advisor James Galbraith, they said that when Syriza was elected in January, they tried to
reason with the IMF. But it said that it could only do what the European Central Bank said, and
that it would approve whatever they decided to do. The European Central Bank said that its role
wasn't to negotiate democracy. Its negotiators were not economists. They were lawyers. "All we
can say is, here's what you have to pay, here's how to do it. We're not here to talk about
whether this is going to bankrupt Greece. We're just interested in in how you're going to pay
the banks what they're owe. Your electric companies and other industry will have to go to
German companies, the other infrastructure to other investors – but not from Russia."
It's much like England and France divided up the Near East after World War I. There's a kind
of a gentlemen's agreement as to how the creditor economies will divide up Greece, carving it
up much like neighboring Yugoslavia to the north.
In 2001 the IMF made a big loan to Argentina (I have a chapter on Argentina too), and it
went bad after a year. So the IMF passed a rule, called the No More Argentinas rule, stating
that the Fund was not going to participate in a loan where the government obviously can not
pay.
A decade later came the Greek crisis of 2011. The staff found that Greece could not possibly
pay a loan large enough to bail out the French, German and other creditors. So there has to be
a debt write-down of the principal. The staff said that, and the IMF's board members agreed.
But its Managing Director, Strauss-Kahn wanted to run for the presidency of France, and most of
the Greek bonds were held by French banks. French President Sarkozy said "Well you can't win
political office in France if you stiff the French banks." And German Chancellor Merkel said
that Greece had to pay the German banks. Then, to top matters, President Obama came over to the
G-20 meetings and they said that the American banks had made such big default insurance
contracts and casino gambles betting that Greece would pay, that if it didn't, if the Europeans
and IMF did not bail out Greece, then the American banks might go under. The implicit threat
was that the U.S. would make sure that Europe's financial system would be torn to pieces.
ED: And Michael, I just want to clarify, I guess it's sort of a question: about what you're
talking about here in terms of Geithner and Obama coming in: These would be credit default
swaps and collateralized debt obligations?
MH: Yes. U.S. officials said that Wall Street had made so many gambles that if the French
and German banks were not paid, they would turn to their Wall Street insurers. The Wall Street
casino would go under, bringing Europe's banking system down with it. This prompted the
European Central Bank to say that it didn't want the IMF to be a part of the Troika unless it
agreed to take a subordinate role and to support the ECB bailout. It didn't matter whether
Greece later could pay or not. In that case, creditors would smash and grab. This lead the some
of the IMF European staff to resign, most notably Susan Schadler, and later to act as whistle
blowers to write up what happened.
The same thing happened again earlier this year in Greece. Lagarde said that the IMF doesn't
do debt reduction, but would give them a little longer to pay. Not a penny, not a euro will be
written down, but the debt will be stretched out and perhaps the interest rate will be lowered
– as long as Greece permits foreigners to grab its infrastructure, land and natural
resources.
The staff once again leaked a report to the Financial Times (and maybe also the Wall Street
Journal) that said that Greece couldn't pay, there's no way it can later sell off the IMF loan
to private bondholders, so any bailout would be against the IMF's own rules. Lagarde was
embarrassed, and tried to save face by saying that Germany has to agree to stretch out the
payments on the debt – as if that somehow would enable it to pay, while its assets pass
into foreign hands, which will remit their profits back home and subject Greece to even steeper
deflation.
Then, a few weeks ago, you have the Ukraine crisis and the IMF is not allowed to make loans
to countries that cannot pay. But now the whole purpose is to make loans to countries who can't
pay, so that creditors can turn around and demand that they pay by selling off their public
domain – and implicitly, force their population to emigrate.
ED: Also, technically they're not supposed to be making loans to countries that are at war,
and they're ignoring that rule as well.
MH: That's the second violation of IMF rules. At least in the earlier Greek bailout, Strauss
Kahn got around the "No More Argentinas" rule by having a new IMF policy that if a country is
systemically important, the IMF can lend it the money even if it can't pay, even though it's
not credit-worthy, if its default would cause a problem in the global financial system (meaning
a loss by Wall Street or other bankers). But Ukraine is not systemically important. It's part
of the Russian system, not the western system. Most of its trade is with Russia.
As you just pointed out, when Lagarde made the IMF's last Ukrainian loan, she said that she
hoped its economy would stabilize instead of fighting more war in its eastern export region.
The next day, President Poroshenko said that now that it had got the loan, it could go to war
against the Donbass, the Russian speaking region. Some $1.5 billion of the IMF loan was given
to banks run by Kolomoisky, one of the kleptocrats who fields his own army. His banks send the
IMF's gift abroad to his own foreign banks, using his domestic Ukrainian money to pay his own
army, allied with Ukrainian nationalists flying the old Nazi SS insignia fighting against the
Russian speakers. So in effect, the IMF is serving as an am of the U.S. military and State
Department, just as the World Bank has long been.
ED: I want to interject two points here for listeners who haven't followed it as closely.
Number one is the private army that you're talking about – the Right Sector which is
essentially a mercenary force of Nazis in the employ of Kolomoisky. They're also part of what's
now called the Ukrainian National Guard. This paramilitary organization that is being paid
directly by Kolomoisky. Number two – and this relates back to something that you were
saying earlier, Michael – that IMF loan went to pay for a lot of the military equipment
that Kiev has now used to obliterate the economic and industrial infrastructure of Donbass,
which was Ukraine's industrial heartland. So from the western perspective it's killing two
birds with one stone. If they can't strip the assets and capitalize on them, at least they can
destroy them, because the number one customer was Russia.
MH: Russia had made much of its military hardware in Ukraine, including its liftoff engines
for satellites. The West doesn't want that to continue. What it wants for its own investors is
Ukraine's land, the gas rights in the Black Sea, electric and other public utilities, because
these are the major tollbooths to extract economic rent from the economy. Basically, US/NATO
strategists want to make sure, by destroying Ukraine's eastern export industry, that Ukraine
will be chronically bankrupt and will have to settle its balance-of-payments deficit by selling
off its private domain to American, German and other foreign buyers.
ED: Yes, that's Monsanto, and that's Hunter Biden on the Burisma board (the gas company).
It's like you said earlier, you wouldn't even believe it if someone would have made it up. It's
so transparent, what they're doing in Ukraine.
Financialization of pension plans and retirement savings
I want to switch gears a bit in the short time we have remaining, because I have two more
things I want to talk about. Referring back to this parasitical relationship on the real
economy, one aspect that's rarely mentioned is the way in which many regular working people get
swindled. One example that comes to my mind is the mutual funds and other money managers that
control what pension funds and lots of retirees invest in. Much of their savings are tied up in
heavily leveraged junk bonds and in places like Greece, but also recently in Puerto Rico which
is going through a very similar scenario right now. So in many ways, US taxpayers and
pensioners are funding the looting and exploitation of these countries and they're then
financially invested in continuing the destruction of these countries. It's almost like these
pensioners are human shields for Wall Street.
MH: This actually is the main theme of my book – financialization. Mutual funds are
not pension funds. They're different. But half a century ago a new term was coined: pension
fund capitalism, sometimes called pension fund socialism. Then we got back to Orwellian
doublethink when Pinochet came to power behind the natural alliance of the Chicago School with
Kissinger at the State Department. They immediately organized what they called labor
capitalism. n labor capitalism labor is the victim, not the beneficiary. The first thing they
did was compulsory setting aside of wages in the form of ostensible pension funds controlled by
the employers. The employers could do whatever they wanted with it. Ultimately they invested
their corporate pension funds in their own stocks or turned them over to the banks, around
which their grupo conglomerates were organized. They then simply drove the businesses with
employee pension funds under, wiping out the pension fund liabilities – after moving the
assets into their captive banks. Businesses were left as empty corporate shells.
Something similar happened in America a few years ago with the Chicago Tribune. Real estate
developer Sam Zell borrowed money, bought the Tribune, using the Employee Stock Ownership Plan
(ESOP) essentially to pay off the bondholders. He then drove/looted the Tribune into bankruptcy
and wiped out the stockholders. Employees brought a fraudulent conveyance suit.
Already fifty years ago, critics noted that about half of the ESOPs are wiped out, because
they're invested by the employers, often in their own stock. Managers give themselves stock
options, which are given value by employee purchases. Something similar occurs with pension
funds in general. Employee wages are paid into pension funds, which bid up the stock prices in
general. On an economy-wide basis, employees are buying the stock that managers give
themselves. That's pension fund capitalism.
The underlying problem with this kind of financialization of pensions and retirement savings
is that modern American industry is being run basically for financial purposes, not for
industrial purposes. The major industrial firms have been financialized. For many years General
Motors made most of its profits from its financial arm, General Motors Acceptance Corporation.
Likewise General Electric. When I was going to school 50 years ago, Macy's made most of its
money not by selling products, but by getting customers to use its credit cards. In effect, it
used its store to get people to use its credit cards.
Last year, 92% of the earnings of the Fortune 100 companies were used for stock buy-backs --
corporations buying back their stock to support its price – or for dividend payouts, also
to increase the stock's price (and thus management bonuses and stock options). The purpose of
running a company in today's financialized world is to increase the price of the stock, not to
expand the business. And who do they sell the stock to? Essentially, pension funds.
There's a lot of money coming in. I don't know if you remember, but George W. Bush wanted to
privatize Social Security. The idea was to spend all of its contributions – the 15+% that
FICA withholds from workers paychecks every month – into the stock market. This would
fuel a giant stock market boom. Money management companies, the big banks, would get an
enormous flow of commissions, and speculators would get rich off the inflow. It would make
billionaires into hundred-billionaires. All this would soar like the South Sea Bubble, until
the American population began to age – or, more likely, begin to be unemployed. At that
point the funds would begin to sell the stocks to pay retirees. This would withdraw money from
the stock market. Prices would crash as speculators and insiders sold out, wiping out the
savings that workers had put into the scheme.
The basic idea is that when Wall Street plays finance, the casino wins. When employees and
pension funds play the financial game, they lose and the casino wins.
ED: Right, and just as an example for listeners – to make what Michael was just
talking about it even more real – if we think back to 2009 and the collapse of General
Motors, it was not General Motors automotive manufacturing that was collapsing. It was GMAC,
their finance arm, which was leveraged on credit default swaps, collateralized debt obligations
and similar financial derivatives – what they call exotic instruments. So when Obama
comes in and claimed that he "saved General Motors," it wasn't really that. He came in for the
Wall Street arm of General Motors.
Obama's demagogic role as Wall Street shill for the Rubinomics gang
MH: That's correct. He was the Wall Street candidate, promoted by Robert Rubin, who was
Clinton's Treasury Secretary. Basically, American economic policies can run by a combination of
Goldman Sachs and Citigroup, often interchangeably.
ED: This was demonstrated very clearly in the first days of Obama taking office. Who does he
meet with to talk about the financial crisis? He invites the CEOs of Goldman Sachs and JP
Morgan, Bank of America, Citi and all of the rest of them. They're the ones who come to the
White House. It's been written about in books, in the New Yorker and elsewhere. Obama basically
says, "Don't worry guys, I got this."
MH: Ron Suskind wrote this. He said that Obama said, "I'm the only guy standing between you
and the pitchforks. Listen to me: I can basically fool them." (I give the actual quote in my
book.) The interesting thing is that the signs of this meeting were all erased from the White
House website, but Suskind has it in his book. Obama emerges as one of the great demagogues of
the century. He may be even worse than Andrew Jackson.
ED: So much of it is based on obvious policies and his actions. The moment he came to power
was a critical moment when action was needed. Not only did he not take the right action, he did
exactly what Wall Street wanted. In many ways we can look back to 2008 when he was championing
the TARP, the bailout, and all the rest of that. None of that would have been possible without
Obama. That's something that Democrats like to avoid in their conversations.
MH: That's exactly the point. It was Orwellian rhetoric. He ran as the candidate of Hope and
Change, but his real role was to smash hope and prevent change. By keeping the debts in place
instead of writing them down as he had promised, he oversaw the wrecking of the American
economy.
He had done something similar in Chicago, when he worked as a community organizer for the
big real estate interests to tear up the poorer neighborhoods where the lower income Blacks
lived. His role was to gentrify them and jack up property prices to move in higher-income
Blacks. This made billions for the Pritzker family. So Penny Pritzker introduced him to Robert
Rubin. Obama evidently promised to let Rubin appoint his cabinet, so they appointed the vicious
anti-labor Rahm Emanuel, now Chicago's mayor, as his Chief of Staff to drive any Democrat to
the left of Herbert Hoover out of the party. Obama essentially pushed the Democrats to the
right, as the Republicans gave him plenty of room to move rightward and still be the "lesser
evil."
So now you have people like Donald Trump saying that he's for what Dennis Kucinich was for:
a single payer healthcare program. Obama fought against this, and backed the lobbyists of the
pharmaceutical and health insurance sectors. His genius is being able to make most voters
believe that he's on their side when he's actually defending the Wall Street special interests
that were his major campaign contributors.
ED: That's true. You can see that in literally every arena in which Obama has taken action.
From championing so-called Obamacare, which is really a boon for the insurance industry, to the
charter schools to privatize public education and also become a major boon for Wall Street, for
Pearson and all these major education corporations. In terms of real estate, in the
gentrification, all the rest. Literally every perspective, every angle from which you look at
Obama, he is a servant of finance capital of investors, not of the people. And that's what the
Democratic Party has become, delivering its constituency to Wall Street.
A left-wing economic alternative
MH: So here's the problem: How do we get the left to realize this? How do we get it to talk
about economics instead of ethnic identity and sexual identity and culture alone? How do we get
the left to do what they were talking about a century ago – economic reform and how to
take the side of labor, consumers and debtors? How do we tell the Blacks that it's more
important to get a well paying job? That's the way to gain power. I think Deng said: "Black
cat, white cat, it doesn't matter as long as it catches mice." How do we say "Black president,
white president, it doesn't matter, as long as they give jobs for us and help our community
economically?"
ED: I think that's important and I want to close with this issue: solutions. One of the
things I appreciate in reading your book is that it is broken up into sections. The final
section, I think, is really important. You titled it: "There Is An Alternative." That is of
course a reference to Margaret Thatcher's TINA (There Is No Alternative). That ideology and
mindset took over the left, or at least the nominally left-wing parties. So you're saying that
there is an alternative. In that section you propose a number of important reforms. You argue
that they would restore industrial prosperity. Now, I'm not asking you to name all of them, to
run down the list, but maybe touch on a little bit of what you included, and why that's
important for beginning to build this alternative.
MH: There are two main aims that classical economists had 200 years ago. One was to free
society from debt. You didn't want people to have to spend their lives working off the debt,
whether for a home, for living or to get an education. Second, you wanted to fund industry, not
by debt but by equity. That is what the Saint-Simonians and France did. It's what German
banking was famous for before World War I. There was a debate in the English speaking
countries, especially in England saying that maybe England and the Allies might lose World War
I because the banks are running everything, and finance should be subordinated to fund
industry. It can be used to help the economy grow, not be parasitic.
But instead, our tax laws make debt service tax deductible. If a company pays $2 billion a
year in dividends, a corporate raider can buy it on credit and, if there's a 50% stock rate, he
can pay $4 billion to bondholders instead of $2 billion to stockholders. Over the past twenty
years the American stock market has become a vehicle for corporate raiding, replacing equity
with debt. That makes break-even costs much higher.
The other point I'm making concerns economic rent. The guiding idea of an economic and tax
system should be to lower the cost of living and doing business. I show what the average
American wage earner has to pay. Under the most recent federal housing authority laws, the
government guarantees mortgage loans that absorb up to 43% of family income. Suppose you pay
this 43% of income for your home mortgage, after the 15% of your wages set aside for Social
Security under FICA.
Instead of funding Social Security out of the general budget and hence out of what is still
progressive taxation, Congress has said that the rich shouldn't pay for Social Security; only
blue-collar workers should pay. So if you make over $115,000, you don't have to pay anything.
In addition to that 15% wage tax, about 20% ends up being paid for other taxes – sales
taxes, income taxes, and various other taxes that fall on consumers. And perhaps another 10%
goes for bank loans besides mortgages – credit card loans, student loans and other
debts.
That leaves only about 25% of what American families earn to be spent on goods and services
– unless they borrow to maintain their living standards. This means that if you would
give wage earners all of their food, all their transportation, all their clothing for nothing,
they still could not compete with foreign economies, because so much of the budget has to go
for finance, insurance and real estate (FIRE). That's why our employment is not going to
recover. That's why our living standards are not going to recover.
Even if wages do go up for some workers, they're going to have to pay it to the bank for
education loans, mortgage loans (or rent), bank debt and credit card debt, and now also for our
amazingly expensive and rent-extracting medical insurance and health care and medications. The
result is that if they try to join the middle class by getting higher education and buying a
home, they will spend the rest of their lives paying the banks. They don't end up keeping their
higher wages. They pay them to the banks.
ED: You don't have to tell me. I'm living that reality. Interestingly, in that final section
of your book you talk about alternatives, like a public banking option that many people have
discussed. You talk about the Social Security cap that you were just mentioning, and focus on
taxing economic rent. Some critics would suggest that these sorts of reforms are not going to
be able to salvage the capitalist model that is so ensconced in the United States. So I want to
give you a chance to sort of present that argument or maybe rebut it.
MH: I won't rebut that criticism, because it's right. Marx thought that it was the task of
industrial capitalism to free economies from the economic legacies of feudalism. He saw that
the bourgeois parties wanted to get rid of the "excrescences" of the industrial capitalist
marketplace. They wanted to get rid of the parasites, the landowners and usurious creditors.
Marx said that even if you get rid of the parasites, even if you socialize finance and land
that he dealt with in volume II and III of Capital, you're still going to have the Volume I
problem. You're still going to have the exploitation problem between employers and employees
– the labor/capital problem.
My point is that most academic Marxists and the left in general have focused so much on the
fight of workers and labor unions against employers that they tend to overlook that there's
this huge FIRE sector – Finance, Insurance, and Real Estate – tsunami is swamping
the economy. Finance is wrecking industry and government, along with labor. The reforms that
Marx expected the bourgeois parties to enact against rentiers haven't occurred. Marx was overly
optimistic about the role of industrial capitalism and industrialized banking to prepare the
ground for socialism.
This means that until you complete the task of freeing of society from feudalism –
corrosive banking and economic rent as unearned income – you can't solve the industrial
problems that Marx dealt with in Volume I. And of course even when you do solve them, these
problems of labor exploitation and markets will still exist.
ED: Yes, absolutely. Well we're out of time. I want to thank you for coming onto the
program. Listeners, you heard it. There's so much information to digest here. The book is
really brilliant, I think essential reading, required reading – Killing the Host: How
Financial Parasites and Debt Bondage Destroy the Global Economy, available through
CounterPunch, as well as on Amazon. Michael Hudson professor of economics at University of
Missouri Kansas City, his work is all over the place. Find it regularly on CounterPunch, as
well as on his website michael-hudson.com. Michael Hudson thanks so much for coming on
CounterPunch Radio.
MH: It's great to be here. It's been a wonderful discussion.
The key point is that financial industry needs to be strictly regulated and suppressed, because after a cirtain point it stage
coup d'état, banksters come to power and turn the industry into cancer for the society with it uncontrolled parasitic growth.
Notable quotes:
"... In economics, the financial sector is typically lumped in with the insurance sector and real estate (the financial portion of the real estate sector, not construction) sector. Together, the sectors are often abbreviated and called the FIRE sector. In this article I will talk mainly about the finance portion of the FIRE sector since it is by far the largest, most visible, and most corrupt. ..."
"... The job of the finance sector is simply to manage existing resources . It creates nothing. Therefore, the smaller the financial sector is the more real wealth there is for the rest of society to enjoy. The bigger the financial sector becomes the more money it siphons off from the productive sectors. ..."
"... Neither of these two friendly fellows actually does much, if anything, in the way of actual investing. Sure, they learn the lingo, dress sharply, and probably know more than the average Joe, but they don't call the shots. That happens at Big Bank HQ. ..."
"... Somewhere in the belly of the beast there is a gaggle of highly paid, largely worthless economists and market technicians. Using some combination of tea leaves, voodoo, crystal balls, and tarot cards, these guys come up with the selection of one-size-fits-most, happy-meal portfolios that clients will be invested in. Actually, scratch that. Portfolios aren't assembled using all kinds of mystical methods; they are assembled using cold hard cash. (It's the finance sector. Did you think they spoke a language other than green?) See, various mutual fund companies pay marketing fees and other dubiously legal payments to the advisory firms to get them to sell their funds. In 2010, mutual fund companies paid $3.5B in perfectly legal "pay to play" schemes to get their funds featured in various investment lineups. ..."
"... One significant source of profit for the financial sector has been exploiting public, taxpayer-owned infrastructure. It should be blatantly obvious that these deals are bad for citizens, as the fees charged to citizens for use of the asset must not only cover servicing costs and maintenance capital expenditures but must also generate profit for the firms buying the assets. ..."
"... As the financial sector funnels more and more resources into lobbying and bribes (let's face it, campaign contributions are nothing more than legal bribery), it has been able to strip an ever-greater amount of state-owned assets from the public. Public asset strip mining is one of the chief causes of the increasing profitability of the financial sector. ..."
Before I begin this article want to make the point that what I'm about to say doesn't apply to everyone in the industry. While
the average mutual fund, broker, wealth manager, and hedge fund charges high fees and delivers poor results it doesn't apply to everyone.
I know lots of good, honest hedge fund managers that charge reasonable fees. I know lots of wealth managers that act in their client's
best interest and don't gouge them on fees. Unfortunately these are the exceptions rather than the rule.
Over the past year or so, the issue of rising income inequality in the United States (and even worldwide) has come front and center.
Most of what I've read has focused on wages, union membership, unemployment, taxation, government subsidy, and executive pay issues.
There is one issue whose role I think is overlooked in the mainstream media: the role the financial sector plays in exacerbating
income inequality. In fact, I believe the financial sector is one of the prime causes, and at its current point is perhaps the greatest
parasite in human history. It is sucking wealth from the productive sectors of the economy at an unprecedented rate.
Before we go any further, I want to define the term "income inequality." When I use that term, I am referring to the fact that,
on average, the incomes and standard of living of American workers is not keeping pace with productivity. I'm also using the term,
in part, to explain why workers and executives in some parts of the economy are overpaid in relation to the benefits they provide.
What I am not doing is making a blanket statement that money should be taken away from successful, hardworking people and
given or "redistributed" to the lazy.
The Role of the Financial Sector
In economics, the financial sector is typically lumped in with the insurance sector and real estate (the financial portion
of the real estate sector, not construction) sector. Together, the sectors are often abbreviated and called the FIRE sector.
In this article I will talk mainly about the finance portion of the FIRE sector since it is by far the largest, most visible, and
most corrupt.
The problem is that the financial, insurance, and real estate (FIRE) sectors do not actually produce any goods or services. If
you go on Google Finance you'll see it divides the economy into ten sectors: energy, basic materials, industrials, cyclical consumer
goods, non-cyclical consumer goods, financials, healthcare, technology, telecommunications, and utilities.
The nine nonfinancial sectors all produce goods or services. For example, the energy sector companies drill for our oil and refine
it into gasoline (e.g., ExxonMobil); the basic materials sector mines our iron (BHP Billiton) and refines it into steel (Nucor);
the industrial sector produces the mining equipment (Caterpillar) used by the previously mentioned sectors; the cyclical consumer
goods sector produces our cars (Ford) or sells our everyday items (Wal-Mart); the non-cyclical consumer goods sector sells the things
we need no matter what, such as groceries (Safeway); the healthcare sector provides the medicines that heal us (Johnson & Johnson);
the technology sector gives us the computers and software we use (Apple); the telecommunications sector gives us the ability to communicate
(Verizon); and the utility sector gives us the power to run our homes and businesses (Duke Energy).
The financial sector? Well, according to Harvard professor Greg Mankiw, chief academic apologist for the financial sector, this
is what it's supposed to do:
Those who work in banking, venture capital, and other financial firms are in charge of allocating the economy's investment resources.
They decide, in a decentralized and competitive way, which companies and industries will shrink and which will grow.
The job of the finance sector is simply to manage existing resources . It creates nothing. Therefore, the smaller
the financial sector is the more real wealth there is for the rest of society to enjoy. The bigger the financial sector becomes the
more money it siphons off from the productive sectors.
The graph below shows how the financial sector has grown since 1960. The figures are shown as a percentage of investment (using
both gross and net investment).
Graphic source: Jacobin Magazine
As you can see, the financial sector has almost doubled or tripled in size since 1960. That means it is extracting double or triple
the amount of money from the real economy!
Just how much?
I want to go through several areas of the economy to show you how the financial sector is extracting money and offering no benefit.
The Grift in Your Retirement Plan
I want to start with the industry I work in, wealth management. When I started my business, I was cognizant of how investors were
ill served by the traditional model of wealth management and vowed to run my business differently. Unfortunately, a vast majority
of the financial industry has built an unrivaled apparatus for extracting huge sums of money from retirees and mom-and-pop investors.
Say, you're sitting on your couch, watching TV and thinking about retirement. You just got part of your inheritance and think
investing it for the future would be a sensible idea. Imagine you haven't the slightest idea how to get started. Then a commercial
comes on with Tommy Lee Jones telling you how trustworthy Ameriprise is. Maybe you hear the reassuring voice of John Houseman pitching
Smith Barney, or you might see the iconic bull charging across the desert for Merrill Lynch.
Say you decide to go down to your local brokerage and meet with a financial advisor. His (or her) pitch sounds good, so you decide
to become a client.
The first problem is the guy you met. Remember how he told you he has his finger on the pulse of the market, he has access to
the best investment research, he is always taking continuing education classes, and he is always monitoring your portfolio? He isn't.
He could be a complete moron. He got hired (and survived and thrived) because he is a good salesman. Nothing less and nothing more.
He takes his orders on what to sell from the top -- the gaggle of people with their fingers in your retirement pie, helping themselves
to regular bites.
The first person behind the scenes telling our hapless salesman what to do is some sort of office, district, or regional manager.
This is manager is just like the salesman but with more ambition. Almost all of these guys were promoted from sales, and their job
is do an impersonation of Alec Baldwin from Glengarry Glen Ross, yelling at the underperformers ("Coffee is for closers!") to get
out there and sell the turd of the month. ("XYZ Mutual Fund Company just paid our firm $200M," this manager says, "so get out there
and sell their funds! And, Jones, if you don't gross $20,000 by the end of this month you're fired! Meeting adjourned.")
Neither of these two friendly fellows actually does much, if anything, in the way of actual investing. Sure, they learn the
lingo, dress sharply, and probably know more than the average Joe, but they don't call the shots. That happens at Big Bank HQ.
Somewhere in the belly of the beast there is a gaggle of highly paid, largely worthless economists and market technicians.
Using some combination of tea leaves, voodoo, crystal balls, and tarot cards, these guys come up with the selection of one-size-fits-most,
happy-meal portfolios that clients will be invested in. Actually, scratch that. Portfolios aren't assembled using all kinds of mystical
methods; they are assembled using cold hard cash. (It's the finance sector. Did you think they spoke a language other than green?)
See, various mutual fund companies pay marketing fees and other dubiously legal payments to the advisory firms to get them to sell
their funds. In 2010, mutual fund companies
paid $3.5B in perfectly legal "pay to play" schemes to get their funds featured in various investment lineups.
You, the investor, are usually charged somewhere around 1% to 1.5% of assets annually for this "service." I've seen clients charged
as much as 1.65% and I've come across firms advertising fees as high as 2% per year for clients with small account balances. For
large portfolios (typically $1M or more) the fees start going down and I've seen rates as low as .5% or less. These fees are split
up between your advisor, the district manager, and the firm itself. Keep in mind that these are fees before any investments have
been made!
So who actually makes the investments in stocks and bonds? It's the portfolio managers at the mutual fund companies. According
to the Investment Company Institute 2011 Fact Book (the ICI is a pro-mutual fund organization), the average mutual fund in
2010 charged 1.47% of assets annually. That's in addition to an average up-front sales charge of 1%.
Why so expensive? Well, the funds are towing a lot of dead weight. According to the ICI 2013 Fact Book, only 42% of mutual
fund employees were employed in fund management positions or fund administrative positions. The rest, 58%, were employed in either
investor servicing (34%) or sales and distribution (24%) job functions.
Like any good infomercial says, "But wait! There's more!" When you buy a stock or bond, you can't just go grab it off the shelf
like you are shopping at Wal-Mart. You need to go through a brokerage. A 1999 study by Chalmers, Edelen, and Kadlec found that the
average mutual fund incurs trading expenses of .78% per annum. A newer study in 2004 by Karceski, Livingston, and O'Neal found brokerage
commissions cost funds around .38% per annum, or .58% if you account for the effect trading large blocks of stock has on the bid-ask
spread.
But wait! There's more! Mutual funds and your average retail investor are relatively unsophisticated, so a new industry has popped
up to take advantage of them. It's called "high frequency trading" or HFT for short. These are powerful computers programmed to take
advantage of "dumb" traders in the market. These HFT firms place their computers physically next to the stock exchange computers
in the datacenters and buy access to market quotes milliseconds before they are made public. They use these and other advantages
to skim
profits from other legitimate investors (that is, people buying stocks because they want to own part of the underlying company).
All told, it's not uncommon to see investors incurring annual expenses of 2%, all the way up to 4% per year.
Institutions and the Rich Have the Same Problem
The problem isn't just limited to Joe Six-pack Retiree. Large institutional investors, such as pension funds, and "sophisticated"
rich investors get taken to the cleaners too.
Once upon a time someone came up with a great idea: Since an all-stock portfolio is volatile, why not "hedge" the portfolio and
sell some stocks short? If you bet that good stocks will go up (buying stocks in the good companies or going long) and bad stocks
will go down (selling the stock short) then you could limit volatility and maybe make some extra money. (You'd make money both when
the good stocks went up and the bad stocks went down). It was and is a pretty good idea when done correctly. Unfortunately, the term
"hedge fund," like the term "mutual fund," has lost its original meaning. The term hedge fund is now used to refer to any type of
pooled investment vehicle that is limited to select clients (usually rich, sophisticated investors and institutions, although the
rules vary worldwide).
The rule of thumb is that hedge funds charge a 2% per year management fee and keep 20% of all profits, the proverbial "2 and 20"
compensation. According to a
WSJ article , this
old adage isn't too far off; the average hedge fund charges 1.6% per year and keeps 18% of profits.
In 2012, hedge funds removed $50.5B from their investors' pockets. In fact, according to an article in Jacobin Magazine, the top
25 hedge fund managers make more money than the CEOs of all S&P 500 companies combined. Combined!
Have they earned it? Well, the answer seems to be no. I pulled the last four years of return data for two hedge fund indices:
the Barclays Hedge Fund Index and the Credit Suisse AllHedge Index. These two indices track thousands of hedge funds across the globe.
I compared them with the returns of the Vanguard Total World Stock Index Fund and the Vanguard Total World Bond Market Index Fund
as well as a 50/50 portfolio of the two Vanguard Funds. All returns shown are net of fees.
The Vanguard stock fund trounced both hedge fund indices, and the Credit Suisse index managed only to beat the returns of bonds
by .01%.
Right about now you will hear the howls of the "hedgies" complaining. I wasn't quite fair to the hedge funds. A lot, but not all,
of them are hedged so returns in down markets will be better and four years isn't a terribly long time to look at.
The two graphs below show the returns for the Credit Suisse index since 2004 and the maximum drawdowns (losses) since 2004.
First, over 10 years the returns for hedge funds are atrocious, only about 25% in total. They do have a point that the draw downs
are lower. The maximum losses experienced during the downturn only averaged about 25%. Fine, but the Vanguard Total Bond Market Index
had barely any draw downs during the crisis and returned over 50% during a similar time period.
Unfortunately, Vanguard does not have return data for any of its World Stock funds for a complete 2008 calendar year so I was
unable to get exact data for my 50/50 portfolio. But I'd be willing to bet it beats the hedge fund indices on a risk adjusted basis.
When you hear about underfunded pension plans, part of the blame lies with pension investment committees and their investments
in hedge funds. These funds, in aggregate, have not earned the fees they charge and have instead funneled the money of retirees into
the hands of a wealthy few.
I'm not alone in reaching this conclusion. Pension funds are slowly starting to see the light and
reducing their allocations to "alternative" investments, such as hedge funds, and
reallocating the capital to indexed products or negotiating with the funds for lower fees.
It's not just the traditional investment arena where the financial sector has run wild. Its unending quest for siphoning money
from the economy has spilled out into other areas.
Speculation in Commodities Costs Main Street Billions
Speculation by the financial sector in the commodities market is impacting the entire world. The passage of the Commodities Futures
Modernization Act (CFMA) has allowed big banks to engage in almost limitless speculation in the commodities market. Wall Street has
convinced everyone from individual investors to pension funds and endowments that they need to include commodities in their portfolios
for deworsification, I mean, diversification purposes. Between investors plowing more than $350B into the commodities market and
what appears to be outright manipulation of commodities prices, the financial sector has increased the costs of everything from wheat
to heating oil and aluminum to gasoline.
An executive for MillerCoors testified that manipulation of the aluminum market cost manufacturers over $3B. The World Bank estimated
that in 2010, 44 million people worldwide were pushed into poverty because of high food prices. The chief cause?
More than 100 studies
agree the cause is speculation in the commodities market. (Goldman Sachs made
$440M in 2012
from food market speculation.) For Americans who love their cars (and SUVs), the biggest impact might be felt at the gas pump where
experts estimate
that financial speculation has added anywhere from $1 to $1.50 to gas prices.
For more information on speculation in the commodities, I recommend Matt Taibbi's
excellent pieces, in-depth information at Better Markets , or some
of myarticles on commodities.
If you think it's bad enough that Wall Street is raising the price of your food, heating oil, gasoline, and Pepsi, then wait until
you get a load of one of the Street's other ingenious ideas for helping themselves to more of your money.
Corruption of Public Infrastructure
One significant source of profit for the financial sector has been exploiting public, taxpayer-owned infrastructure. It should
be blatantly obvious that these deals are bad for citizens, as the fees charged to citizens for use of the asset must not only cover
servicing costs and maintenance capital expenditures but must also generate profit for the firms buying the assets.
The first and most obvious examples of this type of fraud (I choose to use the term "fraud" because I believe that is exactly
what these deals are) are government entities selling public, taxpayer-owned infrastructure, such as road, bridges, parking facilities,
and ports, to the private sector so that they can extract rent from the users. The deals are usually touted as saving taxpayers money
and letting the "more efficient" private sector better manage the asset. This is false. Many studies show private ownership of public
goods does not lead to any cost savings. A comprehensive econometric
study done in 2010 of all available public vs. private studies by Germa Bel, Xavier Fageda, Mildred E. Warner at the University
of Barcelona found no cost saving in privatizing public water or solid waste management services and infrastructure.
The case is no different when it comes to public roads. A
2007 paper by US PIRG found that
privatizing roads never benefits citizens. Financial firms were typically able to buy the assets on the cheap and then raise toll
rates while usually sneaking language into the agreements that prevented governments from building competing infrastructure. The
paper presented evidence that the Indiana Toll Road lease will cost taxpayers at least $7.5B.
One of the most egregious examples of the financial sector extracting rent is the
2009 sale of Chicago's parking meters
to a consortium led by Morgan Stanley. Shortly after the lease was finalized, rates at many parking meters increased (in some case
by quadruple the amount). The Chicago Inspector General found that the city was underpaid by almost $1B for the lease. Meanwhile,
in 2010 Morgan Stanley banked $58 million in profits from the parking meters. With
no way
out of the deal , the citizens of Chicago are now paying Morgan Stanley for the right to use assets they used to own!
The second way in which taxpayers are exploited by the financial sector is so-called public-private partnerships (also referred
to as PPP or P 3 ). There is no set definition for what constitutes a PPP arrangement, and it is possible some might be
beneficial in limited circumstances. I want to focus on one specific type of PPP that enriches the financial sector: when public
projects are privately financed. There is absolutely no reason for any government project to ever require paying "rent" to the financial
sector in the form of financing.
The United States federal government is the monopoly supplier of US dollars. It can add them to the economy at will through deficit
spending or remove them via taxation. There is no earthly reason for a public entity to be forced to depend on the private sector
to provide any type of financing. The only constraint on whether or not money should be spent is whether the economy is at full capacity
(full employment and full industrial capacity utilization) where the additional deficit spending may cause inflation.
State and local governments are unable to issue currency and therefore must depend on revenue raised via taxation, distributions
from the federal government, or money raised through bond issuance. Even then, studies have shown that PPPs are more expensive compared
to the state or local entity securing financing through the municipal bond market.
As the financial sector funnels more and more resources into lobbying and bribes (let's face it, campaign contributions are
nothing more than legal bribery), it has been able to strip an ever-greater amount of state-owned assets from the public. Public
asset strip mining is one of the chief causes of the increasing profitability of the financial sector.
So far we've dealt with examples that are pretty easy to see. Everyone who owns a car knows that gas prices have been rising too
fast and food is more expensive. The citizens of Chicago know they are getting shafted on the parking meter deal since parking rates
have quadrupled. But there are hidden areas of the economy where the financial sector is ripping off the public too.
Interest Rate Manipulation
Do you know what LIBOR is? And what it's used for? A lot of financial types read my newsletters, so I'm sure some of you do. But
the average man or woman on the street likely does not.
LIBOR stands for London Interbank Offered Rate and is the average interest rate banks in London estimate that they would be charged
if they borrowed from other banks. This rate is used worldwide by mortgage lenders, credit card agencies, banks, and other financial
institutions to set interest rates. By some estimates, more than $350T in financial products, derivatives, and contracts are tied
to LIBOR.
In 2012, it was discovered that, since 1991, banks were falsely inflating or deflating the interest rates they reported. (Remember
banks essentially make up their own interest rates and report them with the results being essentially averaged and reported as LIBOR.)
The banks did this in order to profit from trades or to make themselves look more creditworthy than they were.
The Macquarie Group estimated that the
manipulation of LIBOR cost investors $176B. (Keep in mind this is an estimate coming from a financial firm, so it would be prudent
to assume it's on the low end.)
Andrew Lo, a finance professor at MIT, said the fraud "dwarfs by orders of magnitude any financial scam in the history of the
markets."
Food Stamps (SNAP) and Welfare (TANF)
I highly doubt any of my clients or readers are beneficiaries of the SNAP or "food stamps" program and are probably not very familiar
with it. While it is nominally a government program it has been corrupted by the big banks. Benefits are provided electronically
via debit cards (EBT cards). JP Morgan
has made over $500M
from 2004 to 2012 providing EBT benefits to 18 states. The banks then are free to reap fees from users for such things as cash
withdraws for TANF benefits, out of network ATM fees, lost card replacement fees, and even customer service calls.
I believe you can judge how profitable a service is to a company how much it spends on lobbying. In the case of JPMorgan, its
bribes, I mean campaign contributions to Agriculture Committee (SNAP is part of the Department of Agriculture) members increased
sharply after it entered the EBT market in 2004.
(Graphic source: GAI via data from CRP) Summary
A bloated and out-of-control financial sector does not add any value to society. Society benefits when the financial sector is
kept as small as possible.
The financial sector is a parasite that depends on its host organism, the productive sector of the economy, to fuel its profits.
The larger the financial sector grows, the more wealth it extracts from the productive sectors of the economy. With all due respect
to Matt Taibbi, Goldman Sachs isn't a vampire squid; the entire financial sector is the vampire squid with its tentacles reaching
into the pockets of citizens everywhere and sucking out money.
Quite a damning critique, and if I may step away from the main point I have to ask: why is it that some guys involved with
finance, Strubel as well as Auerback, Mosler and Ritholtz, talk like this while so many in the field do not? Does everyone involved
"know" all this but most simply choose to put on blinders?
Great Article about the .01% "Taker Class". This can all end by the 99% demanding a change to the TAX CODE! Yet another clear
indication of the manipulation of the "Giver Class" by government!
Its truly frightening to see how the public has been blindsided/mislead about the root causes of rapid income inequality. As
a social worker I am somwhat familiar with the SNAP benefit program Depressing to think JP Morgan Chase skimmed at least 500m
over an eight year period for SNAP and welfare benefits. I suppose this is the new age enclosure movement where Wall Street is
picking up public assets for pennies on the dollar and charging enormous rents..
The questions is.. what happens when it is used up?? A scorched wasteland of dysfunctional infrastruture/gated communites housing
a tiny elite protected from beggars, street criminals, and gang bandits??
Excellent article. Easy for a layperson to understand and covers a good portion of the pervasive, ongoing, worldwide financial
system theft. I worked for a stock brokerage firm years ago while studying for the series 7. Once I figured out they were all
just well-dressed telemarketers, I quit and found a more productive job. Remember 'dogs of the Dow' ?
A very well-written and eye-opening post – thanks, Ben. I think the formulation of this central point may be a little skewed,
though: " the smaller the financial sector is the more real wealth there is for the rest of society to enjoy. The bigger the financial
sector becomes the more money it siphons off from the productive sectors."
I think this formulation may be somewhat muddling the real-vs.-financial dichotomy that MMT revolves around. Sort of by definition,
the financial sector is 100 percent nominal – even when it posits ownership of real assets, it is really just money-valuing them,
applying the unit-of-account property of money. The ownership is an abstraction. The owner of a share of stock or a gold ETF has
no concrete interaction with the company or commodity in question. So, contrasting the total size of the financial sector to the
totality of real wealth available – for those members of society who do *not* receive income from the financial sector – leaves
me scratching my head. I'm not clear what is being measured. I know that profits flowing to the financial sector have exploded
from around two percent of total corporate profits in the 1950s to around forty percent now. This means it is over-charging for
its so-called services, but I think the real-economy effects are non-linear, and more complex than this.
Regarding the financial sector's growing tendency to siphon off money from the productive sectors – yes, they do this. But
it is up to the state, with its currency-issuing and taxing powers, to regulate how far this process goes and what happens next.
In a recent post, J.D. Alt took note of the ephemeral nature of the financial sector's nominal money-wealth. It is "fictitious
capital". Electronic poker chips. Just zeros and ones, really. As long as the plutocrats simply hoard them – use them to keep
score – the state can just replace them by increasing spending. I also tend to think that the consumption spending of the .01
percent is rather inelastic. They already have everything they want. Keynes' attitude was to let them live it up, up to a point,
and then tax the excess back when they die.
For me, the most important part of your post is the section on commodity speculation and infrastructure privatization. This
truly is a huge deal, a clear interaction with the real economy and a terrible crime, actually. Again, though, it is up to the
state to permit these outrages or ban them – we used to ban them but we stopped. So. One more big thank-you to the Big Dog, I
guess. To think – before Clinton, America actually based aid to poor children on their ages and their poverty rather than the
supposed moral imperfections of their parents. We even had no-fee food stamps.
Obviously, the other reason we can't just let the one percent play their casino games is that they eventually blow up the real
economy, as a totality, through financial crises and destabilization. And, due to all the fabulist monetary propaganda out there,
there is now a big reservoir of public opinion and political will *in favor* of financial collapse. The libertarians and other
Paul-Partiers think it would do us all good. And bring back the gold standard. And "End the Fed", and all the rest of that good
19th Century stuff. I'm not a ready-for-Hillary kind of guy in general, but is it possible to imagine a scarier idea than President
Rand?
While most of your specific criticisms are quite valid, I think your brush is a bit too broad. "The problem is that the financial,
insurance, and real estate (FIRE) sectors do not actually produce any goods or services. "
This is obviously false. I have many times used services provided by banks, credit unions, insurance companies, and real estate
brokers and agents. It would be practically impossible to find the right house to buy, to sell it for a fair price, to get the
loan necessary to buy it, or to protect myself and my family from a catastrophic loss without their services.
It is undoubtedly true that most of the volatility of the FIRE sector since 1990 is due to speculation and parasitical activities,
but there is undoubtedly also some growth of useful services that has facilitated growth of the other sectors, not detracted from
it. Thus it is not always true that "the smaller the financial sector is the more real wealth there is for the rest of society
to enjoy".
Bottom line, you have a good point. Excessively broad statements might be more dramatic, but if they are not true they don't
help your cause.
I have gotten real value from real estate brokers. Did you ever try to sell a house without one? Qualify the serious buyers
and deal with the lookie-loos? And the government paperwork!! I've always gotten my money's worth.
No, the fire doesn't care if you have insurance, but the insurance company will advise you on how to prevent fires and minimize
the damage. Paying an insurance company has protected me from paying the unaffordable high cost of the insured risks. The service
provided by insurance is not incident prevention, it is management of financial risk, and it does that very well. My claims have
been handled quickly and fairly. I had one unusual case where I thought the insurance company should have paid me more than their
original offer (the nation-wide blue book value of the car didn't reflect the unique situation in my State), and after discussion
they agreed with me and paid. I've been with them for over 40 years and I'm very happy with their services.
If you want your bank to create wealth for you, you're looking in the wrong place. Banks are good for storing and protecting
your money, and many will do that for you without fees, and even pay you interest. They'll let you use their computers to pay
your creditors, also without charge. They'll even give you short-term interest-free loans, and pay you cash rebates, if you use
their credit cards. I like my banks' services, too. And, of course, if you want to borrow money they will lend it to you and if
your payment is late they don't break your legs. They will make a profit, though. That's why they do it. You don't have to participate
if you don't want to.
Not every bank is Goldman Sachs, and not every insurance company is AIG. Those are good examples of companies that often serve
no useful purpose, but there are many others who do provide useful services at a reasonable cost.
Although I can be sympathetic of the no-value creation thesis in the financial industry, comparing the performance of hedge
funds with the recent performance of bonds is a no big no-no, because it assumes a negative correlation between equities and bonds.
If one look at the world markets in the last 100 years, that has been the exception rather than the rule.
And you forgot to mention the important roles of capital markets in deploying capital and financing companies through IPOs,
bond offers, etc.
You missed another big point, negative real interest rates. The Fed Funds Rate is currently 0%-0.25%, while real inflation
is much higher. (The CPI is not an accurate measure of inflation.) Big banks can profit by borrowing at 0% and buying stuff (bonds,
stocks, commodities, real estate, politicians, whatever).
On LIBOR, here's another interesting bit. Cities and states lost a TON of money on interest rate swaps with banks. What was
sold as a "hedge" wound up blowing up and costing a fortune.
This was a fascinating piece, very readable for those of us with minimal financial education. However, since this is such a
good explainer for the layman, I think it would be very beneficial to explain how big a difference 1% in fees makes for an investor
over a lifetime. I know personally when I used to compare funds the difference between 1 and 2% in fees seemed negligible. But
then I saw that fantastic PBS Frontline
on this topic and saw how much that 1% could cost me over a lifetime! I now have everything that I personally manage in index
funds!
You can't really argue with what has been said, and all (of us) involved in the sector know it is massive rip off.
While a free market advocate, I think a first step would be to introduce meaningful fee caps on all state promoted or mandated
saving arrangements (eg ISAS, and Pensions), on the grounds that the market is skewed by the government intervention that creates
the glut of forced buyers, and so to correct that imbalance the market (i.e. consumers) need protection through fee caps. I'd
say no more than 20 – 25bps should be permitted for all ISAS and pension savings (DC or DB). Individual wealthy investors (investments
of more than say £5m?) can pay what they like.
>>The job of the finance sector is simply to manage existing resources. It creates nothing.
This is a dubious assertion, but you clearly believe it. How then, can you in good conscience, charge 1.25% (plus indirect
costs for the funds you hold in client portfolios) to manage people's money when you yourself admit you are adding no value?
I know this was for Ben, but there's a pretty simple answer to that question: They don't charge 1.25% because they create value,
they're charging a fee to access the profit created by companies they invest in. Say I told you that I knew a guy named Jimmy
who was going to make three bucks for every buck he gets, and I asked if you'd lend me a dollar to give to Jimmy with the promise
that he'd give me 1.50 cents of it. I'd want to keep 25 cents but you can have 1.25, and so you agree. I didn't create the 2 extra
dollars of value -- Jimmy did -- but I feel justified in asking for a cut because I gave you the tip about Jimmy's value creation
ability.
At least, that is my understanding of Ben's statement.
There are 6000 publicly traded companies. Some of them will have rising stock prices, some falling. If a money manager can
steer you to the rising ones, he is doing something of value. It doesn't mean he created anything physical that didn't exist before.
He's doing a service for you that would otherwise have taken you some time and effort to do, and that's what you pay for.
Yes, it's a different definition of value. The growth of financial services has been outpacing the growth of other sectors
to a monstrous scale, and that makes this distinction important. It signals a kind of corruption that can only mean high inflation
and decoupling money from economic output.
I don't follow. How is financial services different from any other kind of services, in the impact on inflation? Why not also
actors, barbers, or any other service profession? The growth of the financial sector might be explained by the fact that it is
the industry most able to exploit computers, and the first to do so on a large scale.
The corruption is, I think, a separate issue that is present whenever other people's money is involved. Financial services
and government are simply more involved that way than most other industries, and have been all along, dating to long before the
recent growth. Corruption is not impossible in any industry, just more attractive when the numbers are larger.
Corruption is never a separate in ANY corporate activity. The TAX CODE treats the wealth of the .01% radically different than
Income from Labor, because all Taxes on Capital Gains are deferred until taken and are not TAXED as ordinary income. The TAX CODE
is responsible for the corruption of our government because it has put real POWER, the Power of Wealth in the hands of the .01%,
to buy whatever it wants, while labor and the poor spend everything they earn or are given , every single year to survive in a
economic culture designed for the benefit of the .01%, something no one will write about!
Change the TAX CODE and the Corruption of Society will end!
Barbers and actors being paid for their labor do not have the same impact on inflation as a bank giving out loans and consumer
credit at interest. It's not equivalent at all.
Corruption in financial industries is what this article is discussing. If it's a separate issue, I'm confused as to the point
of talking about this at all!
I don't think your explanation is correct. Why wouldn't I go directly to Jimmy in that case and cut out the middle man since
he is offering no value add? The fact is, the middle man, Ben, in this case, believes that he can identify superior companies
to invest his clients money in and earn a greater return. This is Ben's value add and why he charges 1.25%.
Golfer John is correct and that point, essentially, blows a hole in Ben's thesis here that the financial sector adds no value
because they only manage "existing resources". Steering capital to the good ideas that improve consumer wealth and generate a
return is a value add and the fact that millions of transactions like this happen voluntarily between consenting adults further
supports this.
Physics tells us that matter cannot be created or destroyed, so the same resources that are on this earth today are the same
ones that were here 10,000 years ago. So, in that sense, Apple is simply managing "existing resources" when they build the iphone,
Toyota simply managing "existing resources" when they build a car, and UPS and US Mail are merely moving "existing resources"
from one location to another when they make deliveries, must be no value add there right?
Asserting that the financial sector only manages existing resources, and then citing that as proof of no value add is simply
a non sequiter.
No, I wasn't, though I have heard that. My theory of markets, and human group behavior in general, is a statistical approach.
There are averages, distributions, and temporary equilibriums, but the interesting parts are the outliers. I guess that is more
of a quantum flavor than Newtonian. Over time, economies behave cyclically. Much of nature and human group behavior is cyclical.
Paul -- That's true, and a good analogy, except you're getting a bit reductive with the term "existing resources". I agree
that "no value" is a bit extreme, which is why I became more interested in the -type- of value.
John – My physics is flawed to the extent that the law of conservation of matter is flawed, this I admit. I am much more economist
than physicist though so better that I get my physics wrong and econ right! I see a lot of similarities between the two, as well
as crucial differences, but I don't want to get too off topic.
Briana – "No Value is a bit extreme"
I agree, and as the absurdly hyperbolic title* of this article states, the author takes it to an even greater extreme – namely
that the financial sector is actually a systematic destroyer of value (parasite) that is created by all of the other industries.
The crux of his assertion rests on that they only "manage existing resources" and also calling Greg Mankiw an apologist, neither
strikes me as an intellectually rigorous argument.
And interestingly, on his own firm's website, the author apparently contradicts the thesis of this article when advertising
his financial services and the fees he charges for his own value add. I can think of several explanations for this, none of which
are particularly flattering, others can draw their own conclusions.
*a worse parasite than all of the murderous dictatorial regimes in human history that have institutionalized the slaughter
and torture of millions? Really? I note this because it is so obviously false that it makes the rest of the content seem unserious
and shallow even if valid points exist. Acidic comments tend to preach to the already converted, but perhaps that is the goal
here.
Yeah, ok. I should know better, Paul. My brain tried to rationalize the argument by making it less extreme. The goal probably
was to mobilize the choir to go Occupy Wall Street for a few more months, haha.
Those valid points shouldn't be ignored because of the poorly handled hyperbole, though. The financial sector does have a great
capacity to act as a parasite by overvaluing their services and squandering wealth generated by other industries instead of reinvesting
it in worthwhile, valuable enterprises; or using that wealth to essentially 'gamble' or invent money that is not attached to any
real value (i.e. shorting or credit default swaps). As the fruits of these behaviors are becoming obvious, it gets harder to justify
policies that allow them to happen.
In many ways that is my point. You found those "valid points" obviously correct before reading the article, so it rang true
despite the extreme hyperbole. I did not find those points self-evidently true so this poorly constructed argument relying on
clearly false assumptions struck me as uncompelling.
For example, how does one "overvalue their services"? If one charges too much, no one is forced to buy. I may find Ben's management
fee of 1.25% to be overvaluing himself, but I have the option of not paying and instead going to less expensive alternatives.
Why wouldn't the financial industry invest in "worthwhile valuable enterprises" if they provide a worthwhile return? After
all, aren't they driven by an insatiable desire for profit? Who determines what enterprises are worthwhile?
I do not see anything inherently wrong with short selling. Indeed, the ability to short a stock is simply expressing a view
about its value, and leads to greater and more accurate price discovery. What is wrong with shorting a stock if one believes it
is overpriced relative to its instrinsic value? Is it not preferable that prices reflect underlying economic fundamentals rather
than being disconnected from such? Shorting puts downward pressure on prices, and helps prevent overvaluation.
Credit Default Swaps are nothing more than insurance against a bond default. There is nothing inherently wrong with insurance.
I'm not suggesting that you, here in the comments, need to write a paper elaborating on those, just that this article did a
poor job of pursuading, though again, I am coming to the realization that I am likely not the intended audience.
This discussion in the comments has actually been more fruitful than the article itself.
(Sorry for the late response, I've been away for a few days.)
"For example, how does one "overvalue their services"?"
This argument hinges on everyone that purchases these services knowing their true value. It's very simplistic to say that if
someone purchases it, that is the real value. It gets complicated when you take into account the psychological pressures of purchasing
behavior, such as "middle-price" preferences, "money you don't see is money you don't miss" and other tricks that are employed
to get people to pay higher prices.
"Why wouldn't the financial industry invest in "worthwhile valuable enterprises" if they provide a worthwhile return? After
all, aren't they driven by an insatiable desire for profit? Who determines what enterprises are worthwhile?"
Countless services and products we rely on were funded by taxes to make them profitable. They are "worthwhile" but apparently
not "profitable" enough to invest in. Making money and creating value aren't the same thing. Ideally, everyone decides what is
worthwhile.
"I do not see anything inherently wrong with short selling."
Shorting is basically a bucket shop in disguise.
"Credit Default Swaps are nothing more than insurance against a bond default. There is nothing inherently wrong with insurance."
"This argument hinges on everyone that purchases these services knowing their true value."
In a literal sense, you are correct, it is an imperfect measure of value. However, I think it is far and away the most reliable
one we have as value is extremely subjective. I don't think it is right or prudent for third, non cost bearing parties to preempt
decisions made by consenting adults, rather, I would accord them the dignity of free choice. There are many things that consumers
purchase that I do not understand, why anyone would pay a premium for a fast car seems like a waste of money to me, for example.
Why anyone would pay money to golf, not to mention the huge cost in terms of time it takes to get through 18 holes, seems like
a waste of money to me. These are things that make no sense to me because I do not see the value there. But, I recognize that
people have various tastes and preferences, and I respect that and presume that individuals know themselves and their own tastes
and preferences better than I (or someone else) does. Therefore, when someone values something that I do not understand, I tend
to believe it is a result of a difference in preference, rather than they are too dumb to figure out what they like, or that they
are "tricked" into buying something and hence need protection delivered by those who fancy themselves as enlightened enough to
see the real truth. Nothing about this is unique to the financial industry, by the way.
"Countless services and products we rely on were funded by taxes to make them profitable. They are "worthwhile" but apparently
not "profitable" enough to invest in. Making money and creating value aren't the same thing. Ideally, everyone decides what is
worthwhile."
Apparently not enough people decided these services and products were worthwhile, so politicians decided they were worthwhile
and used the force and power of government to get them done. Substituting preferences of politicians, spending other people's
money for those of millions of individuals spending their own money does not seem like an efficient way to allocate resources.
I agree with you on purchasing decisions. People should be free to determine value. I'm not saying people are always dumb,
but I do think they are manipulated. If you want to believe they are not, that is up to you, but apparently you've never seen
advertising. The financial industry advertises itself heavily, especially in consumer credit markets and insurance. But if we're
going to gauge something as nebulous as "true value", it requires a level of conscientiousness from everyone, and accepting whatever
people purchase as reflecting it's actual value is a quick way to guarantee abuse, especially when you have something like consumer
credit. If people are free to determine value, they should also be held to the consequences of their choices, which is currently
not the case in the financial industry and increasingly in the general population.
"Apparently not enough people decided these services and products were worthwhile, so politicians decided they were worthwhile
and used the force and power of government to get them done. Substituting preferences of politicians, spending other people's
money for those of millions of individuals spending their own money does not seem like an efficient way to allocate resources."
You mean like electricity, phone services, railroads, airlines, fortified wheat, water treatment, the internet, satellites,
healthcare.. the list could go on and on. It is less efficient (a word that really needs to be defined clearly, but I'll assume
I know what you mean!), and it happens because otherwise it wouldn't be possible, and yet it becomes widely adopted and lauded
none-the-less; progress, they say. Like I said, worthwhile and profitable are not 1-to-1 correlation, just as willingness to purchase
doesn't necessarily indicate true value.
I thought you might have some interesting opinion on the CDS as money creation I'm still trying to figure that one out!
"... Bankers, pharmaceutical giants, Google, Facebook ... a new breed of rentiers are at the very top of the pyramid and they're sucking the rest of us dry @rcbregman ..."
"... 'A big part of the modern banking sector is essentially a giant tapeworm gorging on a sick body' ..."
"... This piece is about one of the biggest taboos of our times. About a truth that is seldom acknowledged, and yet – on reflection – cannot be denied. The truth that we are living in an inverse welfare state. These days, politicians from the left to the right assume that most wealth is created at the top. By the visionaries, by the job creators, and by the people who have "made it". By the go-getters oozing talent and entrepreneurialism that are helping to advance the whole world. ..."
"... To understand why, we need to recognise that there are two ways of making money. The first is what most of us do: work. That means tapping into our knowledge and know-how (our "human capital" in economic terms) to create something new, whether that's a takeout app, a wedding cake, a stylish updo, or a perfectly poured pint. To work is to create. Ergo, to work is to create new wealth. ..."
"... But there is also a second way to make money. That's the rentier way : by leveraging control over something that already exists, such as land, knowledge, or money, to increase your wealth. You produce nothing, yet profit nonetheless. By definition, the rentier makes his living at others' expense, using his power to claim economic benefit. ..."
"... For those who know their history, the term "rentier" conjures associations with heirs to estates, such as the 19th century's large class of useless rentiers, well-described by the French economist Thomas Piketty . These days, that class is making a comeback. (Ironically, however, conservative politicians adamantly defend the rentier's right to lounge around, deeming inheritance tax to be the height of unfairness.) But there are also other ways of rent-seeking. From Wall Street to Silicon Valley , from big pharma to the lobby machines in Washington and Westminster, zoom in and you'll see rentiers everywhere. ..."
"... It may take quite a mental leap to see our economy as a system that shows solidarity with the rich rather than the poor. So I'll start with the clearest illustration of modern freeloaders at the top: bankers. Studies conducted by the International Monetary Fund and the Bank for International Settlements – not exactly leftist thinktanks – have revealed that much of the financial sector has become downright parasitic. How instead of creating wealth, they gobble it up whole. ..."
"... In other words, a big part of the modern banking sector is essentially a giant tapeworm gorging on a sick body. It's not creating anything new, merely sucking others dry. Bankers have found a hundred and one ways to accomplish this. The basic mechanism, however, is always the same: offer loans like it's going out of style, which in turn inflates the price of things like houses and shares, then earn a tidy percentage off those overblown prices (in the form of interest, commissions, brokerage fees, or what have you), and if the shit hits the fan, let Uncle Sam mop it up. ..."
"... Bankers are the most obvious class of closet freeloaders, but they are certainly not alone. Many a lawyer and an accountant wields a similar revenue model. Take tax evasion . Untold hardworking, academically degreed professionals make a good living at the expense of the populations of other countries. Or take the tide of privatisations over the past three decades, which have been all but a carte blanche for rentiers. One of the richest people in the world, Carlos Slim , earned his millions by obtaining a monopoly of the Mexican telecom market and then hiking prices sky high. The same goes for the Russian oligarchs who rose after the Berlin Wall fell , who bought up valuable state-owned assets for song to live off the rent. ..."
"... Even paragons of modern progress like Apple, Amazon, Google , Facebook, Uber and Airbnb are woven from the fabric of rentierism. Firstly, because they owe their existence to government discoveries and inventions (every sliver of fundamental technology in the iPhone, from the internet to batteries and from touchscreens to voice recognition, was invented by researchers on the government payroll). And second, because they tie themselves into knots to avoid paying taxes, retaining countless bankers, lawyers, and lobbyists for this very purpose. ..."
"... Even more important, many of these companies function as "natural monopolies", operating in a positive feedback loop of increasing growth and value as more and more people contribute free content to their platforms. Companies like this are incredibly difficult to compete with, because as they grow bigger, they only get stronger. ..."
"... Most of Mark Zuckerberg's income is just rent collected off the millions of picture and video posts that we give away daily for free. And sure, we have fun doing it. But we also have no alternative – after all, everybody is on Facebook these days. Zuckerberg has a website that advertisers are clamouring to get onto, and that doesn't come cheap. Don't be fooled by endearing pilots with free internet in Zambia. Stripped down to essentials, it's an ordinary ad agency. In fact, in 2015 Google and Facebook pocketed an astounding 64% of all online ad revenue in the US. ..."
"... Rentierism is, in essence, a question of power. That the Sun King Louis XIV was able to exploit millions was purely because he had the biggest army in Europe. It's no different for the modern rentier. He's got the law, politicians and journalists squarely in his court. That's why bankers get fined peanuts for preposterous fraud, while a mother on government assistance gets penalised within an inch of her life if she checks the wrong box. ..."
"... The biggest tragedy of all, however, is that the rentier economy is gobbling up society's best and brightest. Where once upon a time Ivy League graduates chose careers in science, public service or education, these days they are more likely to opt for banks, law firms, or trumped up ad agencies like Google and Facebook. When you think about it, it's insane. We are forking over billions in taxes to help our brightest minds on and up the corporate ladder so they can learn how to score ever more outrageous handouts. ..."
"... One thing is certain: countries where rentiers gain the upper hand gradually fall into decline. Just look at the Roman Empire. Or Venice in the 15th century. Look at the Dutch Republic in the 18th century. Like a parasite stunts a child's growth, so the rentier drains a country of its vitality. ..."
Bankers, pharmaceutical giants, Google, Facebook ... a new breed of rentiers are at the very top of the pyramid and they're
sucking the rest of us dry @rcbregman
'A big part of the modern banking sector is essentially a giant tapeworm gorging on a sick body'.
This piece is about one of the biggest taboos of our times. About a truth that is seldom acknowledged, and yet – on reflection
– cannot be denied. The truth that we are living in an inverse welfare state. These days, politicians from the left to the right assume that most wealth is created at the top. By the visionaries, by the job
creators, and by the people who have "made it". By the go-getters oozing talent and entrepreneurialism that are helping to advance
the whole world.
Now, we may disagree about the extent to which success deserves to be rewarded – the philosophy of the left is that the strongest
shoulders should bear the heaviest burden, while the right fears high taxes will blunt enterprise – but across the spectrum virtually
all agree that wealth is created primarily at the top.
So entrenched is this assumption that it's even embedded in our language. When economists talk about "productivity", what they
really mean is the size of your paycheck. And when we use terms like "
welfare
state ", "redistribution" and "solidarity", we're implicitly subscribing to the view that there are two strata: the makers and
the takers, the producers and the couch potatoes, the hardworking citizens – and everybody else.
In reality, it is precisely the other way around. In reality, it is the waste collectors, the nurses, and the cleaners whose shoulders
are supporting the apex of the pyramid. They are the true mechanism of social solidarity. Meanwhile, a growing share of those we
hail as "successful" and "innovative" are earning their wealth at the expense of others. The people getting the biggest handouts
are not down around the bottom, but at the very top. Yet their perilous dependence on others goes unseen. Almost no one talks about
it. Even for politicians on the left, it's a non-issue.
To understand why, we need to recognise that there are two ways of making money. The first is what most of us do: work. That means
tapping into our knowledge and know-how (our "human capital" in economic terms) to create something new, whether that's a takeout
app, a wedding cake, a stylish updo, or a perfectly poured pint. To work is to create. Ergo, to work is to create new wealth.
But there is also a second way to make money.
That's the rentier way : by leveraging control over something that already exists, such as land, knowledge, or money, to increase
your wealth. You produce nothing, yet profit nonetheless. By definition, the rentier makes his living at others' expense, using his
power to claim economic benefit.
'From Wall Street to Silicon Valley, zoom in and you'll see rentiers everywhere.'
For those who know their history, the term "rentier" conjures associations with heirs to estates, such as the 19th century's large
class of useless rentiers, well-described by the
French economist
Thomas Piketty . These days, that class is making a comeback. (Ironically, however, conservative politicians adamantly defend
the rentier's right to lounge around, deeming inheritance tax to be the height of unfairness.) But there are also other ways of rent-seeking.
From Wall Street to Silicon Valley , from big
pharma to the lobby machines in Washington and Westminster, zoom in and you'll see rentiers everywhere.
There is no longer a sharp dividing line between working and rentiering. In fact, the modern-day rentier often works damn hard.
Countless people in the financial sector, for example, apply great ingenuity and effort to amass "rent" on their wealth. Even the
big innovations of our age – businesses like Facebook
and Uber – are interested mainly in expanding the rentier economy. The problem with most rich people therefore is not that they are
coach potatoes. Many a CEO toils 80 hours a week to multiply his allowance. It's hardly surprising, then, that they feel wholly entitled
to their wealth.
It may take quite a mental leap to see our economy as a system that shows solidarity with the rich rather than the poor. So I'll
start with the clearest illustration of modern freeloaders at the top: bankers. Studies conducted by the
International Monetary Fund and the
Bank for International Settlements – not exactly leftist
thinktanks – have revealed that much of the financial sector has become downright parasitic. How instead of creating wealth, they
gobble it up whole.
In other words, a big part of the modern banking sector is essentially a giant tapeworm gorging on a sick body. It's not creating
anything new, merely sucking others dry. Bankers have found a hundred and one ways to accomplish this. The basic mechanism, however,
is always the same: offer loans like it's going out of style, which in turn inflates the price of things like houses and shares,
then earn a tidy percentage off those overblown prices (in the form of interest, commissions, brokerage fees, or what have you),
and if the shit hits the fan, let Uncle Sam mop it up.
The financial innovation concocted by all the math whizzes working in modern banking (instead of at universities or companies
that contribute to real prosperity) basically boils down to maximizing the total amount of debt. And debt, of course, is a means
of earning rent. So for those who believe that pay ought to be proportionate to the value of work, the conclusion we have to draw
is that many bankers should be earning a negative salary; a fine, if you will, for destroying more wealth than they create.
Bankers are the most obvious class of closet freeloaders, but they are certainly not alone. Many a lawyer and an accountant wields
a similar revenue model.
Take
tax evasion . Untold hardworking, academically degreed professionals make a good living at the expense of the populations of
other countries. Or take the tide of privatisations over the past three decades, which have been all but a carte blanche for rentiers.
One of the richest people in the world,
Carlos Slim , earned his millions by obtaining a monopoly of the Mexican telecom market and then hiking prices sky high. The
same goes for the Russian oligarchs who rose after the
Berlin Wall fell , who bought up valuable state-owned assets for song to live off the rent.
But here comes the rub. Most rentiers are not as easily identified as the greedy banker or manager. Many are disguised. On the
face of it, they look like industrious folks, because for part of the time they really are doing something worthwhile. Precisely
that makes us overlook their massive rent-seeking.
Take the pharmaceutical industry. Companies like
GlaxoSmithKline and
Pfizer regularly
unveil new drugs, yet most real medical breakthroughs are made quietly at government-subsidised labs. Private companies mostly manufacture
medications that resemble what we've already got. They get it patented and, with a hefty dose of marketing, a legion of lawyers,
and a strong lobby, can live off the profits for years. In other words, the vast revenues of the pharmaceutical industry are the
result of a tiny pinch of innovation and fistfuls of rent.
Even paragons of modern progress like Apple, Amazon, Google
, Facebook, Uber and Airbnb are woven from the fabric of rentierism. Firstly, because they owe their existence to government discoveries
and inventions (every sliver of fundamental technology in the iPhone, from the internet to batteries and from touchscreens to voice
recognition, was invented by researchers on the government payroll). And second, because they tie themselves into knots to avoid
paying taxes, retaining countless bankers, lawyers, and lobbyists for this very purpose.
Even more important, many of these companies function as "natural monopolies", operating in a positive feedback loop of increasing
growth and value as more and more people contribute free content to their platforms. Companies like this are incredibly difficult
to compete with, because as they grow bigger, they only get stronger.
Aptly characterising this "platform capitalism" in an article,
Tom Goodwin writes : "Uber, the world's largest taxi company, owns no vehicles. Facebook, the world's most popular media owner,
creates no content. Alibaba, the most valuable retailer, has no inventory. And Airbnb, the world's largest accommodation provider,
owns no real estate."
Facebook
Twitter
Pinterest 'Every sliver of fundamental technology in the iPhone, from the internet to batteries and from touchscreens to voice
recognition, was invented by researchers on the government payroll.' Photograph: Regis Duvignau/Reuters
So what do these companies own? A platform. A platform that lots and lots of people want to use. Why? First and foremost, because
they're cool and they're fun – and in that respect, they do offer something of value. However, the main reason why we're all happy
to hand over free content to Facebook is because all of our friends are on Facebook too, because their friends are on Facebook because
their friends are on Facebook.
Most of Mark Zuckerberg's income is just rent collected off the millions of picture and video posts that we give away daily for
free. And sure, we have fun doing it. But we also have no alternative – after all, everybody is on Facebook these days. Zuckerberg
has a website that advertisers are clamouring to get onto, and that doesn't come cheap. Don't be fooled by endearing pilots with
free internet in Zambia. Stripped down to essentials, it's an ordinary ad agency. In fact, in 2015 Google and Facebook pocketed an
astounding
64% of all online ad revenue in the US.
But don't Google and Facebook make anything useful at all? Sure they do. The irony, however, is that their best innovations only
make the rentier economy even bigger. They employ scores of programmers to create new algorithms so that we'll all click on more
and more ads.
Uber has
usurped the whole taxi sector just as
Airbnb has upended the hotel industry and Amazon has overrun the book trade. The bigger such platforms grow the more powerful
they become, enabling the lords of these digital feudalities to demand more and more rent.
Think back a minute to the definition of a rentier: someone who uses their control over something that already exists in order
to increase their own wealth. The feudal lord of medieval times did that by building a tollgate along a road and making everybody
who passed by pay. Today's tech giants are doing basically the same thing, but transposed to the digital highway. Using technology
funded by taxpayers, they build tollgates between you and other people's free content and all the while pay almost no tax on their
earnings.
This is the so-called innovation that has Silicon Valley gurus in raptures: ever bigger platforms that claim ever bigger handouts.
So why do we accept this? Why does most of the population work itself to the bone to support these rentiers?
I think there are two answers. Firstly, the modern rentier knows to keep a low profile. There was a time when everybody knew who
was freeloading. The king, the church, and the aristocrats controlled almost all the land and made peasants pay dearly to farm it.
But in the modern economy, making rentierism work is a great deal more complicated. How many people can explain a
credit default swap
, or a collateralised debt obligation ? Or the revenue
model behind those cute Google Doodles? And don't the folks on Wall Street and in Silicon Valley work themselves to the bone, too?
Well then, they must be doing something useful, right?
Maybe not. The typical workday of Goldman Sachs' CEO may be worlds away from that of King Louis XIV, but their revenue models
both essentially revolve around obtaining the biggest possible handouts. "The world's most powerful investment bank," wrote the journalist
Matt Taibbi about
Goldman Sachs , "is a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything
that smells like money."
But far from squids and vampires, the average rich freeloader manages to masquerade quite successfully as a decent hard worker.
He goes to great lengths to present himself as a "job creator" and an "investor" who "earns" his income by virtue of his high "productivity".
Most economists, journalists, and politicians from left to right are quite happy to swallow this story. Time and again language is
twisted around to cloak funneling and exploitation as creation and generation.
However, it would be wrong to think that all this is part of some ingenious conspiracy. Many modern rentiers have convinced even
themselves that they are bona fide value creators. When current Goldman Sachs CEO
Lloyd Blankfein
was asked about the purpose of his job, his straight-faced answer was that he is "
doing God's
work ". The Sun King would have approved.
The second thing that keeps rentiers safe is even more insidious. We're all wannabe rentiers. They have made millions of people
complicit in their revenue model. Consider this: What are our financial sector's two biggest cash cows? Answer: the housing market
and pensions. Both are markets in which many of us are deeply invested.
Recent decades have seen more and more people contract debts to buy a home, and naturally it's in their interest if
house
prices continue to scale new heights (read: burst bubble upon bubble). The same goes for pensions. Over the past few decades
we've all scrimped and saved up a mountainous pension piggy bank. Now pension funds are under immense pressure to ally with the biggest
exploiters in order to ensure they pay out enough to please their investors.
The fact of the matter is that feudalism has been democratised. To a lesser or greater extent, we are all depending on handouts.
En masse, we have been made complicit in this exploitation by the rentier elite, resulting in a political covenant between the rich
rent-seekers and the homeowners and retirees.
Don't get me wrong, most homeowners and retirees are not benefiting from this situation. On the contrary, the banks are bleeding
them far beyond the extent to which they themselves profit from their houses and pensions. Still, it's hard to point fingers at a
kleptomaniac when you have sticky fingers too.
So why is this happening? The answer can be summed up in three little words: Because it can.
Rentierism is, in essence, a question of power. That the Sun King Louis XIV was able to exploit millions was purely because he
had the biggest army in Europe. It's no different for the modern rentier. He's got the law, politicians and journalists squarely
in his court. That's why bankers get fined peanuts for preposterous fraud, while a mother on government assistance gets penalised
within an inch of her life if she checks the wrong box.
The biggest tragedy of all, however, is that the rentier economy is gobbling up society's best and brightest. Where once upon
a time Ivy League graduates chose careers in science, public service or education, these days they are more likely to opt for banks,
law firms, or trumped up ad agencies like Google and Facebook. When you think about it, it's insane. We are forking over billions
in taxes to help our brightest minds on and up the corporate ladder so they can learn how to score ever more outrageous handouts.
One thing is certain: countries where rentiers gain the upper hand gradually fall into decline. Just look at the Roman Empire.
Or Venice in the 15th century. Look at the Dutch Republic in the 18th century. Like a parasite stunts a child's growth, so the rentier
drains a country of its vitality.
What innovation remains in a rentier economy is mostly just concerned with further bolstering that very same economy. This may
explain why the big dreams of the 1970s, like flying cars, curing cancer, and colonising Mars, have yet to be realised, while bankers
and ad-makers have at their fingertips technologies a thousand times more powerful.
Yet it doesn't have to be this way. Tollgates can be torn down, financial products can be banned, tax havens dismantled, lobbies
tamed, and patents rejected. Higher taxes on the ultra-rich can make rentierism less attractive, precisely because society's biggest
freeloaders are at the very top of the pyramid. And we can more fairly distribute our earnings on land, oil, and innovation through
a system of, say, employee shares, or a
universal basic
income .
But such a revolution will require a wholly different narrative about the origins of our wealth. It will require ditching the
old-fashioned faith in "solidarity" with a miserable underclass that deserves to be borne aloft on the market-level salaried shoulders
of society's strongest. All we need to do is to give real hard-working people what they deserve.
And, yes, by that I mean the waste collectors, the nurses, the cleaners – theirs are the shoulders that carry us all.
"... Neoliberalism basically makes culture a personal choice. You are free to choose whatever culture you want. Freedom is the ability to do whatever you want to do and no one can stand in your way. But that doesn't work if you are a Christian. ..."
"... In neoliberal ideology, culture is something that humanity added to the world. Culture doesn't reflect any reality out there. There is no purpose. There is no God. It's just biology, chemistry, physics, what they call "natural laws". ..."
"... But what are neoliberals trying to do? They are trying to impose a multicultural culture. That's the problem. A multicultural culture is impossible, It's a contradiction. On one side, they talk about women`s rights and on the other side they support radical islamists who want legalization of Sharia law in the US. It's just insane! There is no way of making sense of it. And that's why I think they don't have any future ..."
You are not alone in asking the question: How is it possible that we can be so antagonistic towards conservative traditional Christianity
and yet so accepting of Islam?
I think we have to understand that there has been a revolution in the US and the West in general. An ideological revolution for
neoliberalism.
Neoliberalism is dedicated to scientific rationalism, the neoliberal conception of life: science, biology, chemistry, physics,
mathematics, that's it. Everything else is the matter of your own personal opinion.
When that began to make its way into our culture and policy, in the 1960's in particular, it gave rights to something called "emancipatory
politics". The emancipation has to be freedom or liberation.
Emancipatory politics basically says that traditions are bad and that customs discriminate people. Emancipation dictates that
If a person want to be Islamic, he can be Islamic, if he wants to be homosexual, he can be homosexual, if he wants to change gender,
he can change it. And any tradition that stands against that has to be pushed aside because it is considered to be discriminatory.
Over the last several decades we've seen a redefinition of the American Public Square. The American Public Square used to be very
Christian. It was guided by primarily Anglo-Protestant traditional norms. Now it is being governed much more by these emancipatory-politics
norms. Therefore, if you are considered to be a part of the group that was not allowed into the Public Square because of Christianity,
now you are going to get special treatment. They are going to make laws for you and, as a part of those laws, they have to cast out
the Christianity that was impeding you from coming into the Public Square.
Traditional morality and customs are now considered as evil and discriminatory. Neoliberalism is actually much more accommodating
to Islam than to Christianity. Why? Because Islam was considered to be discriminated as well as feminists, LGBT, African-Americans,
and other national minorities. Any group that was once pushed out from public participation will now be allowed in.
Neoliberalism basically makes culture a personal choice. You are free to choose whatever culture you want. Freedom is the
ability to do whatever you want to do and no one can stand in your way. But that doesn't work if you are a Christian.
Remember, neoliberalism says science is the only way we can know. So, if science is the only way we can know, what is culture?
In neoliberal ideology, culture is something that humanity added to the world. Culture doesn't reflect any reality out there.
There is no purpose. There is no God. It's just biology, chemistry, physics, what they call "natural laws".
So, in that way, culture is how we impose meanings and purposes on a meaningless and purposeless world. Who am I to tell you that
your way of imposing meanings is bad and the way how I impose it is good? The problem is culture itself. One cannot think about biology,
chemistry, physics without culture. Those things are culture. So culture is inescapable.
But what are neoliberals trying to do? They are trying to impose a multicultural culture. That's the problem. A multicultural
culture is impossible, It's a contradiction. On one side, they talk about women`s rights and on the other side they support radical
islamists who want legalization of Sharia law in the US. It's just insane! There is no way of making sense of it. And that's why
I think they don't have any future.
"... The second reason is now more pertinent than when it was first given. The capitalist system, by its very nature, places the preponderance of wealth in the hands of a small minority. ..."
"... As G.K. Chesterton rightly stated, the problem with capitalism is that it produces too few capitalists! ..."
"... The above were only some of the reasons why the Distributists, who formed the Distributist League in 1926, thought that the capitalist economy would eventually collapse. These were not, however, the only problems which they found with the system. ..."
"... The idea that if every man simply seeks after his own economic interest, all will be provided for and prosper, was almost universally rejected during these decades. We see strong reactions to economic liberalism in Russian Communism, German National Socialism, Italian Fascism, Austrian, Portuguese, and Spanish Corporatism, British Fabian Socialism, along with the American "New Deal" leftism. Thus, in the 1930s and 1940s, most of the world was ordered by ideologies which explicitly rejected the premises of economic liberalism. We must, also, not forget the international economic crash of the late 20s and early 30s, which produced economic depression, totalitarian regimes, and, finally, world war. ..."
In truly "prophetic" utterances, the analysis of present circumstances, along with a
consideration of the laws written into human nature which manifest themselves in history, can
yield a prediction concerning the general outline of things to come. This judgment of the
well-informed and perceptive mind, is somewhat undermined by only one factor. The universe and
the "universe" of human society in which the inherent laws written into human nature by its
Creator reveal themselves in historical events, is also a universe which contains free
creatures who are undetermined as regards the means they can employ to achieve their
specifically human end. Human freedom inserts a variable in the material necessity of the
universe.
This contingency and variability has its ultimate source in the spirituality of the
human soul. It is precisely on account of his materialistic rejection of the human soul, that
Karl Marx, for instance, could make such ridiculously precise predictions as to the "necessary"
movement of economic, political, and social history. This does not mean, however, that there is
not an inherent natural law which determine which human endeavors will "work" and which will
lead to catastrophe.
During the 19th and early 20th centuries, there were a group of scholars,
theologians, philosopher, social critics, and poets, who predicted the inevitable demise of the
capitalist economic system which was just developing in Continental Europe, but had been
operative for 100 years in England. When you read their works, especially the British authors
of the early 20th century, here we include Hilaire Belloc, G.K. Chesterton, and Arthur Penty,
one is struck by the fact that their analyzes are more valid today than they were 70 or 80
years ago, their predictions more likely to be imminently fulfilled.
What they predicted was
nothing less than the collapse of the capitalist system. In the case of Belloc, in his book The
Servile State, it was predicted that capitalism would soon transform itself into an economic
and social system which resembled the slave economies of the pre-Christian and early Christian
eras. Why did they predict such a collapse or inevitable transformation? In their writings,
many reasons are given, however, we can narrow them down to three. The first, they referred to
as the "capitalist paradox." The paradox is a consequence of capitalism being an economic
system which, in the long run, "prevents people from obtaining the wealth produced and prevents
the owner of the wealth from finding a market." Since the capitalist strives both for ever
greater levels of production and lower wages, eventually "the laborer who actually produces
say, boots cannot afford to buy a sufficient amount of the boots which he himself has made."
This leads to the "absurd position of men making more goods than they need, and yet having less
of those goods available for themselves than they need."1
The second reason is now more pertinent than when it was first given. The capitalist system,
by its very nature, places the preponderance of wealth in the hands of a small minority. This
monopoly on the money supply by banking and financial concerns, becomes more absolute as the
capital-needing consumer must go to the banks to borrow money. Usury, now called "interest,"
insures that those who first possesses the money for loan, will end up with a greater portion
of the money supply than they possessed before the loan was issued. As wages stagnate and
interest payments become increasingly impossible to make, massive numbers of defaults will
inevitably produce a crisis for the entire financial system.2
When entire nations default on
loans, there will be a crisis throughout the entire international financial system. Demise is,
therefore, built into the very structure of the capitalistic system in which capital (i.e., all
kinds of wealth whatsoever which man uses with the object of producing further wealth, and
without which the further wealth could not be produced. It is a reserve without which the
process of production is impossible)3 is primarily in the hands of the few.
As G.K. Chesterton
rightly stated, the problem with capitalism is that it produces too few capitalists! The third
fact concerning capitalism which the Distributists thought would inevitably bring down the
system or lead to its fundamental transformation, was the general instability and personal
insecurity which marks a full-blown capitalist economy. What accounts for this general feeling
of insecurity and instability, which characterizes both the individual "wage-earner" and the
society living under capitalism, is the always present fear of unemployment and, hence, of
destitution and the fact that a laborer's real wages leave him with only enough money to cover
the expenses of the day. Saving, so as to provide an economic hedge against the misfortune of
unemployment or personal crisis, becomes almost impossible.4
The above were only some of the reasons why the Distributists, who formed the Distributist
League in 1926, thought that the capitalist economy would eventually collapse. These were not,
however, the only problems which they found with the system.
The social consequences of the majority being unable to afford real property, the decline
and, eventual, disappearance of the trade guilds and vocational corporations, the "necessity"
of wives and mothers entering the "work force," the end of small-scale family -owned businesses
and farms, the decline of the apprentice system were all indictments of capitalism in the mind
of those who sought to chart out a "third way" between capitalism, which is simply liberalism
in the economic sphere, and socialism.
There is little doubt that the problems with capitalism which were cited by the
Distributists have only grown in their proportion in our own time. The concentration of wealth,
exemplified by the recent merger of Citicorp and Travelers which produced the largest banking
institution in the United States with assets of $700 billion, simply boggles the mind. The
institution of usury, always an necessary adjunct of economic liberalism, has caused in recent
years more bankruptcies and personal debt than ever before in history. Nations, such as
Indonesia, are tottering on the brink of social, economic, and political chaos because of their
inability to pay the interest on their hundreds of billions of dollars in bank debt. If such a
nation should go into default, it could threaten to throw a whole variety of nations into
recession, depression, or worse.
It is not proper to say that the predictions of the imminent demise of capitalism were
totally without fulfillment. The 1920s, 30s, and 40s witnessed reaction after reaction to the
radical individualism which is the fundamental idea of liberal capitalism. Truly, the market is
the institutionalization of individualism and non-responsibility. Neither buyer nor seller is
responsible for anything but himself.5
The idea that if every man simply seeks after his own
economic interest, all will be provided for and prosper, was almost universally rejected during
these decades. We see strong reactions to economic liberalism in Russian Communism, German
National Socialism, Italian Fascism, Austrian, Portuguese, and Spanish Corporatism, British
Fabian Socialism, along with the American "New Deal" leftism. Thus, in the 1930s and 1940s,
most of the world was ordered by ideologies which explicitly rejected the premises of economic
liberalism. We must, also, not forget the international economic crash of the late 20s and
early 30s, which produced economic depression, totalitarian regimes, and, finally, world
war.
There is one fact which separates our day from the days of the 30s and 40s, however. The
concentration of wealth and capital, the inadequacy of a man's pay to provide the basics of
life and to provide for savings for the future, the lack of real property generously and
broadly distributed, is masked by the reality of easy credit. Easy credit, which is not
ultimately "easy" at all on the borrower, anesthetizes the populace to the grim facts of
capitalist monopoly. Since we seem to be able to get all the things that we want, the reality
of real money being increasingly unavailable to the average man is lost in the delusionary
state of the consumerist utopia. Only when the "benefit" of usurious credit is cut off, do we
realize the full extent of the problem. The greatest problem with liberal capitalism, however,
is not the concentration of wealth or real property, the greatest "existential" problem created
by capitalism is the problem of the very meaning and reality of work. To work is essential to
what it means to be a human being. Next to the family, it is work and the relationships
established by work that are the true foundations of society.6 In modern capitalism, however,
it is productivity and profit which are the basic aims, not the providing of satisfying work.
Moreover, since "labor saving" devices are the proudest accomplishments of industrial
capitalism, labor itself is stamped with the mark of undesirability. But what is undesirable
cannot confer dignity.7
It is not merely that industrial capitalism has produced forms of work, both manual and
white-collared, which are "utterly uninteresting and meaningless. Mechanical, artificial,
divorced from nature, utilizing only the smallest part of man's potential capacities,
[sentencing] the great majority of workers to spending their working lives in a way which
contains no worthy challenge, no stimulus to self-perfection, no chance of development, no
element of Beauty, Truth, Goodness."8 Rather, capitalism has so fundamentally alienated man
from his own work, that he no longer considers it his own. It is those with the financial
monopoly who determine what forms of work are to exist and which are "valuable" (i.e., useful
for rendering profits to the owners of money).9 Since man spends most of his days working, his
entire existence becomes hollowed out, serving a purpose which is not of his own choosing nor
in accord with his final end.
In regard to the entire question of a "final end," if we are to consider capitalism from a
truly philosophical perspective, we must ask of it the most philosophical of questions, why?
What is the purpose for which all else is sacrificed, what is the purpose of continuous growth?
Is it growth for growth's sake? With capitalism, there is no "saturation point," no condition
in which the masters of the system say that the continuous growth of corporate profits and the
development of technological devices has ceased to serve the ultimate, or even the proximate,
ends of mankind. Perhaps, the most damning indictment of economic liberalism, indeed, of any
form of liberalism, is its inability to answer the question "why."
A) Corporatism: The Catholic Response
1) The History of the "Third Way"
To understand the history of the "Third Way," a name given to an economic system which is
neither Marxist nor Capitalist by French corporatist thinker Auguste Murat (1944), we must
consider the social, political, and economic realities which originally motivated its main
advocates. Originally, "Corporatism," later to be termed "Distributism" by its British
advocates Hilaire Belloc and G.K. Chesterton, was a response on the part of German
traditionalists and Catholics to the inroads which the ideology of the French Revolution had
made into their country in the early and middle years of the 19th century. The institutions
which were being defended in Corporatist thought were the ancient "estates" or "guilds" which
had been the pillars of Christian Germany for centuries. These corporate bodies, grouping
together all the men of a particular occupation or social function, were an institutional
opposition to the revolutionary doctrines of individualism and human equality. One early
rightist thinker, Adam Muller, upheld the traditional idea of social stratification based upon
an organic hierarchy of estates or guilds (Berufstandische). Such a system was necessary on
account of the essential dissimilarity of men. Moreover, such a system would prevent the
"atomization" of society so much desired by the revolutionaries who wished to remake in a new
form that which had been pulverized by liberalism.10
2) Von Ketteler and the Guild System
It was, however, a German nobleman and prelate, Wilhelm Emmanuel, Baron von Ketteler
(1811-1877), Bishop of Mainz, who directed Corporatism into new avenues and forced it to
address new concerns. The realities which Bishop von Ketteler knew the Catholic mind had to
address was the new reality of industrialism and economic liberalism. As Pope Leo XIII himself
admitted on several occasions, it was the thought of Bishop von Ketteler which helped shape his
own encyclical letter on Catholic economic teaching Rerum Novarum (1891).11 The "new things"
His Holiness was addressing were capitalism and socialism. Both meet with his condemnation,
although capitalism is condemned with strong language as an abuse of property, a deprivation of
the many by the few, while socialism is dismissed outright as being contrary to man's inherent
right to own property.12
Von Ketteler, also, in his book Die Arbeiterfrage und das Christenthum (Christianity and the
Labor Problem), attacks the supremacy of capital and the reign of economic liberalism as the
two main roots of the evils of modern society. Both represented the growing ascendancy of
individualism and materialism, twin forces that were operating to "bring about the dissolution
of all that unites men organically, spiritually, intellectually, morally, and socially."
Economic liberalism was nothing but an application of materialism to society." The working
class are to be reduced to atoms and then mechanically reassembled. This is the fundamental
generative principle of modern political economy."13 What Ketteler sought to remedy was "This
pulverization method, this chemical solution of humanity into individuals, into grains of dust
equal in value, into particles which a puff of wind may scatter in all directions."14 Bishop
von Ketteler's solution to this problem of the pulverization of the work force and the ensuing
injustice which this would inevitably breed, was to propose an idea which was the central
concept of medieval and post-medieval economic life, the guild system. When responding to a
letter from a group of Catholic workers who had submitted the question "Can a Catholic
Workingman be a member of the Socialist Worker's Party?," Bishop von Ketteler outlined the
basic structure of these vocational guilds or Berufstandische: First, "The desired
organizations must be of natural growth; that is, they must grow out of the nature of things,
out of the character of the people and its faith, as did the guilds of the Middle Ages."
Second, "They must have an economic purpose and must not be subservient to the intrigues and
idle dreams of politicians nor to the fanaticism of the enemies of religion." Third, "They must
have a moral basis, that is, a consciousness of corporative honor, corporative responsibility,
etc. Fourth, "They must include all the individuals of the same vocational estates." Fifth,
"Self-government and control must be combined in due proportion."
The guilds which von Ketteler was advocating were to be true social corporations, true
vocational "bodies" which were to have a primarily economic end, and yet, be animated by the
"soul" of a common faith. These "bodies," just like all organic entities, would be made up of
distinct parts all exercising a unique role in their particular trade. In the days of corporate
giants and trade unions, it is, perhaps, impossible to imagine vocational organizations which
include both owners and workers, along with technicians of all types. These organizations would
regulate all aspects of their particular trade, including wages, prices for products, quality
control, along with certifying that all apprentices has the requisite skills to adequately
perform the guild's particular art.
3) The Guild System and Social Solidarity
Following the intellectual path charted by von Ketteler, another German Catholic, Franz
Hitze (1851-1921), wrote of the social, psychological, and, even, spiritual purposes which
would be served by the vocational corporations or guilds. Claiming that "economic freedom" was
only a myth serving to disguise the fact that capital actually ordered things completely with a
single eye to its own advantage, Hitze saw no alternative to the economic and social control
traditionally exercised by the guilds. It would be such organizations which overcame the
antagonism between capital and labor which fed Marxist propaganda. In his book Kapital und
Arbeit und die Reorganisation der Gesellschaft (Capital and Labor and the Reorganization of
Society), Hitze states that such organizations would also end the fierce competition which is
totally inconsistent with the idea of the Common Good and social solidarity. This idea that an
economy can be ordered on the basis of "mutuality" and the identification of the interests of
employer and employee, is difficult for those who assume that an economic system must be
powered by competition and self-interest. It must be remembered, however, that such was the
economic system of Christendom until the guilds were destroyed by the advent of the French
Revolution.
What these traditional vocational groups were able to foster during the ages in which they
ordered the life of the craftsman, was a decentralization both of property and of economic
power. They, also, enabled the average craftsman to have a real say in the workings of his
trade. Such economic "federalism" or decentralization prevented the development of financial
monopolies. As Hilaire Belloc states, "Above all, most jealously did the guild safeguard the
division of property, so that there should be formed within its ranks no proletariat upon the
one side, and no monopolizing capitalist upon the other."15
B) Chesterbelloc and Distributism
It was in the early years of this century, that Hilaire Belloc and G.K. Chesterton, joined
by a former Socialist Arthur Penty, inspired by Rerum Novarum, attempted to articulate an
economic system which stood on a totally different set of principles than did the "new things"
of capitalism and socialism. The name they gave to this system, Distributism, awkward as they
themselves realized, expressed not the socialist idea of the confiscation of all private
property, but rather, the wide-spread distribution of land, real-property, the means of
production, and of financial capital, amongst the greater part of the families of a nation.
Such a concept, along with their encouragement of the guild system, of a return to the agrarian
life, and of their condemnation of the taking of interest on non-productive loans, formed the
core of this "new" economic model.
In his book Economics for Helen, Belloc identifies the nature of the Distributist State by
distinguishing this type of state and social and economic system from that of the Servile State
and the Capitalist State. The Servile State is the one of classical antiquity, in which vast
masses of the people work as slaves for the small class of owners. In this way, the economic
state of antiquity is very similar to the economic system of our own time, insofar as a very
small minority possess real property, land, the means of production, and financial capital,
while the great mass of the population does not possess these goods to any significant degree.
How does Belloc distinguish the Servile State from that of the Capitalist State, in which he
counts the Britain of his own time? The difference is that, whereas the Servile State is based
on coercion to force the greater part of the population, which does not possess property, to
work for those who do, the Capitalist State employs "free" laborers who can choose to sign a
work contract with one employer or another. In the liberal Capitalist State, one is "free" to
choose to apply for work or accept work from one of the various owners of the means of
production. In return for this work, the laborer receives a wage which is a small portion of
the wealth that he produces.16
What distinguishes the Distributist State from the two States mentioned above, is that
instead of a small minority of men owning the means of production, there is a wide distribution
of property. In this regard, Belloc defines property as "the control of wealth by someone."17
Property must, then, be controlled by someone, since wealth which is not kept or used up by
someone would perish and cease to be wealth.
1) England's Journey for Distributism to Capitalism
It is Belloc's historical thesis, that it was not the industrialism of the late 18th and
early 19th centuries which brought about the rise of capitalism, but rather, England was a
capitalist state in the making long before the emergence of the railroad or the factory. The
Servile State, the state in which a small number of owners controlled the land and the men who
worked the land, was a mark of the Roman civilization which gradually transformed itself, under
the influence of the Catholic Church, into the feudal system in which the servus went from
being a "slave" who owned nothing, to being a "serf" who could retain [some] of what he
produced in the fields. The serf had the right to pass the land down to his own kin and he
could not be throw off his land. Thus, the personal security and economic and social stability
which characterized the Roman estate system, was carried over into medieval times.18
This historical movement, under the aegis of the Church, towards a man working on the land
which he himself owned, and working for his own benefit and for that of his family, came to an
end in England in the 16th century during the reign of King Henry VIII. Since the Distributist
State had grown up under the eye of Holy Mother Church, it should not be surprising that it
would end when She was attacked and surpressed. According to Belloc, it was King Henry's
confiscation of the monastery lands in England, and his action of parceling them out among his
wealthy supporters, which marked the beginning of the transformation of England from a nation
in which property, the land, and the means of production were widely distributed, to one in
which a small number of families control increasingly greater shares of the land. The coming of
protestantism marked the transformation of the average Englishman from independent yeoman to
tenant farmer. The concentration of wealth would occur, then, long before England would become
the industrial power of the world in the 19th century.19
2) Small is Beautiful
There can be no doubt as to the most general form of family ownership foreseen and advocated
by Belloc and Chesterton. For them, the most humane and stable economic system was one in which
a majority of families farmed land which they themselves owned, doing it with tools which were
also their own.20 Here he was following the lead of Pope Leo XIII, who in Rerum Novarum,
advocates a similar aim: "We have seen therefore that this great labor question cannot be
solved save by assuming as a principle that private ownership must be held sacred and
inviolable. The law, therefore, should favor ownership and its policy should be to induce as
many as possible to obtain a share in the land, the gulf between vast wealth and sheer poverty
will be bridged... A further consequence will be the greater abundance of the fruits of the
earth. Men always work harder and more readily when they work on that which belongs to them;
nay, and those that are dear to them. . . men would cling to the country of their birth, for no
one would exchange his country for a foreign land if his own afforded him the means of living a
decent and happy life."21
Being Englishmen, the idea that the land meant wealth was inevitably ingrained in their
conception of economics. Ownership of the land by the families who themselves worked the land
would also mean financial stability, no fear of unemployment, a family enterprise which could
engage, in some measure, all members, an ability to put aside food and supplies to create a
hedge against destitution, a way of providing not only for one's children but for one's
children's children, along with creating an economic structure which is not oriented towards
corporate profits but towards providing for familial subsistence and a local market. Belloc
speaks of this type of Distributist economy as the one most general throughout the history of
mankind, with the possible exception of the slave economy. Capitalism and Socialism are
certainly recent interlopers on the human economic scene.22
Next we must address the ways in which such a Distributist idea can be implemented on the
personal and community level. In this regard, our next article will focus on the concept of a
"parallel economy" formed by those who wish to begin to implement the economic teachings of
Rerum Novarum and Quadragesimo Anno, along with focusing on the agrarian idea both as Catholic
thought and human good sense.
"... At least in nature, "smart" parasites may perform helpful functions, such as helping their host find food. But as the host weakens, the parasite lays eggs, which hatch and devour the host, killing it. That is what predatory finance is doing to today's economies. It's stripping assets, not permitting growth or even letting the economy replenish itself. ..."
"... MH: The financial sector is a rentier sector – external to the "real" economy of production and consumption, and therefore a form of overhead. As overhead, it should be a subtracted from GDP. ..."
"... In the name of saving "the market," the Fed and ECB therefore overruled the market. Today, over 80 percent of U.S. home mortgages are guaranteed by the Federal Housing Authority. Banks won't make loans without the government picking up the risk of non-payment. So bankers just pretend to be free market. That's for their victims. ..."
"... The "flight to security" is a move out of the stock and bond markets into government debt. Stocks and bonds may go down in price, some companies may go bankrupt, but national governments can always print the money to pay their bondholders. Investors are mainly concerned about keeping whatthey have – security of principal. They are willing to be paid less income in exchange for preserving what they have taken. ..."
"... But the way Wall Street administrators at the Treasury and Fed plan the crisis is for small savers to lose out to the large institutional investors. So the bottom line that I see is a slow crash. ..."
"... U.S. diplomats radically changed IMF lending rules as part of their economic sanctions imposed on Russia as result of the coup d'état by the Right Sector, Svoboda and their neo-Nazi allies in Kiev. The ease with which the U.S. changed these rules to support the military coup shows how the IMF is simply a tool of President Obama's New Cold War policy. ..."
"... The main financial innovation by Apple has been to set up a branch office in Ireland and pretend that the money it makes in the Untied States and elsewhere is made in Ireland – which has only a 15 percent income-tax rate ..."
"... It would seem to be an anomaly to borrow from banks and pay dividends. But that is the "cannibalism" stage of modern finance capitalism, U.S.-style. For the stock market as a whole, some 92 percent of earnings recently were used to pay dividends or for stock buybacks. ..."
Michael Hudson: The financial sector today is decoupled from industrialization. Its main
interface with industry is to provide credit to corporate raiders. Their objective isasset
stripping, They use earnings to repay financial backers (usually junk-bond holders), not to
increase production. The effect is to suck income from the company and from the economy to pay
financial elites.
These elites play the role today that landlords played under feudalism. They levy interest
and financial fees that are like a tax, to support what the classical economists called
"unproductive activity." That is what I mean by "parasitic."
If loans are not used to finance production and increase the economic surplus, then interest
has to be paid out of other income. It is what economists call a zero-sum activity. Such
interest is a "transfer payment," because it that does not play a directly productive function.
Credit may be a precondition for production to take place, but it is not a factor of
production as such.
The situation is most notorious in the international sphere, especially in loans to
governments that already are running trade and balance-of-payments deficits. Power tends to
pass into the hands of lenders, so they lose control – and become less democratic.
To return to my use of the word parasite, any exploitation or "free lunch" implies a host.
In this respect finance is a form of war, domestically as well as internationally.
At least in nature, "smart" parasites may perform helpful functions, such as helping their
host find food. But as the host weakens, the parasite lays eggs, which hatch and devour
the host, killing it. That is what predatory finance is doing to today's economies. It's
stripping assets, not permitting growth or even letting the economy replenish itself.
The most important aspect of parasitism that I emphasize is the need of parasites to control
the host's brain. In nature, a parasite first dulls the host's awareness that it is being
attacked. Then, the free luncher produces enzymes that control the host's brain and make it
think that it should protect the parasite – that the outsider is part of its own body,
even like a baby to be specially protected.
The financial sector does something similar by pretending to be part of the industrial
production-and-consumption economy. The National Income and Product Accounts treat the
interest, profits and other revenue that Wall Street extracts – along with that of the
rentier sectors it backs (real estate landlordship, natural resource extraction and
monopolies) – as if these activities add to Gross Domestic Product. The reality is that
they are a subtrahend, a transfer payment from the "real" economy to the Finance, Insurance and
Real Estate Sector. I therefore focus on this FIRE sector as the main form of economic overhead
that financialized economies have to carry.
What this means in the most general economic terms is that finance and property ownership
claims are not "factors of production." They are external to the production process. But they
extract income from the "real" economy.
They also extract property ownership. In the sphere of public infrastructure – roads,
bridges and so forth – finance is moving into the foreclosure phase. Creditors are trying
to privatize what remains in the public domains of debtor economies. Buyers of these assets
– usually on credit – build interest and high monopoly rents into the prices they
charge.
JR: What is your vision for the next few decades of the global economy?
MH: The financial overhead has grown so large that paying interest, amortization and fees
shrinks the economy. So we are in for years of debt deflation. That means that people have to
pay so much debt service for mortgages, credit cards, student loans, bank loans and other
obligations that they have less to spend on
goods and services. So markets shrink. New investment and employment fall off, and the economy
is falls into a downward spiral.
My book therefore
devotes a chapter to describing how debt deflation works. The result is a slow crash. The
economy just gets poorer and poorer. More debtors default, and their property is transferred to
creditors. This happens not only with homeowners who fall into arrears, but also corporations
and even governments. Ireland and Greece are examples of the kind of future in store for
us.
Financialized economies tend to polarize between creditors and debtors. This is the dynamic
that Thomas Piketty leaves out of his book, but his statistics show that all growth in income
and nearly all growth in wealth or net worth has accrued to the One Percent, almost nothing for
the 99 Percent.
Basically, you can think of the economy as the One Percent getting the 99 Percent
increasingly into debt, and siphoning off as interest payments and other financial charges
whatever labor or business earns. The more a family earns, for instance, the more it can borrow
to buy a nicer home in a better neighborhood – on mortgage. The rising price of housing
ends up being paid to the bank – and over the course of a 30-year mortgage, the banker
receives more in interest than the seller gets.
Economic polarization is also occurring between creditor and debtor nations. This
issplitting the eurozone between Germany, France and the Netherlands in the creditor camp,
against Greece, Spain, Portugal, Ireland and Italy (the PIIGS) falling deeper into debt,
unemployment and austerity – followed by emigration and capital flight.
This domestic and international polarization will continue until there is a political fight
to resist the creditors. Debtors will seek to cancel their debts. Creditors will try to
collect, and the more they succeed, the more they will impoverish the economy.
Background
JR: Let's talk about your history, why did you become an economist?
MH: I started out wanting to be a musician – a composer and conductor. I wasn't very
good at either, but I was a very good interpreter, thanks to working with Oswald Jonas in
Chicago studying the musical theories of Heinrich Schenker. I got my sense of aesthetics from
music theory, and also the idea of modulation from one key to another. It is dissonance that
drives music forward, to resolve in a higher key or overtone.
When I was introduced to economics by the father of a schoolmate, I found it as aesthetic as
music, in the sense of a self-transforming dynamic through history by challenge and response or
resolution. I went to work for banks on Wall Street, and was fortunate enough to learn about
how central mortgage lending and real estate were for the economy. Then, I became Chase
Manhattan's balance-of-payments economist in 1964, and got entranced with tracing how the
surplus was buried in the statistics – who got it, and what they used it for. Mainly the
banks got it, and used it to make new loans.
I viewed the economy as modulating from one phase to the next. A good interpretation would
explain history. But the way the economy worked was nothing like what I was taught in school
getting my PhD in economics at New York University. So I must say, I enjoyed contrasting
reality with what I now call Junk Economics.
In mainstream textbooks there is no exploitation. Even fraudulent banks, landlords and
monopolists are reported as "earning" whatever they take – as if they are contributing to
GDP. So I found the economics discipline ripe for a revolution.
JR: What is the difference between how economics is taught vs. what you learned in your
job?
MH: For starters, when I studied economics in the 1960s there was still an emphasis on the
history of economic thought, and also on economic history. That's gone now.
One can easily see why. Adam Smith, John Stuart Mill and other classical economists sought
to free their societies from the legacy of feudalism: landlordism and predatory finance, as
well as from the monopolies that bondholders had demanded that governments create as a means of
paying their war debts.
Back in the 1960s, just like today, university courses did not give any training in actual
statistics. My work on Wall Street involved National Income and Product Accounts and the
balance-of-payments statisticspublished by the Commerce Department every three months, as well
as IMF andFederal Reserve statistics. Academic courses didn't even make reference to accounting
– so there was no conceptualization of "money," for instance, in terms of the liabilities
side of the balance sheet.
New York University's money and banking course was a travesty. It was about helicopters
dropping money down – to be spent on goods and services, increasing prices. There was no
understanding that the Federal Reserve's helicopter only flies over Wall Street, or that banks
create money on its own computers. It was not even recognized that banks lend to customers
mainly to buy real estate, or speculate in stocks and bonds, or raid companies.
Economics is taught like English literature. Teachers explain the principle of "suspension
of disbelief." Readers of novels are supposed to accept the author's characters and setting. In
economics, students are told to accept just-pretend parallel universe assumptions, and then
treat economic theory as a purely logical exercise, without any reference to the world.
The switch from fiction to reality occurs by taking the policy conclusions of these
unrealistic assumptions as if they do apply to the real world: austerity, trickle-down
economics shifting taxes off the wealthy, and treating government spending as "deadweight" even
when it is on infrastructure.
The most fictitious assumption is that Wall Street and the FIRE sector add to
output, rather than extracting revenue from the rest of the economy.
JR: What did you learn in your work on the US oil industry?
MH: For starters, I learned how the oil industry became tax-exempt. Not only by the
notorious depletion allowance, but by offshoring profits in "flags of convenience" countries, in
Liberia and Panama. These are not real countries. They do not have their own currency, but use
U.S. dollars. And they don't have an income tax.
The international oil companies sold crude oil at low prices from the Near East or Venezuela
to Panamanian or Liberian companies – telling the producing countries that oil was not
that profitable. These shipping affiliates owned tankers, and charged very high prices to
refineries and distributors in Europe or the Americas. The prices were so high that these
refineries and other "downstream" operations marketing gas to consumers did not show a profit
either. So they didn't have to pay European or U.S. taxes. Panama and Liberia had no income tax.
So the global revenue of the oil companies was tax-free.
I also learned the difference between a branch and an affiliate. Oil wells and oil fields
are treated as "branches," meaning that their statistics are consolidated with the head office
in the United States. This enabled the companies to take a depletion allowance for emptying out
oil fields abroad as well as in the United States.
My statistics showed that the average dollar invested by the U.S. oil industry was returned
to the United States via balance-of-payments flows in just 18 months. (This was not a profit
rate, but a balance-of-payments flow.) That finding helped the oil industry get exempted from
President Lyndon Johnson's "voluntary" balance-of-payments controls imposed in 1965 when the
Vietnam War accounted for the entire U.S. payments deficit. Gold was flowering out to France,
Germany and other countries running payments surpluses.
The balance-of-payments accounting format I designed for this study led me to go to work for
an accounting firm, Arthur Andersen, to look at the overall U.S. balance of payments. I found
that the entire deficit was military spending abroad, not foreign aid or trade.
Junk Economics
JR: Why do you think there is a disconnect between academic economic theory and the way
that international trade and finance really works?
MH: The aim of academic trade theory is to tell students, "Look at the model, not at how
nations actually develop." So of all the branches of economic theory, trade theory is the most
wrongheaded.
For lead nations, the objective of free trade theory is to persuade other countries not to
protect their own markets. That means not developing in the way that Britain did under its
mercantilist policies thatmade it the first home of the Industrial Revolution. It means not
protecting domestic industry, as the United States and Germany did in order to catch up with
British industry in the 19 th century and overtake it in theearly 20 th
century.
Trade theorists start with a conclusion: either free trade or (in times past) protectionism.
Free trade theory as expounded by Paul Samuelson and others starts by telling students to
assume a parallel universe – one that doesn't really exist. The conclusion they start
with is that free trade makes everyone's income distribution between capital and labor similar.
And because the world has a common price for raw materials and dollar credit, as well as for
machinery, the similar proportions turn out to mean equality. All the subsequent assumptions
are designed to lead to this unrealistic conclusion.
But if you start with the real world instead of academic assumptions, you see that the world
economy is polarizing. Academic trade theory can't explain this. In fact, it denies that
today's reality can be happening at all!
A major reason why the world is polarizing is because of financial dynamics between creditor
and debtor economies. But trade theory starts by assuming a world of barter. Finally, when the
transition from trade theory to international finance is made, the assumption is that countries
running trade deficits can "stabilize" by imposing austerity, by lowering wages, wiping out
pension funds and joining the class war against labor.
All these assumptions were repudiated already in the 18 th century, when Britain
sought to build up its empire by pursuing mercantilist policies. The protectionist American
School of Economics in the 19 th century put forth the Economy of High Wages
doctrine to counter free-trade theory. None of this historical background appears in today's
mainstream textbooks. (I provide a historical survey in Trade, Development and
Foreign Debt , new ed., 2002. That book summarizes my course in international trade
and finance that I taught at the New School from 1969 to 1972.)
In the 1920s, free-trade theory was used to insist that Germany could pay reparations far
beyond its ability to earn foreign exchange. Keynes, Harold Moulton and other economists
controverted that theory. In fact, already in 1844, John Stuart Mill described how paying
foreign debts lowered the exchange rate. When that happens, what is lowered is basically wages.
So what passes for today's mainstream trade theory is basically an argument for reducing wages
and fighting a class war against labor.
You can see this quite clearly in the eurozone, above all in the austerity imposed on
Greece. The austerity programs that the IMF imposed on Third World debtors from the 1960s
onward. It looks like a dress rehearsal to provide a cover story for the same kind of
"equilibrium economics" we may see in the United States.
JR: Can the US pay its debts permanently? Does the amount of federal debt, $18 or $19
trillion even matter? Should we pay down the national debt?
MH: It is mainly anti-labor austerity advocates who urge balancing the budget, and even to
run surpluses to pay down the national debt. The effect must be austerity.
A false parallel is drawn with private saving. Of course individuals should get out of debt
by saving what they can. But governments are different. Governments create money and spend it
into the economy by running budget deficits. The paper currency in your pocket is technically a
government debt. It appears on the liabilities side of the public balance sheet.
When President Clinton ran a budget surplus in the late 1990s, that sucked revenue
out of the U.S. economy. When governments do not run deficits, the economy is
obliged to rely on banks – which charge interest for providing credit. Governments can
create money on their own computers just as well. They can do this without having to pay
bondholders or banks.
That is the essence of Modern Monetary Theory (MMT). It is elaborated mainly at the
University of Missouri at Kansas City (UMKC), especially by Randy Wray – who has just
published a number of books on money – and Stephanie Kelton, whom Bernie Sanders
appointed as head of the Senate Democratic Budget Committee.
If the government were to pay off its debts permanently, there would be no money –
except for what banks create. That has never been the case in history, going all the way back
to ancient Mesopotamia. All money is a government debt, accepted in payment of taxes
This government money creation does not mean that governments can pay foreign
debts. The danger comes when debts are owed in a foreign currency. Governments are unable to
tax foreigners. Paying foreign debts puts downward pressure on exchange rates. This leads to
crises, which often end by relinquishing political control to the IMF and foreign banks. They
demand "conditionalities" in the form of anti-labor legislation and privatization.
In cases where national economies cannot pay foreign debts out of current
balance-of-payments revenue, debts should be written down, not paid off. If they are not
written down, you have the kind of austerity that is tearing Greece apart today.
JR: You say that mainstream economic theory and academic study is pro-creditor? Why is
this the case?
MH: Thorstein Veblen pointed out that vested interests are the main endowers and backers of
the higher learning in America. Hardly by surprise, they promote a bankers'-eye view of the
world. Imperialists promote a similar self-serving worldview.
Economic theory, like history, is written by the winners. In today's world that means the
financial sector. They depict banks as playing a productive role, as if loans are made to help
borrowers earn the money to pay interest and still keep something for themselves. The pretense
is that banks finance industrial capital formation, not asset stripping.
What else would you expect banks to promote? The classical distinction between productive
and unproductive (that is, extractive) loans is not taught. The result has been to turn
mainstream economics as a public-relations advertisement for the status quo, which meanwhile
becomes more and more inequitable and polarizes the economy.
JR: What can be learned by studying the history of economic thought? What did Adam Smith
and the people in his era and those which followed him understand that would be useful to us
now?
MH: If you read Adam Smith and subsequent classical economists, you see that their main
concern was to distinguish between productive and unproductive economic activity. They wanted
to isolate unproductive rentier income, and unproductive spending and credit.
To do this, they developed the labor theory of value to distinguish value from price –
with "economic rent" being the excess of price over socially necessary costs of production.
They wanted tofree industrial capitalism from the legacy of feudalism: tax-like groundrent paid
to a hereditary landed aristocracy. They also opposed the monopolies that bondholders had
insisted that governments create to sell off to pay the public debt. That was why the East
India Company and the South Sea Company were created with their special privileges.
Smith and his followers are applauded as the founding fathers of "free market" economics.
But they defined free markets in a diametrically opposite way from today's self-proclaimed
neoliberals. Smith and other classical economists urged markets free from economic
rent.
These classical reformers realized that progressive taxation to stop favoring
rentiers required a government strong enough to take on society's most powerful and
entrenched vested interests. The 19 th -century drive for Parliamentary reform in
Britain aimed at enabling the House of Commons to override the House of Lords and tax the
landlords. (This rule finally passed in 1910 after a constitutional crisis.) Now there has been
a fight by creditors to nullify democratic politics, most notoriously in Greece.
Today's neoliberals define free markets as those free for rent-seekers and
predatory bankers from government regulation and taxes.
No wonder the history of economic thought has been stripped away from the curriculum.
Reading the great classical economists would show how the Enlightenment's reform program has
been inverted. The world is now racing down a road to the Counter-Enlightenment, a neo-
rentier economy that is bringing economic growth to a halt.
JR: Why does economic thought minimize the role of debt? I.e. I read Paul Krugman and he
says the total amount of debtisn't a problem, for example you can't find the internet bust in
GDP or the 1987 crash?
MH: When economists speak of money, they neglect that all money and credit is debt. That is
the essence of bookkeeping and accounting. There are always two sides to the balance sheet. And
one party's money or savings is another party's debt.
Mainstream economic models describe a world that operates on barter, not on credit. The
basic characteristic of credit and debt is that it bears interest. Any rate of interest can be
thought of as a doubling time. Already in Babylonia c. 1900 BC, scribes were taught to c
alculate compound interest, and how long it took a sum to double (5 years) quadruple (10 years)
or multiply 64 times (30 years). Martin Luther called usury Cacus, the monster that absorbs
everything. And in Volume III of Capital and also his Theories of Surplus
Value , Marx collected the classical writings about how debts mount up at interest by
purely mathematical laws, without regard for the economy's ability to pay.
The problem with debt is not only interest. Shylock's loan against a pound of flesh was a
zero-interest loan. When crops fail, farmers cannot even pay the principal. They then may lose
their land, which is their livelihood. Forfeiture is a key part of the credit/debt dynamic. But
the motto of mainstream neoliberal economics is, "If the eye offends thee, pluck it out."
Discussing the unpayability of debt is offensive to creditors.
Anyone who sets out to calculate the ability pay quickly recognizes that the overall volume
of debts cannot be paid. Keynes that made point in the 1920s regarding Germany's inability to
pay reparations.
Needless to say, banks and bondholders do not want to promote any arguments explaining the
limits to how much can be paid without pushing economies into depression. That is what my
Killing the
Host is about. It is the direction in which the eurozone is now going, and the United
States also issuffering debt deflation.
Turning to the second part of your question, Krugman and others say that debt doesn't matter
because "we owe it to ourselves." But the "we" who owe it are the 99 Percent; the people who
are "ourselves" are the One Percent. So the 99 Percent Owe the One Percent. And they owe more
and more,thanks to the "magic of compound interest."
Krugman has a blind spot when it comes to understanding money. In his famous debate with
Steve Keen, he denied that banks create money or credit. He insists that commercial banks only
lend out deposits. But Keen and the Modern Monetary Theory (MMT) school show that loans
create deposits , not the other way around. When a banker writes a loan on his computer
keyboard, he creates a deposit as the counterpart.
Endogenous money is easily created electronically. That privilege enables banks to charge
interest. Governments could just as easily create money on their own computers. Neoliberal
privatizers want to block governments from doing this, so that economies will have to rely on
commercial banks for the money and credit they need to grow.
The mathematics of compound interest means that economies can only pay their debts by
creating a financial bubble – more and more credit to bid up asset prices for real
estate, stocks and bonds, enabling banks to make larger loans. Today's economies are obliged to
develop into Ponzi schemes to keep going – until they collapses\ in a crash.
JR: The models of the macroeconomy to forecast the future and to develop policy at
institutions like the IMF, often consider finance and banking as just another sector of
industry, like construction or manufacturing. How do these institutions consider their model of
the financial sector?
MH: The IMF acts as the collection agent for global bondholders. Its projections begin by
assuming that all debts can be paid, if economies will cut wages and wiping out pension funds
so as to pay banks and bondholders.
As long as creditors remain in control, they are quite willing to sacrifice the 99 Percent
to pay the One Percent. When IMF "stabilization" programs end up destabilizing their hapless
victims, mainstream media blame the collapse on the debtor country for not shedding enough
blood to impose even more austerity.
Economists often define their discipline as "the allocation of scarce resources among
competing ends." But when resources or money really become scarce, economists call it
a crisis and say that it's a question for politicians, not their own department. Economic
models are only marginal – meaning, small changes, not structural.
The only trend that does grow inexorably is that of debt. The more it grows, the
more it slows the "real" economy of production and consumption. So something must give: either
the economy, or creditor claims. And that does indeed change the structure of the economy. It
is a political as well as an economic change.
Regarding the second part of your question – how creditor institutions model the
financial sector – when they look at prices they only consider wages and consumer prices,
not asset prices. Yet most bank credit is tied to asset prices, because loans are made to buy
homes or commercial real estate, stocks or bonds, not bread and butter.
Not looking at what is obviously important requires a great effort of tunnel vision. But as
Upton Sinclair noted, there are some jobs – like being a central banker, or a New
York Times editorial writer – that require the applicant not to understand
the topic they are assigned to study. Hence, you have Paul Krugman on money and banking, the
IMF on economic stabilization, and Rubinomics politicians on bailing out the banks instead of
saving the economy.
If I can add a technical answer: The IMF does not recognize that the "budget problem"
– squeezing domestic currency out of the economy by taxing wages and industry – is
quite different from the "transfer problem" of converting this money into foreign exchange.
That distinction was the essence of the German reparations debate in the 1920s. It is a focus
of my history of theories of Trade, Development and
Foreign Debt .
Drawing this distinction shows why austerity programs do not help countries pay their
foreign debt, but tears them apart and induces emigration and capital flight.
JR: Does the financial sector add to GDP?
MH: The financial sector is a rentier sector – external to the "real" economy
of production and consumption, and therefore a form of overhead. As overhead, it should be a
subtracted from GDP.
JR: In the way that oil industry funded junk science on global warming denial, Wall
Street funds and endows junk economics and equilibrium thinking?
Falling on your face is a state of equilibrium. So is death – and each moment of
dying. Equilibrium is simply a cross section in time. Water levels 20 or 30 feet higher would
be another form of equilibrium. But to the oil industry, "equilibrium" means their earnings
continuing to grow at the present rate, year after year. This involves selling more and more
oil, even if this raises sea levels and floods continents. That is simply ignored as not
relevant to earnings. By the time that flooding occurs, today's executives will have taken
their bonuses and capital gains and retired.
That kind of short-termism is the essence of junk economics. It is tunnel-visioned.
What also makes economics junky is assuming that any "disturbance" sets in motion
countervailing forces that return the economy to its "original" state – as if this were
stable, not moving down the road to debt peonage and similar economic polarization.
The reality is what systems analysts call positive feedback: When an economy gets out of
balance, especially as a result of financial predators, the feedback and self-reinforcing
tendencies push it further and further out of balance.
My trade theory book traced the history of economists who recognize this. Once a class or
economy falls into debt, the debt overhead tends to grow steadily until it stifles market
demand and subjects the economy to debt deflation. Income is sucked upward to the creditors,
who then foreclose on the assets of debtors. This shrinks tax revenue, forcing public budgets
into deficit. And when governments are indebted, they becomemore subject to pressure to
privatization of public enterprise. Assets are turned over to monopolists, who further shrink
the economy by predatory rent seeking.
An economy going bankrupt such as Greece and having to sell off its land, gas rights, ports
and public utilities is "in equilibrium" at any given moment that its working-age population is
emigrating, people are losing their pensions and suffering.
When economists treat depressions merely as self-curing "business downturns," they are
really saying that no government action is required from "outside" "the market" to rectify
matters and put the economy back on track to prosperity. So equilibrium thinking isbasically
anti-government libertarian theory.
But when banks are subjected to "equilibrium" by writing down debts in keeping with the
ability of borrowers to pay, WallStreet's pet politicians and economic journalists call this a
crisis and insist that the banks and bondholders must be saved or there will be a crisis. This
is not a solution. It makes the problem worse and worse.
There is an alternative, of course. That is to understand the dynamics at work transforming
economic and socialstructures. That's what classical economics was about.
The post-classical revolution was marginalist. That means that economists only look at small
changes, not structural changes. That isanother way of saying that reforms are not necessary
– because reforms change structures, not merely redistribute a little bit of income as a
bandage.
What used to be "political economy" gave way to just plain "economics" by World War I. As it
became increasingly abstract and mathematical, students who studied the subject because they
wanted to make the world better were driven out, into other disciplines. That was my experience
teaching at the New School already nearly half a century ago. The discipline has become much
more tunnel-visioned since then.
Present state of financial world
JR: We see around the world something like 25% of all national debt is now has a yield
priced in negative interest rates? What does this mean? Do you see this continuing?
MH: On the one hand, negative interest rates reflect a flight to security by investors. They
worry that the debts can't be paid and that there are going to be defaults.
They also see that the United States and Europe are in a state of debt deflation, where
people and businesses have to pay banks instead of spending their income on goods and services.
So markets shrink, sales and profits fall, and the stock market turns down.
This decline was offset by the Federal Reserve and the European Central Bank trying to
re-inflate the Bubble Economy by Quantitative Easing – providing reserves to the banks in
exchange for their portfolio of mortgages and other loans. Otherwise, the banks would have had
to sell these loans in "the market" at falling prices.
In the name of saving "the market," the Fed and ECB therefore overruled the market. Today,
over 80 percent of U.S. home mortgages are guaranteed by the Federal Housing Authority. Banks
won't make loans without the government picking up the risk of non-payment. So bankers just
pretend to be free market. That's for their victims.
The "flight to security" is a move out of the stock and bond markets into government debt.
Stocks and bonds may go down in price, some companies may go bankrupt, but national governments
can always print the money to pay their bondholders. Investors are mainly concerned about
keeping whatthey have – security of principal. They are willing to be paid less income in
exchange for preserving what they have taken.
Here's the corner that the economy has backed itself into. The solution to most problems
creates new problems – blowback or backlash, which often turn out to be even bigger
problems. Negative interest rates mean that pension funds cannot invest in securities that
yield enough for them to pay what they have promised their contributors. Insurance companies
can't earn the money to pay their policyholders. So something has to give.
There will be breaks in the chain of payments. But the way Wall Street administrators at the
Treasury and Fed plan the crisis is for small savers to lose out to the large institutional
investors. So the bottom line that I see is a slow crash.
JR: Could there be a more symbiotic relationship with global financial institutions? For
money to have value, doesn't it need a functioning economy, rather than an
entirelyfinancialized one?
MH: Money is debt. It is a claim on some debtor. Government money is a claim by its
holder on the government, settled by the government accepting it as payment for tax debts.
Being a claim on a debtor, money does not necessarily need a functioning economy. It can be
part of a foreclosure process, transferring property to creditors. A financialized economy
tends to strip the economy of money, by sucking up to the creditor One Percent on top. That
is what happened in Rome, and the result was the Dark Age.
JR: In 2007/2008 we had a subprime crash and since 2014 we've had a commodities crash
where oil prices are low, is this because of what's going on in emerging market economies? Are
emerging market economies and China the next subprime?
MH: The current U.S. and Eurozone depression isn't because of China. It's because of
domestic debt deflation. Commodity prices and consumer spending are falling, mainly because
consumers have to pay most of their wages to the FIRE sector for rent or mortgage payments,
student loans, bank and credit card debt, plus over 15 percent FICA wage withholding for Social
Security and Medicare (actually, to enable the government to cut taxes on the higher income
brackets), as well income and sales taxes. After all this is paid, consumers don't have that
much left to spend on commodities. So of course commodity prices are crashing.
Oil is a special case. Saudi Arabia is trying to drive U.S. fracking rivals out of business,
while also hurting Russia. This lowers gas prices for U.S. and Eurozone consumers, but not by
enough to spur economic recovery.
JR: You've written that we're entering a financial cold war – the IMF and the US
have been very strict on debt repayment for loans from debtor nations, but in Ukraine they've
made an exception regarding Russia, could you discuss your recent writing on that?
MH: U.S. diplomats radically changed IMF lending rules as part of their economic sanctions
imposed on Russia as result of the coup d'état by the Right Sector, Svoboda and their
neo-Nazi allies in Kiev. The ease with which the U.S. changed these rules to support the
military coup shows how the IMF is simply a tool of President Obama's New Cold War policy.
The
aim was to enable the IMF to keep lending to the military junta even though Ukraine is in
default of its $3 billion debt to Russia, even though it refuses to negotiate payment, and even
though IMF money has been used to fund kleptocrats such as Kolomoisky to field his own army
against Russian speakers in Donbas. Ukraine has no foreseeablemeans of paying off the IMF and
other creditors, given its destruction of its export industry in the East. My articles on this
are on my website, michael-hudson.com
.
JR: Today's economy has some truly amazing technology from companies like Apple, but
Apple is also example of financial engineering, you outline this in your book, what financial
innovations havebeen associated with the story of Apple's stock?
MH: The main financial innovation by Apple has been to set up a branch office in Ireland and
pretend that the money it makes in the Untied States and elsewhere is made in Ireland –
which has only a 15 percent income-tax rate
The problem is that if Apple remits this income back to the United States, it will have to
pay U.S. income tax. It wants to avoid this – unless Wall Street can convince politicians
to declare a "tax holiday" would let tax avoiders bring all their foreign money back to the
United States "tax free." That would be a tax amnesty only for the very wealthy, not for the 99
Percent.
JR: This tax angle explains why Apple, almost the wealthiest company in the world, has
been urged by activist shareholders to borrow. Why should the richest company have to go into
debt?
MH: The answer is that Apple can borrow from U.S. banks at a low interest rate to pay
dividends on its stock, instead of paying these dividends by bringing its income back home and
paying the taxes that are due.
It would seem to be an anomaly to borrow from banks and pay dividends. But that is the
"cannibalism" stage of modern finance capitalism, U.S.-style. For the stock market as a whole,
some 92 percent of earnings recently were used to pay dividends or for stock buybacks.
JR: What is the eventual outcome of all theses corporate buybacks to pump up share
prices?
MH: The problem with a company using its revenue simply to buy its own shares to support
their price (and hence, enable CEOs to increase their salaries and bonuses, and make more
capital gains on their stock options) is that the price fillip is temporary. Last year saw the
largest volume of U.S. stock buybacks on record. But since January 1, the market has fallen by
about 20 percent. The debts that companies took on to buy stocks remain in place; and the
earnings that companies used to buy these stocks are now gone.
Corporations did not use their income to invest in long-term expansion. The financial time
frame always has been short-term. Projects with long-term paybacks are cut back, because CEOs
and financial managers simply want to take their money and run. That is the financial
mentality.
JR: What is the outcome of all theses corporate buybacks to pump up share
prices?
MH: When the dust settles, companies financialized in this way are left as debt-leveraged
shells. CEOs then go to their labor unions and threaten to declare bankruptcy if the unions
don't scale back their pension demands. So there is a deliberate tactic to force companies into
debt for short-term earnings and stock-price gains in the short term, and a more intensive
class war against present and past employees and pensioners as a longer-term policy.
JR: Why do business schools endorse of financialization? Reversing
short-termism?
MH: The financial sector is the major endower of business schools. They have become training
grounds for Chief Financial Officers. AtHarvard, Prof. Jensen reasoned that managers should aim
at serving stockholders, not the company as such. The result was an "incentive" system tying
management bonuses to the stock price. So naturally, CFOs used corporate earnings for stock
buybacks and dividend payouts that provided a short-term jump in the stock price.
The ideological foundation of today's business schools is that economic control should be
shifted out of government hands into those of financial managers – that is, Wall Street.
That is their idea of freeenterprise. Its inevitable tendency is to end in more centralized
planning by Wall Street than in Washington.
The aim of this financial planning is quite different from that of governments. As I wrote
in Killing the
Host : "The euro and the ECB were designed in a way that blocks government money
creation for any purpose other than to support the banks and bondholders. The financial sector
takes over the role of economic planner, putting its technicians in charge of monetary and
fiscal policy without democratic voice or referendums over debt and tax policies."
Financial planning always has been short-term. That is why planning should not be consigned
to banks and bondholders. Their mentality is extractive, and that ends up hit-and-run. What
passes for mainstream financial analysis is simply to add up how much is owed and demand
payment, not help the economy grow. To financial managers, economic prosperity and unemployment
is an "externality" – that is, not part of the equation that they are concerned with.
Future
JR: The story of Greece in recent years is relevant to our discussion because the
political party Syriza took over with ideas that were traditionally representing the left? Does
the body of traditional left ideas have the ability to solve some of the challenges regarding
financial warfare?
MH: The left and former Social Democratic or Labour parties have dome to focus on political
and cultural issues, not the economic policy that led to their original creation. What is
lacking is a focus on rent theory and financial analysis. Part of the explanation probably is
covert U.S. funding and sponsorship of Blair-type neoliberals.
The eurozone threatened Greece with domestic destabilization if it did not surrender to the
Troika's demands. Syriza's leaders worried that the ensuing turmoil would bring a right-wing
neo-Nazi group such as Golden Dawn into power, or a military dictatorship as a client oligarchy
for U.S. and German neoliberals.
So the political choice today is much like the 1930s, when the global economy also broke
down. The choice is between nationalism and populism on the right, or socialism reviving what
used to be left-wing politics.
JR: Could there be a debt write down? Isn't someone's debts another person's savings, i.e.
pension funds, 401k, retirement funds?
MH: The problem is indeed that one party's debt finds its counterpart in some other party's
savings. Not paying debts therefore involves annulling some other party's financial claims on
the debtor. What happens to the savings on the other side of the savings/debt balance
sheet?
JR: The political question is, who will lose first?
MH: The answer is, the least politically protected. The end game is "Big fish eat little
fish." Pension funds are in the front line of sacrifice, while government bondholders are the
most secure. Greek pensionsalready have been written down, and the savings of U.S. pension
funds, Social Security and other social programs are the first to be annulled.
The only way to achieve a fair debt cancellation is to write down the debts of the
wealthiest, not the most needy. That is the opposite of how matters are being resolved today.
That is why southern Europe is being radicalized over the debt issue.
JR: Will financialized economies implode? Leaving the non-financialized ones?
MH: The One Percent who hold most of the economy's savings are quite willing to plunge
society into depression to collect on their savings claims. Their greed is why we are in an
economic war much like Rome's Conflict of the Orders that shaped the Republic, and its century
of civil war between creditors and debtors, 133-29 BC.
Argentina has been imploding, just as Third World debtors were obliged to do when they
accepted IMF austerity programs and "conditionalities" for loans to keep their currencies from
depreciating. To avoid being forced to adopt such self-defeating and anti-democratic policies,
it looks like countries will have to move out of the U.S. and Eurozone orbit into that of the
BRICS. That is why today's financial crisis is leading to a New Cold War. It is as much
financial as it is military.
JR: How would you advise a politician to restore prosperity in the future?
MH: The problem is who to give advice to. Most politicians today – at least in the
United States – are proxies for their campaign contributors. President Obama is basically
a lobbyist for his Wall Street in the Democratic Party's Robert Rubin gang. That kind of
demagogue wouldn't pay any attention to policies that I or other economists would make. Their
job is not to make the economy better, but to defend their campaign contributors among the One
Percent at the economy's expense.
But when I go to China or Russia, here's what I advise (without much success so far, I
admit):
First, tax land rent and other economic rent. Make it the tax base. Otherwise, this rental
value will end up being pledged to banks as interest on credit borrowed to buy rent-yielding
assets.
Second, make banks into public utilities. Credit creation is like land or air: a monopoly
created by society. As organs of public policy they would not play the derivatives casino, or
make corporatetakeover loans to raiders, or falsify mortgage documents.
Third, do not privatize basic utilities. Public ownership enables basic services to be
provided at cost, on a subsidized basis, or freely. That will make the economy more
competitive. The cost of upgrading public infrastructure can be defrayed by basing the tax
system on economic rent, not wages.
Does it have to be this way ?
The Eurozone die is cast. Countries must withdraw from the euro so that governments can
create their own money once again, and resist creditor demands to carve up and privatize their
public domain.
For the United States, I don't see a concerted alternative to neoliberalism squeezing more
and more interest and rent out of the economy, making the present slump even deeper in
debt.
How won't debts be paid?
There are two ways not to pay debts: either by annulling or repudiating them, or by
foreclosure when creditors take or demand property in lieu of monetary payment.
The first way not to pay is to default or proclaim a Clean Slate. The most successful
example in modern times is the German Economic Miracle – the Allied Monetary Reform of
1948. That cancelled Germany's internal debts except for wages owed by employers, and minimum
working balances.
The United States Government has fought against creation of an international court to
adjudicate the ability of national economies to pay debts. If such a court is not
created, the global economy will fracture. That is occurring in what looks like a New Cold War
pitting the United States and its NATO satellites against the BRICS (China, Russia, South
Africa, Brazil and India) along with Iran and other debtors.
The US preferred policy is for countries to sell off whatever is in their public domain when
they lack the money to pay their debts. This is the "foreclosure" stage.
Short of these two ways of not paying debts, economies are submitting to debt deflation.
That strips income from producers and consumers, businesses and governments to pay creditors.
As the debtor economy weakens, the debt arrears mount up – often at rising interest rates
to reflect the risk of non-payment as creditors realize that there is no "business as usual'
way in which the debts can be paid.
Debtor countries may postpone the inevitable by borrowing from the IMF or U.S. Treasury to
buy out bondholders. This saves the latter from taking a loss – leaving the debtor
country with debts that are even harder to annul, because they are to foreign governments and
international institutions. That is why it is a very bad policy for countries to move from
owing money to private bondholders to owing the IMF or European Central Bank, whose demands are
unforgiving.
In the long term, debts won't be paid in the way that Rome's debts were not paid. The money
economy itself was stripped, and the empire fell into a prolonged Dark Age. That is the fate
that will befall the West if it continues to support the "rights" of creditors over the right
of nations and economies to survive.
This is a transcript from an interview on the
XE Podcast conducted by Justin Ritchie.
"... By Michal Bauer, Associate Professor of Economics, CERGE-EI and Charles University; Jana Cahlíková, Senior Research Fellow, Max Planck Institute for Tax Law and Public Finance; Dagmara Celik Katreniak, Assistant Professor, National Research University Higher School of Economics, Moscow; Julie Chytilová, Associate Professor of Economics, Charles University; Researcher, CERGE-EI; Lubomír Cingl, Assistant Professor, University of Economics, Prague; and Tomáš Želinský, Associate Professor, Technical University of Košice. Originally published at VoxEU ..."
"... The economic consensus is that groups behave in a more self-regarding way than individuals, which affects their members' decision-making. This column describes new evidence from experiments in Slovakia and Uganda that supports an alternative hypothesis from social psychology that simply being a member of a group makes us more anti-social to outsiders. Within-group cohesion in organisations may also have a dark side, fostering hostility to outsiders. ..."
Joining
a Group Makes Us Nastier to Outsiders Posted on January
5, 2019 by Yves
SmithBy Michal Bauer, Associate Professor of Economics, CERGE-EI and Charles
University; Jana Cahlíková, Senior Research Fellow, Max Planck Institute for Tax Law
and Public Finance; Dagmara Celik Katreniak, Assistant Professor, National Research University
Higher School of Economics, Moscow; Julie Chytilová, Associate Professor of Economics,
Charles University; Researcher, CERGE-EI; Lubomír Cingl, Assistant Professor, University
of Economics, Prague; and Tomáš Želinský, Associate Professor, Technical
University of Košice. Originally published at VoxEU
The economic consensus is that groups behave in a more self-regarding way than
individuals, which affects their members' decision-making. This column describes new evidence
from experiments in Slovakia and Uganda that supports an alternative hypothesis from social
psychology that simply being a member of a group makes us more anti-social to outsiders.
Within-group cohesion in organisations may also have a dark side, fostering hostility to
outsiders.
Plato wrote about the limits of democracy, as did the founding fathers of the American
constitution. More recently, social scientists have also worried about the dynamics of group
decision-making, speculating that being part of a group may increase the motivation to harm
outsiders and destroy social welfare. The causal effect of group membership on decision-making
has been prominent on the research agenda in behavioural economics in the past 20 years, partly
because so many political, military, and business decisions are made by groups rather than
individuals.
Across many laboratory experiments, a pattern has emerged. Group decisions are less
pro-social and cooperative than individual decisions. Groups are less willing to sacrifice
their resources to increase social welfare, or to achieve a fair allocation. The consensus
interpretation is that groups behave in a more self-regarding way. They are more likely to
maximise a group payoff, and disregard the welfare of others (Charness and Sutter 2012, Kugler
et al. 2012).
It is usually assumed that group members communicate among themselves, helping them to
recognise a profit-maximising strategy. This interpretation suggests that group decisions can
be modelled as more rational and less 'behavioural' than individual decisions, an important
implication for economic theory.
Why Are Groups Less Cooperative Than Individuals?
Our recent paper (Bauer et al. 2018) uses an alternative explanation for the difference in
cooperative behaviour of groups, compared to individuals. Social psychologists have a
long-standing hypothesis that simply being a member of a group may inspire aggressively
competitive anti-social behaviour (Durlauf 1999, Hewstone et al. 2002, Sambanis et al.
2012).
This hypothesis implies that groups do not cooperate less because they are self-regarding,
but because they are more inclined to cause harm to outsiders – even at a cost to
themselves. We define anti-social behaviour as non-strategic destructive behaviour that is
costly for the decision maker, reduces welfare of others, and is not a response to inequality
or a hostile behaviour of a counterpart. Experiments in previous research, including the
Prisoners' Dilemma game, Trust game, and Dictator game, were designed to measure the positive
side of human social behaviour. They do not, however, distinguish whether a lack of willingness
to cooperate or share has been caused by greater selfishness, or by this anti-social
behaviour.
These distinctions matter if one wants to predict willingness to engage in self-destructive
conflict:
Being anti-social is very different from being self-regarding. Economic agents
motivated purely by self-interest will destroy the resources of others only when they stand to
gain. But there is much more scope for harming others if they also derive utility from relative
status or feel pleasure from beating an opponent. It is also important to understand whether
simply being placed into a group creates an 'us versus them' psychology that influences
behaviour of group members, or whether the behavioural difference is an outcome of
deliberation. If the mere fact of deciding in a group makes an individual more willing to cause
harm, a broad range of situations may create an increased tendency to behave anti-socially.
Measuring Anti-Social Behaviour
Our experiments were conducted among large and diverse samples of adolescents in two very
different settings – Uganda (N=1,679) and Slovakia (N=630) – using a comparable
design. We compare the (anti-)social behaviour of individuals, and the team decision of groups
made up of three randomly selected individuals.
The experiment is designed to distinguish self-regarding from anti-social motivations, and
also to decompose the overall group effect into the effect of group decision-making, and the
effect of the group context on individual behaviour.
To do so, we complement the prisoners' dilemma game, a standard experiment to measure
willingness to cooperate, with the joy of destruction game, an experiment that uncovers
anti-social behaviour.
Also, to separate the effects of group context on individual behaviour and the effect of
group deliberation and decision-making, we elicit individual choices made in isolation,
preferences of individual group members for group decisions before a group deliberation, and
the ultimate group decisions.
Groups Behave More Anti-Socially Than Individual Decision-Makers
Groups are less likely than individuals to cooperate in the prisoners' dilemma game, in line
with findings in previous experiments. Importantly, however, they are also more likely to harm
opponents in the joy of destruction game, in which the dominant strategy for self-regarding
agents is not to engage in destructive behaviour. This is primarily due to a greater prevalence
of anti-social behaviour among groups.
The stronger anti-social behaviour of groups as compared to individuals cannot be explained
by differences in beliefs, reciprocal motives, inequality aversion or diffusion of individual
responsibility. Groups are more willing than individuals to pay to cause harm even when they
respond to a kind act from an experimental counterpart, and when destroying resources increases
inequality.
Furthermore, anti-social behaviour in a group setting is elevated simultaneously with
willingness to enter competition with outsiders, as measured in the competitiveness game in
Uganda (Niederle and Vesterlund 2007). Together, these findings indicate that individuals in
groups are more aggressively competitive.
Decomposing the overall group effects shows that both the group context as well as
deliberation among group members matter. Group context makes individuals more willing to engage
in anti-social behaviour and to compete, whereas the group decision-making slightly increases
the prevalence of self-regarding choices.
All these effects are strikingly similar across the Slovak (Figure 1) and Ugandan (Figure 2)
samples, suggesting that the preference for competing aggressively when deciding in a group is
a deeply rooted response.
Figure 1 Slovakia: The effect of group decision-making on choices in the joy of destruction
game and the prisoners' dilemma game
Source : Bauer et al. (2018).
Figure 2 Uganda: The effect of group decision-making on choices in the joy of destruction
game and the prisoners' dilemma game
Source : Bauer et al. (2018).
Concluding Remarks
Earlier research on identity has shown that creating coherent teams fosters efficiency in
military and business-oriented organisations (Akerlof and Kranton 2005, Goette et al. 2006,
Costa and Kahn 2001), by making in-group cooperation easier. Our results suggest that this may
come at the expense of aggressive competitiveness against members of other groups.
This may help to explain the ubiquity of inter-group violence (Blattman and Miguel 2014) or
mutually destructive competition within and across firms. It also strengthens the case for
policies to counteract narrow group identities.
Competitiveness also has an import role when determining individual career choices.
Economists are attempting to identify factors which may foster competitiveness in individuals
(Gneezy et al. 2009, Andersen et al. 2013, Almås et al. 2015) and design institutions that
help to close gender gaps in willingness to compete (Sutter et al. 2016, Niederle et al. 2013,
Balafoutas and Sutter 2012). Our findings show that the factor that increases willingness to
enter competitive environment also raises anti-social behaviour, and thus suggests there is a
potential trade-off. Competitive environments may lead to efficiency gains in some settings,
but also to more socially harmful behaviour.
When I want good advice on brickwork, I would ask for advice from a bricklayer. I would
certainly not go looking for advice on bricks from an upholsterer. In the same vein, if I was
looking for solid information on a sociological issue, I would not necessarily go believing
people with a background in economics or tax law & finance as is the case here. The
general point of this article seems to be either the justification of the atomization of
individuals or an anti-democratic diatribe showing how certain individuals are better
qualified than others.
They may try to use the prisoners' dilemma game or the the joy of destruction game as proof
of their thoughts but sociologists have shown the falsehood of applying western standard
games to other countries when these standards were found to be entirely based in ( http://hci.ucsd.edu/102b/readings/WeirdestPeople.pdf
) Western, Educated, Industrialized, Rich, and Democratic (WEIRD) people.
Humans are social animals which is why they do not generally cope well when put alone. That
is why solitary confinement is regarded as a punishment. Groups may be more likely to
maximize a group payoff and disregard the welfare of others but that is a flexible concept
and not set in cement. In fact, it is scalable. As an example, take a look at Afghanistan
which is normally full of infighting. There, they say me against my brother, my brother and I
against our cousin, my brother and I and our cousin against the outsider. See? These groups
are scalable.
They do mention cohesive groups with the military but miss the significance. Military
organization is based on the squad which is the basic building block and as akin to a hunting
band. Back in Roman times it was called a Contubernium which shows how long this basic
organizational principle has been working. Next up is the company which is an analogue to an
extended family. Above that is the battalion which is an analogue to the maximum number of
people that you can know i.e. a tribe. The Romans had the Cohort here and the British had the
Regiment. All these organizations are built on the foundations of basic human psychology and
cannot be ignored or refuted as the authors do here.
Trouble is introduced when sociopathic individuals gain control of the organizational
structures that you describe. My experience is that most people are reasonable, but can be
easily manipulated to perform questionable tasks. It is a question of leadership and social
goals.
During a crisis, there are individuals dedicated to turning towards the direction of
crisis, while the majority can be seen running in the opposite direction due to raw
self-preservation. Fire, police, medical, and military services are just some examples.
Economists in a neoliberal era are the last people to turn to for answers to social ills.
Their worldview and sentiment created the problems in the first place and perpetuate the
continuance of suffering on many levels.
Gambling and speculating must be relegated to a much lower level of social acceptance then
what is tolerated today. It truly is madness.
:-) If it was news you wanted, would you go to a reporter or anchor (Rachel Maddow comes
to mind) first or would you go instead to a financial analyst and economist that has started
her own blog with a name that might even be considered racy by some? (thinking NC here).
:-)
Couldn't resist, though I agree with your conclusions. Whether it's the substance of an
argument first and source credibility second or visa-versa would seem to depend on context at
the very least.
Amen, Rev! On the provenance of horsessh!t, tho, as in that post about NYC sidewalks, who
better than an economist to ask? This economist's assumptions about human nature just
reek.
In social psychology, Baiting Crowd and Bystander Apathy research looked into this, too.
Leon Festinger et al described Deindividuaion beginning in the mid 50s. Robert Wicklund
delved into Objective vs Subjective Self-Awareness.
Kitty Genovese was murdered in her NYC apartment, while many witnesses heard her screams.
The Group failed her. Crowds often egg on people signifying suicide. We do things, when
masked, we don't dare do when known.
It was thought that, the more one felt as a singular, individuated, objectively
defineable, person-in-society, the more pro-social would be ones behavior. When we're knowing
ourselves subjectively, especially if we "lose ourself" in a crowd, we're more selfish and
willing to "go off the reservation."
I went down the Empathic Altruism Hypothesis rabbit hole. Turns out, it meets up with
sociobiology's Reciprocal Altruism.
Back to basics: how do groups work? First, you can't draw a one-sided distinction; for
every inside, there's an outside. Ingroup/outgroup arise mutually. As soon as you think, "I
am!", in that same moment, there They are.
Us "versus" them is fundamentally flawed: it's Us&Them. The proper basis for being
human, in ones self and in society, is compassion. Naturally, amirite?
Humans are social animals which is why they do not generally cope well when put
alone.
On top of meaning humans don't cope well alone, being social animals means we are evolved
to be parts of groups. A corollary to that is that we know how to be part of the group; how
to process group interests as well as personal interests. This includes not only an
adjustment of the prioritization of options but an awareness of who is in-group and who is
out-group.
Any model of political economy that denies this or posits that it is a problem to be
overcome is starting from false premises that will lead to false conclusions.
But pushing individualism on the world makes perfect sense to me as a ploy by a very
powerful in-group (e.g. the Kochtopus) to dissipate the power and threat of other groups
(governments, communities, unions ).
Yeah, me too. Though I really do think this group is less bad than others. The
commentariat at The American Conservative is the best commentariat anywhere, because the
ideological range is very wide and the best commenters there have some respect for each other
despite their differences. They become smarter, able to see common ground where it
exists.
But most blog comment sections are extremely tribal. Step even slightly outside the local
consensus and you will be mobbed.
I've found that, too. I'm atheist and over several years I've tried commenting in various
atheist blogs and forums. They seem to be highly sensitive to even small criticisms, such as
my suggesting that not all believers are evil. Usually, they instantly block me.
Yeah! Now who wants to go beat the tar out of some those Marginal Revolution commenters?
Some may say that it will make us look bad, but I say they've got it coming!
Funny, I have always said to my spouse and kids I am skeptical and not fond of our species
on a global scale. On an individual basis I am quite good at being accepting and open to
dialogue and interaction.
I'm not impressed, because this provides us with absolutely no insights into how groups
behave in real life. And Plato thought that democracy led to tyranny, not to bad behaviour to
outsiders.
There's a huge anthropological and historical literature to do with how groups actually
function, and their functioning depends on the surrounding circumstances, the nature of the
group and the way in which it came together. The authors could have started by reading some
of it.
The fundamental distinction is between groups which arise naturally (usually based on
territory, ethnicity, family relations), groups which arise by affiliation (religious,
political, trades unions etc) and groups which are thrown together in response to some threat
or difficult circumstances. There's obviously some overlap. In general, groups set up in
opposition to others, or to protect against others will be, by their very nature, hostile. So
various sorts of Marxist groups, feminists, religious factions etc. who take as a point of
departure that they are right and others are wrong, and that they are threatened and must
stick together, will almost by definition be hostile to outsiders. A reading circle, a
charitable association, or even just a traditional community will be much less so.
In addition, groups cooperate with each other according to rules. The Arabic proverb cited by
the Rev is a case in point, and the organisation of tribal life in the Middle East and South
Asia (including Afghanistan) is highly complex and goes well beyond the simple dichotomies
proposed here. In fact, it's hardly worth continuing to pick holes on this study – go
and research something where you are qualified, guys.
"There's a huge anthropological and historical literature to do with how groups actually
function "
That's one of the key problems. Experimental research like this, even with a
cross-cultural sample of subjects, is supposedly designed to filter out such messy
anthropological, historical, or sociological (Rev Kev) factors. Such social psychological
research can be informative if the limits are recognized. But when artificial lab games are
projected as objective reality without social context, you have problems similar to those in
the economics Yves and NC so effectively criticize.
Whew, this is sure a horse that's been around the track a few times.
Back in the Studies in Prejudice days in the mid-20th c, the idea was that tendencies of
this sort can be weakened if individuals, or the group itself, is aware of the tendency.
Social science isn't about describing our fate, it's about helping us to liberate ourselves
from it.
Leaders play a role and influence their groups. If notions of good faith and fair play are
deemed important, for example, then they stand a better chance of being communicated and
enforced through a type of group ethic. History has shown that people individually and in
groups are quite capable of rising above their worst tendencies. That takes work. It may be
instructive to identify the malign influences and influencers that undermine human
dignity.
"Social science isn't about describing our fate, it's about helping us to liberate
ourselves from it."
"History has shown that people individually and in groups are quite capable of rising
above their worst tendencies. That takes work. It may be instructive to identify the malign
influences and influencers that undermine human dignity."
Thanks for these statements. In my opinion, the best social scientists always recognize
this. The worst ones claim to have discovered the "fundamental" causes of human behavior,
social organization, history, etc. and derive their theories accordingly.
Some of this is just common sense and depends on such things as whether or not the group
in question perceives the interaction with outsiders to be beneficial or harmful. When
tourists first started going to Spain after it's civil war, they were largely accepted quite
well since they were bringing desperately needed money with them and since they were not all
that obtrusive. As the numbers swelled by the 70's, and particularly as the tourists
themselves became more obnoxious; USA, USA, nasty-fat-and-drunk-all-day, the sentiment of the
general population changed quite a bit and might even have been considered, anti
social .
American tourists to Spain are vastly outnumbered by European tourists. 2.7 million US
while 18.8 million UK, 11.9 million German, 11.3 million France, and millions more from other
countries.
The objections to tourism everywhere are locals being priced out of housing and other
markets, and the dubious economic value of all these low-wage and highly seasonal jobs.
Not to mention, between the Spanish Civil war and the 1970s, the country was ruled by a
fascist dictatorship, which might have had something to do with blunting criticism of tourism
or anything else, if what you said were true.
Oh please. While not all Americans were obnoxious, those who were had such a knack for it
that they tended to color people's perception of them in general. The obnoxious ones were
truly odious; they certainly didn't need me to bash them. They did a magnificent job of that
all by themselves. In close to a decade of living abroad, I never once saw any other
nationality pull off what an obnoxious American could do in 5 minutes flat (and back then I
could have produced at least two – and probably more – European tour guides that
would have corroborated that point without a heart beat of hesitation – but with
endless stories).
As to numbers, I didn't in any way limit them to national origin in my comment; my
reference to Americans was hardly exclusive except for the obnoxious ones (and I stick by
that). That said, 1) at a certain point, sheer numbers of ALL tourists did indeed have a
highly negative effect and were often perceived as the cause of the points you made as well
as a host of others – such as making the Spanish feel inferior, like servants 2) the
obnoxious foreigners always stood out even when they were not the majority and yes they were
more often than not of North American origin. My point was that groups react to externals
depending on what benefit or harm they perceive the outsiders bring, and my experience in
Spain tended to support the claim that sufficiently large numbers was a significant marker
and either caused or exacerbated negative issues (such as resource inflation). Such inflation
won't occur without the numbers.
I lived in Spain in 1969 and spoke fluently enough, back then alas, to have all night
discussions with friends who pulled no punches in describing a general attitude towards
Americans that went well beyond the general discomfort they felt with the general hordes of
tourists (of all nationalities).
These people were terrified of Franco – they literally wouldn't talk about him,
often even among themselves. But about tourists, and Americans in particular? They loved to
talk about them – and they had an almost affectionate, if frustrated, way of
characterizing Americans with a broad brush – because of the few – even while
they understood perfectly – and usually with a healthy sense of humor – that such
stereotypes were just that. But again, more generally, it was simply a numbers game.
I wonder whether it might be that groups are more likely to have antisocial
decision-makers. Roughly 4% of the population is reckoned to have sociopathic traits. I read
somewhere (maybe in Martha Stout's "The Sociopath Next Door") that the upper reaches of
hierarchies tend to have more sociopaths than the population at large. Cooperators in a group
led by antisocial leaders might tend to cooperate with antisocial group behavior when they
would behave more pro-socially on their own.
Um from a purely instinctive level having been part of groups throughout my life (armed
forces, faculty, political party, youth groups (formal and informal)) in different countries
(continental Europe and NA) my first thought on reading the study was – of course. As
is my second, third and fourth thought.
After all why do groups always form internal cultures, be that a uniform, ranks, language,
behavioural patterns, or simple things such as greetings.
And if one really would like to see the ugliness of a group – be part of one and
raise questions about the behaviour of the group while part of it. Fun times.
Human nature may impact our desire to form a group or be part of one but we should never
loose sight of the individual. The study reinforces that notion.
I don't get the impression from this that the authors are advocating atomization. They are
merely saying that previous economic assumptions are incorrect, and it's worse than they
thought.
Joining a group puts one in a better position to decline to interact with unreliable
people.
The cohesion of a group demonstrates and consolidates trust within the group. If the group
cannot collectively establish and maintain trust, it will collapse.
Outsiders have not participated in the group's trust-building, and are granted less
initial trust. This is simple precaution.
So the article is pretty much an argument against verification of trust. It is not, as the
authors assert, anti-social to evaluate trustworthiness, it normal and appropriate social
behavior. Violation of trust, and bad faith activity generally, are anti-social behaviors,
and groups form in part to recognize and discourage such activity.
Social behaviors take time, they are not instantaneous transactions and their resolutions
generally remain dynamic (despite complaint of formalists). Thus, examinations of narrowly
limited sets of events are without context, insufficient for the development of reliable
conclusion about human behavior.
The Rev Kev is correct about the insights from anthropology and some interpretive
research, which throw into sharp relief the biases inherent in mainstream group and
organizational studies, their bedrock theory of social identity theory (SIT), and SIT's
primary investigative tool of the zero-history group.
At the center of SIT is the not necessarily true assumption that participants in
experimental groups identify with a group, and that the "group" need be little more than a
symbol (i.e., group A, team Red) the experimenter places upon test subjects ("participants"
in today's language). Furthermore, in SIT experiments researchers "know" participants
identify with a group by their decisions for or against an out-group, not as a result of any
tangible observed relations and/or identification to the in-group. Those choices, meanwhile,
occur in an artificial context where the status of "we" is under threat from a "them" in a
zero-sum struggle for the group's perceived social value compared to others.
SIT is a powerful theory, in that it captures/creates simple situations, defined by
intra-group conflict requiring either-or choices among individuals which collectively stand
in place of actual collective decisions. It is a narrowly defined perspective, useful in
limited cases. Despite those readily available facts, SIT has somehow grown to define how
academic group/org research (and virtually all group/org research that get's funding)
understand ALL groups.
SIT cannot measure the "group-ness" of the individuals it tests, much less any feature of
the complex socio-cultural-political conditions that shape group membership, history, and
relations. Studies such as the one reported here have little value outside of the laboratory,
and zero relevance in the infinitely complex world of actually existing intra- and
inter-group relations. Throw in a few economists from "The Church of Rational-Choice" and
you've got a brew that fills the room with a fog of toxic speculation about how groups act in
the world; a mist that, over the years, has escaped the learned journals and left a dirty
film upon the minds of other specializations and general populations.
Kevin McDonald the far-rights's favorite intellectual. He thinks Jews as a group are
undermining and destroying western civilization from within by disempowering the European
Christian majority while empowering ethnic and social minorities. This is an evolutionary
survival strategy, he says, designed to protect Jews from the deadly waves of antisemitism
that culminated with the Nazi Holocaust.
When neo Nazis/the alt-right blame "the Jew" for gay marriage, non-white immigration and
everything else they despise, McDonald's writing is what they reach for when they need
intellectual cover.
McDonald, for his part, is an enthusiastic supporter of the antisemites and far righters
who revere his work.
(I've been noticing an increase in posters popping up in various forums and casually
dropping couched hard-right talking points into the conversation or "helpfully" recommending
facsistic/antisemitic ideologues for further reading.)
Interestingly I had never heard of this Kevin McDonald, googling him seems to get zero
hits of anyone that would seem to be the character who you allude to, however he is the first
hit on Bing , whatever his message is it would seem google want to uninvent him .
"... "The entire US economy today is about the quick buck." ..."
"... " When market tumbled in 2015 and 2016, global central banks embarked on the largest combined intervention effort in history giving us a grand total of over $15 trillion." ..."
Central banks are founded for one reason only: to save
[private] banks from bankruptcy, invariably at the cost of society at large. They'll bring down markets
and societies just to make sure banks don't go under. They'll also, and even, do that when
these banks have taken insane risks. It's a battle societies can't possibly win as long as
central banks can raise unlimited amounts of 'money' and shove it into private banks. Ergo:
societies can't survive the existence of a central bank that serves the interests of its
private banks.
For years critics of U.S. central-bank policy have been dismissed as Negative Nellies,
but the ugly truth is staring us in the face: Stock-market advances remain a game of
artificial liquidity and central-bank jawboning, not organic growth. And now the jig is up.
As I've been saying for a long time: There is zero evidence that markets can make or sustain
new highs without some sort of intervention on the side of central banks. None. Zero. Zilch.
And don't think this is hyperbole on my part. I will, of course, present evidence.
In March 2009 markets bottomed on the expansion of QE1 (quantitative easing, part one),
which was introduced following the initial announcement in November 2008. Every major
correction since then has been met with major central-bank interventions: QE2, Twist, QE3 and
so on. When market tumbled in 2015 and 2016, global central banks embarked on the largest
combined intervention effort in history. The sum: More than $5 trillion between 2016 and
2017, giving us a grand total of over $15 trillion, courtesy of the U.S. Federal Reserve, the
European Central Bank and the Bank of Japan:
When did global central-bank balance sheets peak? Early 2018. When did global markets
peak? January 2018. And don't think the Fed was not still active in the jawboning business
despite QE3 ending. After all, their official language remained "accommodative" and their
interest-rate increase schedule was the slowest in history, cautious and tinkering so as not
to upset the markets.
With tax cuts coming into the U.S. economy in early 2018, along with record buybacks,
the markets at first ignored the beginning of QT (quantitative tightening), but then it all
changed. And guess what changed? Two things. In September 2018, for the first time in 10
years, the U.S. central bank's Federal Open Market Committee (FOMC) removed one little word
from its policy stance: "accommodative." And the Fed increased its QT program. When did U.S.
markets peak? September 2018.
[..] don't mistake this rally for anything but for what it really is: Central banks
again coming to the rescue of stressed markets. Their action and words matter in heavily
oversold markets. But the reality remains, artificial liquidity is coming out of these
markets. [..] What's the larger message here? Free-market price discovery would require a
full accounting of market bubbles and the realities of structural problems, which remain
unresolved. Central banks exist to prevent the consequences of excess to come to fruition and
give license to politicians to avoid addressing structural problems.
is it $15 trillion, or is it 20, or 30? How much did China add to the total? And for what?
How much of it has been invested in productivity? I bet you it's not even 10%. The rest has
just been wasted on a facade of a functioning economy. Those facades tend to get terribly
expensive.
Western economies would have shrunk into negative GDP growth if not for the $15-20 trillion
their central banks injected over the past decade. And that is seen, or rather presented, as
something so terrible you got to do anything to prevent it from happening. As if it's
completely natural, and desirable, for an economy to grow forever.
It isn't and it won't happen, but keeping the illusion alive serves to allow the rich to put
their riches in a safe place, to increase inequality and to prepare those who need it least to
save most to ride out the storm they themselves are creating and deepening. And everyone else
can go stuff themselves.
And sure, perhaps a central bank could have some function that benefits society. It's just
that none of them ever do, do they? Central banks benefit private banks, and since the latter
have for some braindead reason been gifted with the power to issue our money, while we could
have just as well done that ourselves, the circle is round and we ain't in it.
No, the Fed doesn't hide the ugly truth. The Fed is that ugly truth. And if we don't get rid
of it, it will get a lot uglier still before the entire edifice falls to pieces. This is not
complicated stuff, that's just what you're made to believe. Nobody needs the Fed who doesn't
want to pervert markets and society, it is that simple.
The word your looking for "abyss"
definition --
a catastrophic situation seen as likely to occur to the people with wealth that is built
upon "leverage."
Leverage results from using borrowed capital as a funding source when investing to expand
the firm's asset base and generate returns on risk capital. Leverage is an investment
strategy of using borrowed money -- specifically, the use of various financial instruments
or borrowed capital -- to increase the potential return of an investment. Leverage can also
refer to the amount of debt a firm uses to finance assets. When one refers to a company,
property or investment as "highly leveraged," it means that item has more debt than
equity.
"The entire US economy today is about the quick buck."
Even the stock market these days seems to be about the quick buck. In the US, the
average holding period for stocks has dropped from 8 years (1960), to 5 years (1970), to 2
years (1990), to 4 months (in the past few years).
The policies of the Fed (as well as the Board of Directors of the companies) are
evidently geared towards the short-term benefits of the owners who will be leaving in a few
months. The long-term health of the companies, the economy, and the overall society (mostly
non-owners) is evidently not so important to the Fed and the CEOs.
" When market tumbled in 2015 and 2016, global central banks embarked on the largest combined intervention effort
in history giving us a grand total of over $15 trillion."
Those $15 trillion in assets being held by the central banks propped the global stock market capitalization up to around
$75 trillion. Short term thinking that gives short-term benefits. Take away the props and of course that sucker is going to
fall.
What were they thinking, the overweight patient with all of those systemic problems is going to be able to walk just
fine when the crutches are taken away?
"I don't care about Europe," declared US President Donald Trump this week during his White
House cabinet's first meeting of the new year.
The American president probably revealed more about the true nature of US-European relations
than he intended.
Trump was speaking
in the context of American military involvement with Europe, as well as trade and other issues.
He was reiterating the tedious mantra that the US is allegedly being "taken advantage of" by
European allies by not spending more on their military budgets.
It was the usual rambling, barely articulate fallacy from Trump who portrays the inherent
military profligacy of American corporate capitalism not as a destructive vice, but as a
supposed virtuous cause of "protection" for allies and the rest of the world. In short,
delusional American exceptionalism.
But it was Trump's bluntly stated contempt for European allies that was notable. In a quip
to a question about his reported unpopularity in Europe, the president said he didn't care what
Europeans think. A few seconds later, in a betrayal of his arrant egotistical state of mind,
Trump turned around and claimed that he would be popular if he stood in an election in
Europe!
Ironically, though, perhaps we should be grateful to Trump for his brash outspokenness. By
dissing Europe with such contemptuous disregard, he lays bare the true face of Washington's
relations with the old continent.
Past American presidents have been adept at presenting the transatlantic connection as a
putative "strategic partnership" – as most clearly manifested by the US-led NATO military
alliance. Trump's former Defense Secretary James Mattis, who resigned in protest over policies,
was of this conventional transatlantic mould. Mattis repeatedly talked up the importance of
maintaining strong bonds with allies.
However, decades of transatlantic rhetoric has often served to conceal the real relationship
between Washington and Europe. The reality is the Europeans are not partners. They are
vassals.
Successive European governments and the European Union have continually permitted their
countries to serve as bases for American military forces, including in the past, nuclear
weapons pointed at Russia. Those missiles may return to European soil, if the US walks away
from the Intermediate-range Nuclear Forces Treaty as it threatens to do under Trump.
The subordinate European governments have also dutifully facilitated American militarism by
affording a multilateral pseudo legal cover for Washington's imperialist wars. For example,
European nations sent troops to augment US wars in Afghanistan and Iraq thereby giving criminal
genocidal ventures a veneer of legitimacy.
Ironically, in his remarks to his cabinet this week Trump scoffed at European nations for
sending "only 100 troops" to Afghanistan and Iraq. He also mentioned Syria, illustrating how
rampantly arrogant US criminality is.
So, Trump is berating Europeans for not devoting more of their economic resources to match
the American pathological addiction to militarism; for not paying more for US military
occupation of European countries; and for not sending more troops to join in American overseas
criminal aggressions.
Previous American presidents would be a little more circumspect in disguising Washington's
tyrannical relationship with Europe. But Trump is too self-centered and boorishly transactional
in his view. The whole self-indulgent pretense of American chivalry and protection is shredded,
albeit unwittingly.
Trump told Europe this week he does not care a jot about the continent and supposed US
allies. With such contempt, European nations need to wake up to the reality of charting their
own independence from Washington, and in particular pursuing a genuine continental partnership
with Russia.
Washington's arrogance is perhaps most starkly expressed by the Trump administration
threatening European states with sanctions if they continue building the Nord Stream 2 gas
pipeline from Russia. Russia is a natural strategic partner for Europe, especially in terms of
economical supply of gas and oil fuel.
The issue of energy supply and demand epitomizes so much else about the relation between
Europe and Russia, and the US. The latter is something of an imposter and is foisting its
selfish interests on others, whether in energy trade or in military affairs. We have also seen
this with regard to Trump tearing up the Iran nuclear deal and punishing Europe for upholding
that international treaty.
Trump could not have stated the reality of American disregard for European interests any
more brazenly. He doesn't give a fig.
At the end of last year, the European Union voted to renew economic sanctions on Russia for
another six months. Those sanctions are based largely on anti-Russian ideological claims made
by Washington and its NATO partners over a host of spurious issues, including conflict in
Ukraine and the preposterous fantasy of Russia interfering in elections. Again, the vassal
position of Europe is revealed by the fact that it is European economies, not the American
economy, that have incurred self-defeating damage from the sanctions on Russia.
European governments need to adopt something of Trump's "America First" policy and begin
putting the interests of their people first. Europe must repudiate Washington's antagonism and
militarism towards Russia. Many of the incumbent European governments seem incapable of finding
the necessary political will to be independent from Washington. That is partly why there is
such a phenomenal rise in popular discontent with the European Union and establishment
politicians. The powers-that-be are unresponsive and unrepresentative of popular interests and
needs, creating further backlash to the establishment institutions.
Europe needs to stop being a lackey of Washington. After Trump's blatant contempt this week,
Europe has no excuse or justification to continue debasing itself as an American vassal.
"... Today the dominant narrative is that of market fundamentalism, widely known in Europe as neoliberalism. The story it tells is that the market can resolve almost all social, economic and political problems. The less the state regulates and taxes us, the better off we will be. Public services should be privatised, public spending should be cut, and business should be freed from social control. In countries such as the UK and the US, this story has shaped our norms and values for around 35 years: since Thatcher and Reagan came to power. It is rapidly colonising the rest of the world. ..."
"... How long halt ye between two opinions? if the LORD be God, follow him: but if Baal, then follow him ..."
"... But in the prosperity gospel preached by some Neopentecostals, the Christian gospel has been swamped by the values of Neoliberalism. One could say that "prosperity theology" is the contextualisation of the Christian gospel in a society dominated by Neoliberal values, but to such an extent that the result is syncretism. ..."
And Elijah came unto all the people, and said, How long halt ye between two opinions? if the LORD be God, follow him: but if
Baal, then follow him. And the people answered him not a word (I Kings 18:21).
It seems to me that for many Christians the Gospel of Neoliberalism has replaced the Gospel of Jesus Christ. I've known that for
a long time, and have blogged about it before (
here , and
here , and
here ). But today I was reminded of it again
when several people brought various articles on it to my attention:
Bullying used to be confined to schools; now it is a common feature of the workplace. This is a typical symptom of the impotent
venting their frustration on the weak – in psychology it's known as displaced aggression. There is a buried sense of fear, ranging
from performance anxiety to a broader social fear of the threatening other.
Constant evaluations at work cause a decline in autonomy and a growing dependence on external, often shifting, norms. This
results in what the sociologist Richard Sennett has aptly described as the "infantilisation of the workers".
Today the dominant narrative is that of market fundamentalism, widely known in Europe as neoliberalism. The story it tells
is that the market can resolve almost all social, economic and political problems. The less the state regulates and taxes us,
the better off we will be. Public services should be privatised, public spending should be cut, and business should be freed from
social control. In countries such as the UK and the US, this story has shaped our norms and values for around 35 years: since
Thatcher and Reagan came to power. It is rapidly colonising the rest of the world.
Neoliberalism draws on the ancient Greek idea that our ethics are innate (and governed by a state of nature it calls the market)
and on the Christian idea that humankind is inherently selfish and acquisitive. Rather than seeking to suppress these characteristics,
neoliberalism celebrates them: it claims that unrestricted competition, driven by self-interest, leads to innovation and economic
growth, enhancing the welfare of all.
When a Christian script was running in many people's minds (see
Counterscript to know what that refers to)
Greed was regarded as one of the Seven Deadly Sins, but in the Gospel according to Neoliberalism, it is the supreme virtue.
And for many Christians, the Neoliberal script has started to drown out the Christian one, and so raises the question of Elijah:
How long halt ye between two opinions? if the LORD be God, follow him: but if Baal, then follow him .
"Baal" is a word that means lord or master, and the deity referred to was Melqart, the god of the Phoenician city of Tyre. Melqart
was a god of rain and fertility, and hence of material prosperity, and was invoked by Phoenician traders for protection of their
commercial enterprises. In other words, the cult of Baal was a prosperity cult, which had lured the people of Israel, and was actively
promoted by their Phoenician queen Jezebel, the wife of King Ahab. The people of Israel had the prosperity script playing in their
minds.
In our day too, many Christians have the prosperity script playing in their minds.
The post immediately preceding this one, on
Neopentecostal churches and their celebrity pastors , points to a phenomenon that Christian missiologists like to refer to as
inculturation or contextualisation, which, in a good sense, means making the Christian gospel understandable to people living in
a particular culture or context. But in the prosperity gospel preached by some Neopentecostals, the Christian gospel has been swamped
by the values of Neoliberalism. One could say that "prosperity theology" is the contextualisation of the Christian gospel in a society
dominated by Neoliberal values, but to such an extent that the result is syncretism.
But while the Neopentecostals sometimes do this explicitly, many other Christian groups do it implicitly, and we need to ask ourselves
where our values really come from -- from the gospel of Jesus Christ, or from the gospel of the Market. Jesus Christ is the love
of God incarnate, but the Market, or Melqart, or Mammon, is the love of money incarnate.
When the world urges us to celebrate the virtues of Greed, whether subtly or blatantly, do we resist it? Are we even aware of
what is happening? Or do we simply allow that script to play in our heads, telling us "You deserve it"?
Last week a couple of journalists were asking me why Neopentecostal churches that preach a properity gospel, like T.B. Joshua's
Synagogue Church of all Nations, are growing in popularity, and one answer is that given by George Monbiot in the article quoted
above -- that the values of Neoliberalism, promoted by Reagan and Thatcher, are now colonising the whole world.
"... While she went under a 'Conservative' label, Thatcher was actually a neo-liberal. Her economic reforms would change Britain, but not in a way genuine 'conservatives' would have liked. In the Thatcher years, de-industrialization was welcomed. There was to be no state-aid to manufacturers who hit difficulties because of the high pound, unlike the billions of pounds in bailouts which the banks received in 2008. ..."
The era of what J.K. Galbraith called " private opulence and public squalor " really
began in Britain in 1979 with the election of Margaret Thatcher as prime minister. She was
determined to dismantle the post-war Keynesian economic model.
While she went under a 'Conservative' label, Thatcher was actually a neo-liberal. Her
economic reforms would change Britain, but not in a way genuine 'conservatives' would have
liked. In the Thatcher years, de-industrialization was welcomed. There was to be no state-aid
to manufacturers who hit difficulties because of the high pound, unlike the billions of pounds
in bailouts which the banks received in 2008.
During the 1980s, industrial towns in the north, Scotland, Wales and the Midlands took a big
hit. They had their heart and soul knocked out of them and they've never really recovered to
this day.
The economy was Americanized and financialized. The gap between rich and poor which had
reached historically low levels by the mid 1970s, began to rise sharply.
As the people at the very top of the pyramid pulled away from the rest, their wealth, often
boosted by the privatization of publicly-owned assets, a new underclass dependent on welfare
payments emerged at the bottom.
These trends were exacerbated by the austerity program of the last ten years with the burden
of the £500 billion bank bailouts being imposed on ordinary people. Local authorities
have seen the money they receive from central government
slashed and instead of making savings at the top, most have preferred to cut frontline
services, such as libraries and toilets.
A couple of weeks ago I visited Swindon, in Wiltshire, in south-western England. It was once
a famous railway town. Its engineering works were opened in 1843. But as the Thatcher
government targeted British Rail Engineering Ltd, a part of the state-owned railway, for
privatization, the works closed down in 1986.
I worked in Swindon for a while in the early 1990s. I remember it was still quite prosperous
then. But when I went back two weeks ago I was shocked to see just how run down it had become.
It's always been a very friendly place, but it's clear that the last few years haven't treated
it well. My wife and I parked in a council-owned multi-storey car park that looked as if it
hadn't had a coat of paint since the 1980s.
You'll find this low level of maintenance of municipal facilities across the UK now because
of the cuts. In the pre-neoliberal era, we used to have park wardens in uniforms. Local
authorities even operated self-service restaurants. There was a real pride in making your town
look smart and having excellent facilities for local people and those who visited.
The decline of the UK's seaside resorts has been particularly striking. Last year I took my
mother to Blackpool, in the north-west of England, to see the house where she was living when
WWII began.
We were both surprised to see so many hotels and guest houses boarded up along the South
Shore. Surprised, too, to see some parts of town looking so poor. In 2013, a report by the
Centre for Social Justice', said that Blackpool and seaside resorts like it had become "
dumping grounds for people facing problems such as unemployment, social exclusion and
substance abuse ." Sophie McBain wrote about the decline of Blackpool here .
While
here is a picture feature on the same theme from the Daily Mail Scarborough, on the
'opposite' North Yorkshire coast, is as beautiful as Sorrento on a sunny day, but here again,
facilities are being lost. In June this year, demolition work on the seafront Futurist Theatre,
where the Beatles once played, began. The council said it was 'not
sustainable'.
In Exmouth, in East Devon, the much-loved Elizabeth Hall, dating from the Victorian age, and
which I visited in 2012, has been demolished to make way for a Premier
Inn.
It's as if preserving the local heritage, doesn't matter to those in charge. Note that the
East Devon Council, which voted for the demolition of the historic hall, went under the name
'Conservative'. Surely we could get them under the 'Trades Description Act'?
So much that was of great worth has been destroyed by the neoliberals in the last forty
years. But we shouldn't just give up. There are practical steps that a government which
actually cared about Britain could take (along with local authorities and businesses), to undo
some of the damage and get the country looking smart again.
As I argued here , Labour
leader Jeremy Corbyn's 'Build it in Britain' plan, announced in July, is exactly what is needed
to regenerate the national economy.
The
cuts in government funding to local authorities, which will be even worse next year must be
reversed and councils obliged to spend the new money they receive not on high salaries for
executive officers, but on front-line services that the public rely on.
There must be no more closures of libraries, toilets and other council-run facilities, and
wherever possible, those that have been shut down in recent years, need to be re-opened.
Banks should be made to keep local branches open too. Almost 3,000 have shut in just three years which is an
absolutely disgrace given the huge profits these financial institutions make.
Public transport should be renationalized, with fares reduced by 50 percent across the
board, and at the same time car-parking prices in town centers slashed to encourage more
visitors. No new out-of-town retail parks should be sanctioned.
Rents and rates for town centers need to be significantly lowered with councils acting
swiftly to make sure that there are no boarded-up outlets in our high streets.
Britain's seaside resorts need a special 'Marshall Plan' style regeneration package. In
2017, the UK government
said it would contribute £40m from 2019-21 to the so-called Coastal Communities
Fund', set up in 2012.
But this is a drop in the ocean and has of course been negated by the overall impact of
austerity on local communities.
In the late 1970s, as I noted in my Guardian article 'The
great British seaside sell-off', a benign state met almost all of British holidaymakers' needs,
from cheap transport to and from the resort, to hotels and extensive leisure facilities run by
councils.
Government and local authorities can't do much about the weather, but they could do a lot
more to encourage Britons to holiday at least once a year in their own country as the knock-on
economic and social benefits would be immense.
How about each household being given a £100 voucher to go towards a break at a UK
seaside resort and heavily reduced fares on the new publicly-owned British Rail and National
Bus Company to take them there? Politicians could lead by example and take their main summer
holidays in Britain, as Labour's Harold Wilson, who loved the Scilly Isles, used to do in the
1960s.
Of course MPs need to go abroad and see how other countries operate, but first and foremost
they need to be aware of the state of their own backyard and they can only get that if they
travel around more, as the admirable Chris Williamson does with his Democracy Roadshow.
Run-down Britain can be fixed, but it requires a major change in how we do things. If we
carry on as we are at present, one shudders to think where we'll be in another forty years. And
when it comes to the Brexit debate, it's worth remembering that all this decline has taken
place during the time Britain has been a member of the European Union.
"... Subsidizing Europe's postwar recovery was not only of immense economic importance to Washington, it was also of vital strategic importance in pushing back against Soviet influence in Europe. Immediately after the war, this influence was riding high on the back of the Red Army's seminal role in liberating the continent from fascism ..."
"... A portion of Marshall aid money – in total some $12 billion (over $100 billion today) over four years between 1948 and 1952 – was diverted to fund various covert operations under the auspices of the CIA, designed to penetrate and subvert those governments and political parties that elicited a leaning towards socialist and communist ideas. ..."
"... Washington's influence over the European Union continues to this day. Most prominently the economic model that underpins this crisis-ridden economic and increasingly political bloc, neoliberalism, is one made in America. From inception as the lodestar of Western economic thought in the mid 1970s, prior to its adoption as the economic base of the US and UK in the early 1980s, neoliberalism has functioned alongside Washington's military might and overweening cultural values as part of an architecture of imperialism to which European elites have signed up as fully-fledged disciples, consciously or otherwise ..."
We live in a world fashioned by Washington, and as 2019 approaches the dire
consequences remain woefully evident. In 1948 US State Department mandarin George Kennan – the man
credited with devising the policy of
containment vis-à-vis the Soviet Union at the end of WWII, – laid bare the focus
of US foreign policy in the postwar period:
" We have about 50 percent of the world's wealth, but only 6.3 percent of its population
Our real task in the coming period is to devise a pattern or relationships which will permit us
to maintain this position of disparity. To do so, we will have to dispense with all
sentimentality and daydreamings We are going to have to deal in straight power concepts
."
The " pattern of relationships " advocated by Kennan is embodied in the panoply of
international institutions that have governed our world and dominated the planet's economic,
geopolitical, and military architecture in the seven decades since.
The World Bank and the IMF came out of the Bretton Woods Conference in 1944, along with the
establishment of the dollar as the world's primary international reserve currency.
The Truman administration's 1947 National
Security Act gave birth to a US military-industrial complex that married the nation's
economy to what was destined to become and remain a vast security and intelligence
apparatus.
NATO, an instrument of US imperial power, was established in 1949, the year after the
Marshall
Plan (European Recovery Program) was rolled out with the objective of creating markets and
demand in Europe for US exports; Washington having emerged from the war as a global economic
hegemon and creditor nation without peer. A similar plan was also rolled out to rebuild the
Japanese economy on the same basis.
Pausing for a moment, it has to count as a remarkable feat of forward thinking on the part
of US policymakers, embarking on a plan to not only affect the economic and industrial recovery
of its two defeated enemies, Germany and Japan, immediately after the war, but turn them into
regional economic powerhouses.
Subsidizing Europe's postwar recovery was not only of immense economic importance to
Washington, it was also of vital strategic importance in pushing back against Soviet influence
in Europe. Immediately after the war, this influence was riding high on the back of the Red
Army's seminal role in liberating the continent from fascism, buttressed by resistance
movements across occupied Europe in which Communist partisans had been most prominent.
A portion of Marshall aid money – in total some $12 billion (over $100 billion today)
over four years between 1948 and 1952 – was diverted to fund various covert operations
under the auspices of the CIA, designed to penetrate and subvert those governments and
political parties that elicited a leaning towards socialist and communist ideas.
In their titanic work 'The Untold History of the United States', co-authors Peter Kuznick
and Oliver Stone reveal that one of those operations involved " supporting a guerrilla army
in Ukraine called Nightingale, which had been established by the Wehrmacht in the spring of
1941 with the help of Stephan Bandera, head of the Ukrainian National Organization's more
radical wing OUN-B. The following year, Mikola Lebed founded the organization's terrorist arm,
the Ukrainian Insurgent Army made up of ultranationalist Ukrainians, including Nazi
collaborators ."
Given the nefarious role of Washington and its allies in aiding and abetting the rebirth of
ultra-nationalism in Ukraine in our time, Marx's dictum – History repeats itself, first
as tragedy, second as farce – is hard to avoid.
Another institution that was established with US economic and strategic objectives in mind
was the European Coal and Steel
Community (ECSC) in 1951, the forerunner of today's European Union. Yes, that's right; the
original incarnation of the EU was a triumph not of European diplomacy but US
diplomacy.
In his 2011 book 'The Global Minotaur', left-leaning economist Yanis Varoufakis writes:
" Students of European integration are taught that the European Union started life in
the form of the ECSC. What they are less likely to come across is the well-kept secret that it
was the United States that cajoled, pushed, threatened and sweet-talked the Europeans into
putting it together Indeed, it is indisputable that without the United States' guiding hand the
ECSC would not have materialized ."
He goes on:
" There was one politician who saw this clearly: General Charles de Gaulle, the future
President of France When the ECSC was formed, de Gaulle denounced it on the basis that it was
creating a united Europe in the form of a restrictive cartel and, more importantly, that it was
an American creation, under Washington's influence ."
Washington's influence over the European Union continues to this day. Most prominently the
economic model that underpins this crisis-ridden economic and increasingly political bloc,
neoliberalism, is one made in America. From inception as the lodestar of Western economic thought in the mid 1970s, prior to its
adoption as the economic base of the US and UK in the early 1980s, neoliberalism has functioned
alongside Washington's military might and overweening cultural values as part of an
architecture of imperialism to which European elites have signed up as fully-fledged disciples,
consciously or otherwise.
... ... ...
John Wight has written for a variety of newspapers and websites, including the
Independent, Morning Star, Huffington Post, Counterpunch, London Progressive Journal, and
Foreign Policy Journal.
"Neoliberalised healthcare requires every patient (or rather, "client" of healthcare
"services") to take
responsibility for her own state or behaviour. Mental healthcare is therefore being
reframed as a series of "outcomes" geared at measurable improvement which the "service
user" must manage by themselves as far as possible.
Access to psychiatric diagnosis and support from public health services (and also within
private or employer-run occupational healthcare schemes) sometimes depends on completion of a
mood or symptom diary using smartphone or Fitbit self-tracking
techniques .
And there may well be more punitive future consequences for failure to self-track, as
employers and perhaps benefit agencies
gain more power to command this sort of performance from workers." •
Our system was created by human beings for the benefit of human beings. We do not exist to serve markets.
Wait, you mean the old 'Twilight Zone' episode about Martians landing and handing out booklets titled "To Serve Man" weren't
Martians at all? They were neoliberals?!? /s
Great rant. Fox is a bellwether of sorts, knowing where the public is going, and following for the ratings, imo.
Re: Tucker Carlson's epiphany: Well it'd be nice if the Republicans ascendancy from the 80s to Bush II marked the high water
tide of the Libertarian Future. I always hope they'd figure out that Free Market worship is idolatry and it's not a god that gets
you any results. Unless you have 'grace' (being born into a connected lineage, like the Vanderbilt or deVos noble houses.
More than 70 percent of French people support the "yellow vests," who have evoked broad sympathy from workers around the
world. But the established political parties and the union bureaucracies, totally integrated into the state and already furious
that the "yellow vests" have outflanked them, are violently hostile.
Re Medium piece on mental health care: none of that is new. I and my colleagues have been fighting those battles as psychotherapists
in community mental health since the 90s.
Everything to be concrete and measurable so once your goals are "operationalized" the treatment plan sounds more like marching
orders, not to mention being nonsensical:
"Client will achieve 25% reduction in depression as evidenced by daily crying spells reduced to 2x/wk and social interactions
increased from 0x/wk to 2x/wk"
Believe me, therapists for the elite don't take insurance because they know the paperwork requirements are bullshit.
Not to mention the records insurance require totally blows confidentiality. It took me several years to accept that there was
no way around making dual sets of notes, one in the official chart for purposes of compliance, and another handwritten one for
purposes of actual treatment. Sad!
HIPPAA btw is about portability, not privacy. Don't let 'em fool ya.
DeLong proves himself to be incoherent on
economic theory,, clearly bought into free lunch economics, perhaps not willing to outright
oppose current Fed policy because he would agree with Trump, but totally unwilling to admit
that tge only thing the Fed did do is prevent the massive foreclosures from asset prices
falling far below their debt.
Asset prices are high because too little labor is paid to build assets. Too much public
policy is devoted to anti-keynesian policy of preventing investments that increase investments,
investments always requiring paying workers to build long term assets which to a keynesian
generate merely enough returns over their useful life to pay the workers and little else.
High asset prices mean high inflation. Yet free lunch economists say paying twice labor
costs for something is not inflation, but paying labor costs for the same priced object is
extremely high inflation.
That is free lunch economics. Money for nothing, from nothing.
Paying workers kills jobs because it costs too much. Ie, building more factories in the US
and producing more would drive down prices and kill jobs. So, only not paying workers to create
scarcity and higher prices can't jobs be created.
Its a failed economic theory, yet DeLong can't simply say so.
Let's see, if the duration of equity is, what, 15 years? so it behaves like a 30 year bond
or so in terms of rate sensitivity, then roughly speaking a percent change in discount should
be about fifteen percent change in value. That would be four more rate hikes. Thus the value
of everything would be down about 15%.
Meanwhile, Roubini is talking about changes in output on the order of maybe 1% over a few
year time period (maybe with interim volatility)? He is talking about a change in yield,
which feeds back into value 1:1, for a 1% decline in the value of everything.
How is it that economists cannot do bond math comparisons to see what size matters and
what does not? Thus the ills of the market are the Fed, not the crazy potus.
Top 5 professional journals (T5) serve as gatekeepers for professional advancement of
academic economists: "strong evidence for the influence of the T5. Without doubt, publication
in the T5 is a powerful determinant of tenure and promotion in academic economics." https://www.ineteconomics.org/perspectives/blog/the-tyranny-of-the-top-five-journals
When this happens, acceptable research and discourse tend to get established and limited
… Chinese economists probably need not apply...as well as unorthodox views in the
US.
Michael Hudson describes the Orwellian approach of today's mainstream economics: "Viewing
the economic vocabulary as propaganda, I saw that we can understand how the words you hear as
largely propaganda words. They’ve changed the meaning to the opposite of what the
classical economists meant. But if you untangle the reversal of meaning and juxtapose a more
functional vocabulary you can better understand what ís actually happening." https://michael-hudson.com/2018/12/guns-butter-the-vocabulary-of-economic-deception/
"... Hard core neoliberals say Social Security is a ponzi scheme because too few workers can't pay too many retirees, it should have bought stocks and bonds. Ok, if all the boomers had bought stocks and bonds instead of paying FICA, would too many boomers selling stocks relative to the younger workers saving for retirement buying stocks magically keep share prices rising? Was the crash the day before Chriistmas caused by too many buyers of stocks and bonds, or too many sellers? ..."
"... Hard core neoliberals have been pushing free lunch economics for several decades by erasing the connection between labor and money and real value. ..."
Why oh why can't Krugman explain economics, and especially how "voodoo" conservative free
lunch economics is.
First, why has Krugman self lobotomized and remove the economic basic axiom that
everything is about labor, especially money.
Money is labor, labor in the past or labor in the future. Eliminate work, ie, robots
completely replace all workers, then someone will tell their robot to build more robots and
tell those robots to do the same until everyone can be given as many robots as they want for
free to produce as much as the new own want, whether to consume or not, so no one will be
willing to pay anything for any thing.
So, until someone can explain how money has value without human labor, and "property" is
not the reason because I will order my robots to build an army to kill you if you refuse to
vacate the land I want as my own. And I'll build the biggest robot army to fight off any
"government" that tries to take the liberty I have gained with my robots eliminating any
requirement for me to work for what I consume or desire.
So, again, money is past or future labor, just as goods and capital are past labor, the
Fed merely ensures liquidity of labor IOUs, but if no one will pay workers to work with these
IOUs, no one will get a job no matter how many labor IOUs the Fed prints.
And it i give you labor IOUs, but no one will produce anything by work in exchange for
those labor IOUs, they are worthless. Like in Venezuela where you buy stuff paying in eggs or
fuel or other things produced by workers with capital, ie, labor.
And Trump never sees any value in money because he never works. He'll promise you money,
but if you believe he'll do any work to make his promise honest, you are a fool. And thats
true for pretty muchh all Hard core neoliberals these days.
Hard core neoliberals tell you to work more than the money paid in exchange for other working to
produce stuff for you in the future. First it was by pensions. But now they refuse. Then is
was by government IOUs, but now they are saying "nope" to redeeming the bonds.
Anyone think the businesses with skyhigh share prices are going to pay dividends, or buy
back shares at sky high prices when sellers exceed buyers?
Hard core neoliberals say Social Security is a ponzi scheme because too few workers can't pay too
many retirees, it should have bought stocks and bonds. Ok, if all the boomers had bought
stocks and bonds instead of paying FICA, would too many boomers selling stocks relative to
the younger workers saving for retirement buying stocks magically keep share prices rising?
Was the crash the day before Chriistmas caused by too many buyers of stocks and bonds, or too
many sellers?
Hard core neoliberals have been pushing free lunch economics for several decades by erasing the
connection between labor and money and real value.
Hard core neoliberals see work as too costly, and paying workers to crushingly costly, but they
want others to give them both stuff and money. A free lunch.
And they cleverly created clever lines like, "cutting taxes puts money in yoour pockets"
and "costly givernment regulations kills jobs" and "we must cut costs to create jobs".
So, voters who just got told GM is cutting costs by eliminating 10,000 jobs and closing 5
factories listen to Trump promise to cut costs to bring back factories and jobs end up voting
for Trump???
So genious Krugman can't point out the lie Trump and the GOP are telling by simply
pointing outt to those workers they lost their job because of cost cutting.
Why can't workers understand that anytime a politician says "cut" he means "fire" or
"impoverish"???
Bad Faith, Pathos and G.O.P. Economics: On professionals who sold their integrity, and got
nothing in return.
By Paul Krugman
As 2018 draws to an end, we're seeing many articles about the state of the economy. What
I'd like to do, however, is talk about something different -- the state of economics, at
least as it relates to the political situation. And that state is not good: The bad faith
that dominates conservative politics at every level is infecting right-leaning economists,
too.
This is sad, but it's also pathetic. For even as once-respected economists abase
themselves in the face of Trumpism, the G.O.P. is making it ever clearer that their services
aren't wanted, that only hacks need apply.
What you need to know when talking about economics and politics is that there are three
kinds of economist in modern America: liberal professional economists, conservative
professional economists and professional conservative economists.
By "liberal professional economists" I mean researchers who try to understand the economy
as best they can, but who, being human, also have political preferences, which in their case
puts them on the left side of the U.S. political spectrum, although usually only modestly
left of center. Conservative professional economists are their counterparts on the center
right.
Professional conservative economists are something quite different. They're people who
even center-right professionals consider charlatans and cranks; they make a living by
pretending to do actual economics -- often incompetently -- but are actually just
propagandists. And no, there isn't really a corresponding category on the other side, in part
because the billionaires who finance such propaganda are much more likely to be on the right
than on the left.
But let me leave the pure hacks on one side for a moment, and talk about the people who at
least used to seem to be trying to do real economics.
Do economists' political preferences shape their research? They surely affect the choice
of subject: Liberals are more likely to be interested in rising inequality or the economics
of climate change than conservatives. And human nature being what it is, some of them --
O.K., of us -- occasionally engage in motivated reasoning, reaching conclusions that cater to
their politics.
I used to believe, however, that such lapses were the exception, not the rule, and the
liberal economists I know try hard to avoid falling into that trap, and apologize when they
do.
But do conservative economists do the same? Increasingly, the answer seems to be no, at
least for those who play a prominent role in public discourse.
Even during the Obama years, it was striking how many well-known Republican-leaning
economists followed the party line on economic policy, even when that party line was in
conflict with the nonpolitical professional consensus.
Thus, when a Democrat was in the White House, G.O.P. politicians opposed anything that
might mitigate the costs of the 2008 financial crisis and its aftermath; so did many
economists. Most famously, in 2010 a who's who of Republican economists denounced the efforts
of the Federal Reserve to fight unemployment, warning that they risked "currency debasement
and inflation."
Were these economists arguing in good faith? Even at the time, there were good reasons to
suspect otherwise. For one thing, those terrible, irresponsible Fed actions were pretty much
exactly what Milton Friedman prescribed for depressed economies. For another, some of those
Fed critics engaged in Donald Trump-like conspiracy theorizing, accusing the Fed of printing
money, not to help the economy, but to "bail out fiscal policy," i.e., to help Barack
Obama.
It was also telling that none of the economists who warned, wrongly, about looming
inflation were willing to admit their error after the fact.
But the real test came after 2016. A complete cynic might have expected economists who
denounced budget deficits and easy money under a Democrat to suddenly reverse position under
a Republican president.
And that total cynic would have been exactly right. After years of hysteria about the
evils of debt, establishment Republican economists enthusiastically endorsed a budget-busting
tax cut. After denouncing easy-money policies when unemployment was sky-high, some echoed
Trump's demands for low interest rates with unemployment under 4 percent -- and the rest
remained conspicuously silent.
What explains this epidemic of bad faith? Some of it is clearly ambition on the part of
conservative economists still hoping for high-profile appointments. Some of it, I suspect,
may be just the desire to stay on the inside with powerful people.
But there's something pathetic about this professional self-abasement, because the rewards
center-right economists long for haven't come, and never will.
It's not just that Trump has assembled an administration of the worst and the dimmest. The
truth is that the modern G.O.P. doesn't want to hear from serious economists, whatever their
politics. It prefers charlatans and cranks, who are its kind of people.
So what we've learned about economics these past two years is that many conservative
economists were, in fact, willing to compromise their professional ethics for political ends
-- and that they sold their integrity for nothing.
We All Have a Stake in the Stock Market, Right? Guess Again
By PATRICIA COHEN
Take a deep breath and relax.
The riotous market swings that have whipped up frothy peaks of anxiety over the last week
-- bringing the major indexes down more than 10 percent from their high -- have virtually no
impact on the income or wealth of most families. The reason: They own little or no stock.
A whopping 84 percent of all stocks owned by Americans belong to the wealthiest 10 percent
of households. And that includes everyone's stakes in pension plans, 401(k)'s and individual
retirement accounts, as well as trust funds, mutual funds and college savings programs like
529 plans.
"For the vast majority of Americans, fluctuations in the stock market have relatively
little effect on their wealth, or well-being, for that matter," said Edward N. Wolff, an
economist at New York University who recently published new research * on the topic....
What I could find says 401(k)s have $5.6T, IRAs have $2.5T, and when you add in pensions, the
total is $29 trillion. Not sure when those numbers are from.
Hard to know what part of that is stocks vs. bonds.
As of last April, US stock markets had $34 trillion and the rest of the world $44 trillion
equiv.
So, if IRA, 401(k) and retirement plans have almost as much wealth as the total of us
stocks, and that is 16% of all stocks... does that mean we
1) Americans own a lot more foreign stocks than foreigners own american stocks
or
2) 84% of retirement assets are bonds?
There is, what? $50 trillion is US debt, much of it backed by bonds.
So, $30 trillion retirement assets, $24.5T bonds and $5.5 trillion stocks... such that
$5.5T is 16% of $34T?
"And it certainly made most Americans poorer. While 2/3 of the corporate tax cut may have
gone to U.S. residents, 84 percent of stocks are held by the wealthiest 10 percent of the
population. Everyone else will see hardly any benefit."
Wildly unsubstantiated first sentence, though the rest seems likely true. Whether the bulk
went to tax cuts for domestic or foreign national or into the furnace, there was indeed some
sliver that actually went to the rest of us.
Efficiency of what, I might ask? Efficiency of shipping goods halfway around the world from
where people work for less in less safe environments is really the efficiency of theft by
capitalists, not the efficiency of production. Taking from the land and sea and dumping waste
into the land, sea, and air is the efficiency of theft by capitalists too, not the efficiency
of resource use. We are very efficient at making billionaires from externalized costs. We
continue to cheaply sell ourselves out because the price is right. Ask Paine what lies hidden
in the price?
I would prefer unhiding externalized costs and allocating domestic labor to pay those costs,
not with taxes, but with production of domestic goods and the elimination of pollutants and
managed use of limited resources. That's just me and entirely off the subject when it comes
to macroeconomics.
In any case, I am also for Paine's KLV full employment macroeconomics. If anything KLV
macro is more accessible both politically and intellectually than the kinds of price
movements that would be required to place environmentally sustainable caps on carbon
emissions or the commercial menhaden catch. A nominal interest rate for interbank lending
that was maintained by the Fed to persist at just the rate of inflation except for lower when
necessary to recover from a recession is not a terrible thing. The consequence of braking the
economy just to avoid hitting some inflation target is reckless driving. As we know the crash
victims are always labor.
You need to separate Paine's economics from his politics. He believes a peoples' party can
deliver that. It cannot. It will not. As efficiency goes out the door when a small,
unregulated group controls everything. Not to say our version of capitalism has anywhere near
the government regulation I think it needs to reach your(and my) goals. But it is light years
ahead of Paine's dreams.
Paine's economics are insightful and useful. Paine's politics are bifurcated. Paine is as
much for a progressive liberal democrat as he is for an enlightened communist dictator. Which
do you think has a greater chance of actually ever existing in this century?
I'm all in on Paine's economics, but I believe his politics make him an opponent to ever
coming up with progressive liberal democrats running the country.
All or nothing with him, and that makes it beyond hard to move towards that goal. Many in
here like that. I admire them for going through their life without once ever settling for
anything but perfect. I never had that opportunity.
A bunch of small steps are necessary, as the Founders insured that. Raging against those
facts are immense negatives. And it is why Reps win elections.
I am largely in concurrence with you, but I do have some specific caveats.
At least in my part of the country Paine's far left politics are not representative of
anything that we come into contact with in public life. Your politics are bit left of us
here. I am the far left in these parts. Paine's more populous left side is barely represented
by any group in my reality. So, for me, Paine is a unique curiosity reminiscent of my
socialist friends from the 60's and early 70's for which I have seen no analog since the
introduction of Disco and double-knit leisure suits.
The EV crowd in general is a microcosm of nerdiness rather than a microcosm of well
informed constituencies of the US unrepresentative "democracy." There is nothing unsettling
about it. This crowd is as normal as the characters of "Big Bang Theory."
Republicans win elections because they get the most votes. The VA voter turnout for 2018
was almost 60%, well above 2014 and 2010 midterms which were just above 40%. Most people
think that Trump is the most politically divisive POTUS in history, but I think nothing in my
life has done more to unify the Democratic Party given they can curb their enthusiasm about
beating Trump in 2020 enough to not rip the party apart over who gets the spoils.
Turnout for POTUS election in VA has been above and sometimes well above 70% for every
POTUS election since 1975 except for 2000. Turnout for VA gubernatorial elections has been
between 40% and 50% for each election from 1997 up through 2017, but ran much higher before
motor voter stopped the purging of voter registration rolls. VA elects state legislators in
off years for statewide elections with just over 30% of voters showing up.
"...My point is that when you reduce the cost of doing business, or reduce the credit
worthiness of a borrower, you will see greater inefficiency.
Digging holes and filling them in is one way to spend money. Building a road or a building
is another.
Which would you prefer?"
[While I would prefer bridges to digging holes and filling them, my hesitation in
answering this question was with the assumption that lower interest rates generate more
wasteful investment, despite that I know it to be true in some contexts. Speculation is the
problem more than real projects by far. Diversity among investments can be a very good thing.
Failure in this context is just a consequence of innovation by trial and error, one of the
more efficient means. Besides, for private investment the risk spread limits useless
excursions, while the state needs conscious limits on pork perhaps, but pork is also a useful
medium of political exchange. Uncle's discretionary spending is a very small pot of
gold.]
" Many in here like that. I admire them for going through their life without once ever
settling for anything but perfect. I never had that opportunity.
A bunch of small steps are necessary, as the Founders insured that. Raging against those
facts are immense negatives. And it is why Reps win elections."
The New Deal.
The Great Society.
Social Security. Medicare. Medicaid.
EMichael would have argued against all of them as overreaching.
His excuse for the Democrats was that past Presidents had large majorities in
Congress.
He would say the country is too conservative and racist. But they like those programs
now.
"Lower interest make business plans much easier. In doing so, risks are taken that should not
be taken, thus increasing inefficiency.
This is especially true when the planners carry absolutely no financial risk themselves on
a project."
[I understood what you were going for and do not doubt that you have specific instances for
which you are sure that is true. For a few years prior to 2008 then I am sure that was true,
but those "animal spirits" were drunk on more than just low interest rates. There was a
specific sequence of events that played out over a long period of time bringing the US
economy to the precipice of financial system euphoria over the infallibility of markets.
Lenders and borrowers and especially middlemen stared down into the abyss and then kept on
truckin'. Then we all heard a big splat!
Now is not then. Some future now may be then again if we forget about then, but it takes a
lot of stupid to get there, not just low interest rates. Taking a bit more risk, but without
the stupid is how we learn from failure to achieve greater success.
If either the dot.com splat or the mortgage splat were not clearly visible at least three or
four years before the splat then either you need a new prescription for your eye glasses or
you need to step out of that fog that you were living in.
"success through failure" has become a norm of American business, with the PotUS as the
perfect example.
He never got into the casino, steak, wine, water, university, etc. businesses with intent
on making money in those businesses. Heck, he barely breaks even on the condo and golf
businesses.
He creates the towers and golf resorts to promote the name, and promotes the name to be
able to lease it to doomed businesses which he starts with the intent of losing money on the
leasing of his name. I suspect the most profitable thing he's ever done was "realty tv" host
and having a book ghost-written in his name.
And yes, low interest rates DO create easy money, and much of it does find its way into
"success through failure" investments. Why would you loan money to a business that you know
was a scam just created to accumulate debt then go bust? Because you can securitize the debt
and sell it off to Main Street suckers to eat the loss.
Why else "success through failure". Well, I've worked for a company that dumped a lot of
money into a venture it knew was doomed long-term. Why? Because it intended to go IPO, and it
needed the (unprofitable) revenue from the doomed venture to pump its price in the IPO.
I think we'd all agree that "success through failure" is terrible and wish it would go
away. Problem is, it works.
Regarding "Success through failure" I was thinking in terms of the dot.com boom from which
sprang the broadband Internet and Amazon. Out there in Phoenix AZ where you and EMichael live
things must be really crazy. Back in 70's Phoenix was the yuppy Mecca. What happened?
True, not all of the dot.com was bad investment. Just most.
We got a lot of housing built during the housing boom too. Too bad most of it was
2000-3000 sqft McMansions on golf courses, 50 miles from any jobs.
"Out there in Phoenix AZ where you and EMichael live things must be really crazy."
1970 Phoenix metro had 1 million people. Today we're at 4.75 million.
Politics are a mess. Big money is pushing to constantly lower taxes, but now people are
pushing back wanting more funding for schools. Surprisingly, we've passed phased in $12
minimum wage and medical marijuana (recreational failed by less than 1%), and now have split
representation at the federal level indicating a move toward liberal.
And yet, we'll still very Republican in the state house and go highly conservative on many
other issues such as animal rights. A recent "green energy initiative" failed ugly.
So, to sum it up... Pretty Liberal, but Very CONservative, with a HUGE swing vote that
goes this-way-and-that in random directions and on different issues...
...but in general want low taxes, are hate big government...
...except on the things like Social Security, Medicare, Medicaid, Defense, education,
transportation, police, fire, courts, justice system, boarder security, anti-terrorism, and
the rest of stuff government actually spends almost all of its money on...
... but are all for getting rid of all the wasteful government that practically doesn't
really exist...
... and we definitely want religious freedom, as long as that religion is Christianity and
the freedom is to force their views onto others, and not allow other religions to have a
place in society.
No one notices that the biggest factor in the housing bubble was bush ordering the OCC to
take regulation of national banks out of the hands of the states.
The population increase? People would have to be somewhere, and unlike coastal California
with those stupid oceans, bays and mountains... Phoenix has plenty of open space.
2000-3000 sqft mcmansions 50 miles from jobs? Probably true. Without the housing bubble we
would have hit the wall on housing and caused massive rent spike a decade ago instead of a
few years ago. With that massive rent increase then instead of now, meaning that a decade ago
we would have seen the in-building of small apartments and condos that we are now
getting.
Net, we probably would have been better off with more in-building of smaller, multi-family
units instead of massive sprawl of McMansions.
Don't complain too much. The "massive sprawl of McMansions" is a sure sign of widespread
prosperity. Here in eastern Henrico County VA we have the massive sprawl of McCracker boxes
instead although not just crackers live in them. McMansions are usually on at least 1/2 acre
lots, while McCracker boxes are built so close together that most of the time there was not
room left for a driveway and people park on the street except that some of those streets are
actually the highways to the neighboring cracker box town. On street parking is just one sign
of poverty. There are also drug related shootings just like in the big city.
In eastern Henrico there are only a few small McMansion developments in prime real estate
overlooking the flood plain of the James River where there is any such high ground in eastern
Henrico near the river. Chesterfield County across the James River has the advantage of very
high ground near the James River at River's Bend, a.k.a, Meadowville, where there is plenty
room for a golf course and marina as well as loads of McMansions and high-end apartment
buildings. High and dry western Henrico County is where they build the McMansions along with
all the exclusive high end shopping. The "Sad-eyed Lady of the Lowlands" was probably sad
because her basement flooded whenever it rained:<)
I was adding a tad to the "inefficiencies" discussion caused by disconnecting loan
origination from loss risk.
I got my piece of the giant federal government giveaway needed to clean up the mess. In
2011 I bought a 1000 sqft condo for $48K that I now have leased out for a nice cash-flow
positive $600+ a month and true after-tax profit of about the same $600 a month (add $100 of
the payment that is principal reduction, then subtract 22% income tax on $500 a month ($700
profit - $200 depreciation)).
If you notice the purchase price doesn't match the depreciation, yeah, I've done over $20K
in additional capital improvements that increase the base including new roof, new HVAC,
replaced all aluminum windows and doors with high-E, gutted and replaced the kitchen and both
baths. Summer cooling bill was cut by more than half from ~$300 to ~$125 by the new windows
and doors and more efficient HVAC, increasing the monthly rent accordingly.
I've only been spending abut $400 of that $600 profit, letting the rest accumulate for
maintenance, repairs, upgrades.
Oh, I also save about $250 a month on the mortgage of my primary by locking in 3% interest
rate.
Not big deals in the grand scheme, but the boom->crash->rent squeeze worked out okay
for me personally.... for now.
To be perfectly honest, it is exactly those kinds of houses that the Phoenix market needs
a lot more of.
Switching from those to McMansions, then hardly any construction at all for 6 or 7 years,
is why there is such a crunch on housing, and skyrocketing rents and house prices now.
Even now they aren't building many of those small single family homes.
They are building redevelopment/in-fill condos in downtown/near ASU in Tempe and
apartments in the middle-burbs.
The Tax Cut and the Balance of Payments (Wonkish)
Lots of financial maneuvering, signifying nothing
By Paul Krugman
What tax cuts were supposed to do
A tax cut for corporations looks, on its face, like a big giveaway to stockholders, mainly
bypassing ordinary families: of stocks held by Americans, 84 percent are held by the
wealthiest 10 percent; * 35 percent of U.S. stocks are held by foreigners. **
The claim by tax cut advocates was, however, that the tax cut would be passed through to
workers, because we live in an integrated global capital market. There were multiple reasons
not to believe this argument in practice, but it's still worth working through its
implications....
The key point to realize is that in today's globalized corporate system, a lot of any
country's corporate sector, our own very much included, is actually owned by foreigners,
either directly because corporations here are foreign subsidiaries, or indirectly because
foreigners own American stocks. Indeed, roughly a third of U.S. corporate profits basically
flow to foreign nationals – which means that a third of the tax cut flowed abroad,
rather than staying at home. This probably outweighs any positive effect on GDP growth. So
the tax cut probably made America poorer, not richer.
And it certainly made most Americans poorer. While 2/3 of the corporate tax cut may have
gone to U.S. residents, 84 percent of stocks are held by the wealthiest 10 percent of the
population. Everyone else will see hardly any benefit....
Steven Rattner's Charts in the New York Times Don't Show He Says They Show
By Dean Baker
Steven Rattner used his New York Times column * to present a number of charts to show
Donald Trump's failures as president. While some, like the drop in enrollments in the health
care exchanges, do in fact show failure, others do not really make his case.
For example, he has a chart with a headline "paltry raise for the middle class." What his
chart actually shows is that middle class wages, adjusted for inflation, fell sharply in the
recession, but have been rising roughly 1.0 percent a year since 2014. They recovered their
pre-recession levels in 2017 and now are almost a percentage point above the 2008 level. This
is not a great story, but the picture under Trump is certainly better than under Obama. (This
wasn't entirely Obama's fault, since he inherited an economy that was failing.)
The chart shows more rapid growth at the bottom of the pay ladder and a modest downturn
under Trump for those at the top. By recent standards, this is not a bad picture, even if
Trump does not especially deserve credit for it. (He came in with an unemployment rate that
was low and falling.)
Rattner also presents as a bad sign projections for fewer Federal Reserve rate hikes.
While one basis for projecting fewer rate hikes is that the economy now looks weaker for 2019
than had been thought earlier in the year (but still stronger than had been projected in
2016), another reason is that inflation is lower than expected. Economists have consistently
over-estimated the impact that low unemployment would have on the inflation rate. With
inflation coming in lower than projected, there is less reason for the Fed to raise
rates.
Contrary to what Rattner is implying, this is a good development. It means that the
unemployment rate can continue to fall and workers at the middle and the bottom of the pay
ladder can continue to see real wage gains.
Rattner also shows us how growth projections for the U.S. and the world have been lowered
since June of 2018. It's not clear how much Trump can be held responsible for growth in the
EU (try blaming the European Commission's austerity drive) and the rest of the world, but his
argument about the U.S. is pretty weak. The 2.4 percent growth projection from December 2018
is actually up 0.1 percentage point from the June projection. More importantly, it is up from
a projection of 1.7 percent from January of 2017, the month Trump took office.
Then we have the chart showing the rise in the debt relative to GDP. While Rattner is
right that the tax cuts to the rich were a waste of resources, the higher debt to GDP ratio
is basically meaningless. (Japan's debt to GDP ratio is almost 250 percent and the current
interest rate on its long-term bonds is 0.00 percent.)
If anyone is seriously concerned about the debt that the government is passing on to
future generations then it is also necessary to include the rents associated with patent and
copyright monopolies. These monopolies are alternative mechanisms to direct funding that the
government uses to pay for services (i.e. research and creative work).
To take the most important case, suppose the government were the replace the $70 billion
(0.35 percent of GDP) in patent monopoly supported research that the pharmaceutical industry
conducts each year with direct funding of $70 billion. All research findings could then be
placed in the public domain and new drugs would sell at generic prices.
Rattner and his crew would count the $70 billion in addition spending as an addition to
the debt and deficit. However, when the industry is able to charge the public an extra $360
billion ** (1.8 percent of GDP) a year in higher drug prices due to patent monopolies and
related protections, Rattner and company choose to ignore the burden. This sort of groundless
debt fear mongering deserves only ridicule; it is not serious economic analysis.
Trump has done many awful things as president and threatens to do many more. But this is
not a reason to adopt Trumpian tactics, the data provide plenty of grounds to attack his
performance without playing games with it.
E.J. Dionne Provides Classic Example of Liberals Missing the Boat
By Dean Baker
I often rail against liberals who wring their hands over the unfortunate folks who have
been left behind by globalization and technology. E.J. Dionne gave us a classic example * of
such hand-wringing in his piece today on the need to help the left behinds to keep them from
becoming flaming reactionaries.
For some reason, it is difficult for many liberals to grasp the idea that the bad plight
of tens of millions of middle class workers did not just happen, but rather was deliberately
engineered. Longer and stronger patent and copyright protection did not just happen, it was
deliberate policy. Subjecting manufacturing workers to global competition, while largely
protecting doctors, dentists, and other highly paid professionals was also a policy
decisions. Saving the Wall Street banks from the consequences of their own greed and
incompetence was also conscious policy.
I know it's difficult for intellectuals to grasp new ideas, but if we want to talk
seriously about rising inequality, then it will be necessary for them to try. (Yeah, I'm
advertising my - free - book "Rigged: How Globalization and the Rules of the Modern Economy
Were Structured to Make the Rich Richer" ** again.) Anyhow, let's hope that in 2019 we can
actually talk about the policies that were put in place to redistribute income upward and not
just pretend that Bill Gates and his ilk getting all the money was a natural process.
In fact, over the course of 2018, Inhofe has made 57 individual stock trades, according to
Senate disclosure forms .
The value of these trades totaled somewhere between $1.72 million and $4.11 million. In 2017,
according to Inhofe's annual
report , he made another 52 trades.
Congress attempted to prevent legislators from insider trading with the 2012 STOCK
Act , which prohibits members and their staffs from exploiting insider information
discovered in the course of policy deliberations. But unlike corporate "insiders," members of
Congress are not required to establish arms-length trading plans --
nor has the House fully cooperated with efforts by the Securities and Exchange Commission
to investigate potential wrongdoing.
When compared to corporate insiders, members of Congress are exposed to a much broader array
of insider information which implicates a wide range of companies. Given that members of
Congress hold a unique position of public trust, Sens. Jeff Merkley, D-Ore., and Sherrod Brown,
D-Ohio, both potential Democratic presidential candidates, want to put a stop to all the
trading. Last week, they introduced
legislation that would permanently ban members of Congress and senior staff from trading
individual stocks.
"We should not be in the position of thinking about legislation in the context of personal
investment," Merkley told The Intercept in an interview. "As long as you own stocks, it's hard
to rule out of your mind. And the public sees it as a conflict of interest."
Yesterday I had a conversation about my work, about how and why I started studying
inequality more than 30 years ago, what was my motivation, how it was to work on income
inequality in an officially classless (and non-democratic) society, did the World Bank care
about inequality etc. The interviewer and I thus came to some methodological issues and to
the inescapable influence of Marx on my work. I want to present it more systematically in
this post.
The most important of Marx's influences on people working in social sciences is, I think,
his economic interpretation of history. This has become so much part of the mainstream that
we do no longer associate it with Marx very much. And surely, he was not the only one or even
the first to have defined it. But he applied it most consistently and most creatively.
Even when we believe that such an interpretation of history is common-place today, this
still is not entirely so. Take the current dispute about the reasons that brought Trump to
power. Some (mostly those who believe that everything that went on previously was fine) blame
a sudden outburst of xenophobia, hatred, and misogyny. Others (like myself) see that outburst
as having been caused by long economic stagnation of middle class incomes, and rising
insecurity (of jobs, health care expenses, inability to pay for children's education). So the
latter group tends to place economic factors first and to explain how they led to racism and
the rest. There is a big difference between the two approaches -- not only in their diagnosis
of the causes but more importantly in their view of what needs to be done.
The second Marx's insight which I think is absolutely indispensable in the work on income
and wealth inequality is to see that economic forces that influence historical developments
do so through "large groups of people who differ in their position in the process of
production", namely through social classes. The classes can be defined by the difference in
the access to the means of production as Marx insisted but not only by that. Going back to my
work in socialist economies, there was a very influential left-wing critique of socialist
systems which held that social classes in that system were formed on the basis of
differential access to state power. Bureaucracy can indeed be seen as a social class. And not
only under socialism, but also in pre-capitalist formations where the role of the state as an
"extractor of the surplus value" was important, from the ancient Egypt to the medieval
Russia. Many African countries today can be usefully analyzed using that particular lens. In
my forthcoming "Capitalism, Alone" I use the same approach with respect to the countries of
political capitalism, notably China.
But to underline: class analysis is absolutely crucial for all students of inequality
precisely because inequality before it becomes an individual phenomenon ("my income is low")
is a social phenomenon that affects large swathes of people ("my income is low because women
are discriminated", or because African Americans are discriminated, or poor people cannot
access good education etc.). To give a couple of examples of what I have in mind here:
Piketty's work especially in "Top incomes in France" and Rodriguez Weber's book on Chilean
income distribution over the long-term ("Desarrollo y desigualdad en Chile (1850–2009):
historia de su economía política"). On the other hand, I think that Tony
Atkinson's work on British and various other income and wealth distributions failed to
sufficiently integrate political and class analysis.
This is also where the work on inequality parts ways with one of the scourges of modern
micro- and macro-economics, the representative agent. The role of the representative agent
was to obliterate all meaningful distinctions between large groups of people whose social
positions differ, by focusing on the observation that everybody is an "agent" who tries to
maximize income under a set of constraints. This is indeed trivially true. And by being
trivially true it disregards the multitude of features that make these "agents" truly
different: their wealth, background, power, ability to save, gender, race, ownership of
capital or the need to sell labor, access to the state etc. I would thus say that any serious
work on inequality must reject the use of representative agent as a way to approach reality.
I am very optimistic that this will happen because the representative agent itself was the
product of two developments, both currently on the wane: an ideological desire, especially
strong in the United States because of the McCarthy-like pressures to deny the existence of
social classes, and the lack of heterogeneous data. For example, median income or income by
decile was hard to calculate but GDP per capita was easy to get hold of.
The third extremely important Marx's methodological contribution is the realization that
economic categories are dependent on social formations. What are mere means of production
(tools) in an economy composed of small-commodity producers becomes capital in a capitalist
economy. But it goes further. The equilibrium (normal) price in a feudal economy, or in a
guild system where capital is not allowed to move between the branches will be different from
equilibrium prices in a capitalist economy with the free movement of capital. To many
economists this is still not obvious. They use today's capitalist categories for the Roman
Empire where wage labor was (to quote Moses Finley) "spasmodic, casual and marginal".
But even if they do not realize it fully, they de facto acknowledge the importance of
institutional set up of a society in determining prices not only of goods but also of the
factors of production. Again, we see it daily. Suppose that the world produces exactly the
same set of commodities and the demand for them is exactly the same, but it does so within
national economies that do not permit movement of capital and labor, and then does it in an
entirely globalized economy where borders do not exist. Clearly, the prices of capital and
labor (profit and wage) will be different in the latter, the distribution between capital
owners and workers will be different, prices will change as profits and wages change, incomes
will change too and so will consumption patterns, and ultimately even the structure of
production will be altered. Indeed this is what today's globalization is doing.
The fact that property relations determine prices and structure of production and
consumption is an extremely important insight. The historical character of any institutional
arrangement is thereby highlighted.
The last among Marx's contribution that I would like to single out -- perhaps the most
important and grandiose -- is that the succession of socio-economic formations (or more
restrictively, of the modes of production) is itself "regulated" by economic forces,
including the struggle for the distribution of the economic surplus. The task of economics is
nothing less than global historical: to explain the rise and fall not solely of countries but
of different ways of organizing production: why were nomads superseded by the sedentary
populations, why did Western Roman Empire break into a few large feudal-like demesnes and
serfs, while the Eastern Roman Empire remained populated by small landholders, and the like.
Whoever studies Marx can never forget the grandiosity of the questions that are being asked.
For such a student then using supply and demand curves to determine the cost of pizza in his
town will indeed be acceptable, but surely will never be seen as the prime or the most
important role of economics as a social science.
Rather than investing capital in new manufacturing capacity, new housing, public
utilities, :
'Investment capital' is used to buy an existing business showing a 6% ROI at a price of
twice its book value. New owner, wanting to make at least 6% return on their investment
(ROTI), brings in 'Al' to optimize operations and maximize sales. After 1 year of not getting
to anywhere near 6% ROI, 'Al' is let go and 'Jack' is brought in. Under 'Jack', the business
loses market share and ROI falls to 2... Nation loses ever more manufacturing capacity
Investment banker who thinks any viable business should return at least 12%, buys apple
orchard, can't get the return up, so sells the orchard to a real estate developer. Apple
imports soar.
Really big Investment Bank (RBIB) thinks a Certain Large Utility should pay its
shareholders 12%, buys controlling interest. In order to pay the 12%, management cuts back on
maintenance and safety, and contracts out significant operations. Over the next few years,
the utility; found responsible for multiple accidents leading to injury and death, and
destruction of property; is forced to file for bankruptcy.
RBIB thinks that all utilities should be privatized -- that markets are always best --
buys public water systems in undeveloped nations and charges the poor citizens 'market'
prices.
RBIBs and Wall Street, deciding that student loans are a good market opportunity, because
they can, buy themselves a few easily bent congresscritters (senators from ignorant, backward
states have inordinate power and can often be bought on the cheap), write the lender
favorable legislation for these bought and paid for; then get said passed.
Any debt is an investment opportunity, consumer debt is boundless, and if you own congress
credit card debt can be made tougher to escape than mortgages, bonds,
For the sophisticated wealthy investor there are hedge funds. Hedge funds can invest in
anything.
Venture capitalists invest in the high risk, potential high return start-ups and
emergents.
Rentiers, already having their capital invested, seek to increase their return. At times
rent increases are limited by competition. Not now in places like San Francisco, New York
City, Seattle, ... While prattling that the market always know best, greedy landlords in
California keep raising rents to 'market level' creating an ever raising rents positive
feedback loop (a rent bubble) that leads to ever more homelessness. The higher the rents, the
higher the property value, the higher the rents, ...
Can rent control be made to work efficiently indefinitely, and if so how? I have no proper
idea. Hong Kong used a seemingly efficient form of rent control for decades, though Milton
Friedman who advised the governor of the then British colony preferred not to notice. China
is working on rent control currently.
In SF it is impossible for rent control to work. There simply are not enough units to satisfy
demand. You cannot create millions of jobs while restricting the building of any new housing.
There is enough of a boom that the cost of materials is become a problem now that just a few
new units are in the pipeline. I don't see how you can have price controls on one side and a
artificial constraint on supply and not have all of the not rent controlled properties get
insanely expensive.
"In SF it is impossible for rent control to work. There simply are not enough units to
satisfy demand. You cannot create millions of jobs while restricting the building of any new
housing. There is enough of a boom that the cost of materials is become a problem now that
just a few new units are in the pipeline. I don't see how you can have price controls on one
side and a artificial constraint on supply and not have all of the not rent controlled
properties get insanely expensive."
Cant build affordable housing when Prop 13 prevents tax funded roads, water, sewer,
transit, schools to enanle building on the abundant vacant land.
I know you have likely bought the right-wing claim that rezoning single family to high
rise housing will increase the supply of modest cost single family houses, because the more
you restrict supply, the more supply you get.
California has had plenty of waves of rapid housing development which was quickly followed
by crisis requiring tax hikes and massive construction of infrastructure to provide roads,
water, schools, etc.
It was these tax hikes that led to popular support for Prop 13.
Around the same time, NH got stronger zoning plus the Union Leader "the pledge" campaign,
the pledge to starve NH of tax revenue to fund public investment. For the same reason: rapid
population growth from uncontrolled development causing crisis in public services like
schools, transportation, and pollution.
Tanstaafl
Only tax and spend allows affordable population growth.
I have written here a number of times about the perverse incentives of prop 13. SF needs to
build more mid and high rise. They need to replace the vacant warehouses with
midrise/highrise. This is the only way housing becomes affordable (that and inclusionary
housing that is reasonable and can get built). I certainly am no fan of single family zoning
nor am I for restricting supply.
"I certainly am no fan of single family zoning nor am I for restricting supply."
So, you hate most people living in SF because they make housing too expensive?
The past few decades have eliminated most single family homes in the city.
Now you want to eliminate all businesses that employ working class people?
Nature seems to be your enemy. You need a vocano, which can't exist in the bay area, to
add land so supply can increase, like in Hawaii.
For the Bay area, there is plenty of land, but no taxes to pay for building speedy
transportation, no taxes to pay for schools, water, sewer, etc. But its the speedy
transportation part that is the biggest barrier. For decades, new housing means slower
transportation, thanks to Prop 13, and its free lunch economics behind it.
"The true conservative seeks to protect the system of private property and free enterprise by
correcting such injustices and inequalities as arise from it. The most serious threat to our
institutions comes from those who refuse to face the need for change. Liberalism becomes the
protection for the far-sighted conservative. In the words of the great essayist [Lord
Macaulay, not named by FDR], "Reform if you would preserve." I am that kind of conservative
because I am that kind of liberal." FDR
The Case for a Mixed Economy
Maybe not everything should be privatized
By Paul Krugman
A mind is a terrible thing to lose, especially if the mind in question is president of the
United States. But I feel like taking a break from that subject. So let's talk about
something completely different, and probably irrelevant.
I've had several interviews lately in which I was asked whether capitalism had reached a
dead end, and needed to be replaced with something else. I'm never sure what the interviewers
have in mind; neither, I suspect, do they. I don't think they're talking about central
planning, which everyone considers discredited. And I haven't seen even an implausible
proposal for a decentralized system that doesn't rely on price incentives and self-interest
– i.e., a market economy with private property, which most people would consider
capitalism.
So maybe I'm being dense or lacking in imagination, but it seems to be that the choice is
still between markets and some kind of public ownership, maybe with some decentralization of
control, but still more or less what we used to mean by socialism. And everyone either thinks
of socialism as discredited, or pins the label on stuff – like social insurance
programs – that isn't what we used to mean by the word.
But I've been wondering, exactly how discredited is socialism, really? True, nobody now
imagines that what the world needs is the second coming of Gosplan. But have we really
established that markets are the best way to do everything? Should everything be done by the
private sector? I don't think so. In fact, there are some areas, like education, where the
public sector clearly does better in most cases, and others, like health care, in which the
case for private enterprise is very weak. Add such sectors up, and they're quite big.
In other words, while Communism failed, there's still a pretty good case for a mixed
economy – and public ownership/control could be a significant, although not majority,
component of that mix. My back of the envelope says that given what we know about economic
performance, you could imagine running a fairly efficient economy that is only 2/3
capitalist, 1/3 publicly owned – i.e., sort-of-kind-of socialist.
I arrive at that number by looking at employment data. What we see right away is that even
now, with all the privatization etc. that has taken place, government at various levels
employs about 15 percent of the work force – roughly half in education, another big
chunk in health care, and then a combination of public services and administration.
Looking at private sector employment, we find that another 15 percent of the work force is
employed in education, health, and social assistance. Now, a large part of that employment is
paid for by public money – think Medicare dollars spent at private hospitals. Much of
the rest is paid for by private insurers, which exist in their current role only thanks to
large tax subsidies and regulation.
And there's no reason to think the private sector does these things better than the
public. Private insurers don't obviously provide a service that couldn't be provided,
probably more cheaply, by national health insurance. Private hospitals aren't obviously
either better or more efficient than public. For-profit education is actually a disaster
area.
So you could imagine an economy in which the bulk of education, health, and social
assistance currently in the private sector became public, with most people at least as well
off as they are now.
Then there are other private activities that could plausibly be public. Utilities are
heavily regulated, and in some cases are publicly owned already. Private health insurance
directly employs hundreds of thousands of people, with doubtful social purpose. And I'm sure
I'm missing a few others.
By and large, other areas like retail trade or manufacturing don't seem suitable for
public ownership – but even there you could see some cases. Elizabeth Warren is
suggesting public manufacture of generic drugs, which isn't at all a stupid idea.
Put all of this together, and as I said, you could see an economy working well with
something like 1/3 public ownership.
Now, this wouldn't satisfy people who hate capitalism. In fact, it wouldn't even live up
to the old slogan about government controlling the economy's "commanding heights." This would
be more like government running the boiler in the basement. Also, I see zero chance of any of
this happening in my working lifetime.
But I do think it's worth trying to think a bit beyond our current paradigm, which says
that anything you could call socialist has been an utter failure. Maybe not so much?
"Then there are other private activities that could plausibly be public. Utilities are
heavily regulated, and in some cases are publicly owned already."
I look at public utilities and see extremely weak regulation.
The free lunch economic criticism of public utility regulation until Jimmy Carter was it
increased consumer costs too much by paying too much to workers to provide too much service
and build too much capital.
And Germany and UK owned utilities more than the US, which meant that populists or
progressives, the Bernies and AOCs, demanded more mining of fossil fuels even when cheaper,
cleaner alternatives, were available.
How will Bernie and AOC create jobs when all their policies kill jobs, but prevent
creating new jobs in the US? Why won't they end up protecting coal mining jobs ten times more
than Trump? Or will they become Clinton: "your jobs that that made you middle class are never
coming back, and creating new jobs cost too much in higher taxes, so no new jobs".
Was and is the older liberal paradigm
Reinvigorated
Recall this De facto abandonment
Of organized labor
allowed full collaboration
Between progressive professional class
Elements
and major corporate bottom lines
ane and I want to take this opportunity to wish you and yours a very healthy and happy new
year.
It goes without saying that 2019 will be a pivotal and momentous time for our country and
the entire planet. As you know, there is a monumental clash now taking place between two very
different political visions. Not to get you too nervous, but the future of our country and
the world is dependent upon which side wins that struggle.
The bad news is that in the United States and other parts of the world, the foundations of
democracy are under severe attack as demagogues, supported by billionaire oligarchs, work to
establish authoritarian type regimes. That is true in Russia. That is true in Saudi Arabia.
That is true in the United States. While the very rich get much richer these demagogues seek
to move us toward tribalism and set one group against another, deflecting attention from the
real crises we face.
The good news is that, all across this country, people are getting politically involved
and are fighting back. They are standing up for economic, political, social and racial
justice.
In the last year we saw courageous teachers, in some of the most conservative states in
the country, win strikes as they fought for adequate funding for education.
We saw low paid workers at Amazon, Disney and elsewhere undertake successful struggles to
raise their wages to a living wage – at least $15 an hour.
We saw incredibly courageous young people, who experienced a mass shooting in their
school, lead successful efforts for commonsense gun safety legislation.
We saw diverse communities stand together in the fight against mass incarceration and for
real criminal justice reform.
We saw tens of thousands of Americans, from every walk of life, take to the streets and
demand that politicians respond to the global crisis of climate change.
As we enter 2019, it seems to me that we must mount a two-pronged offensive. First, we
must vigorously take on the lies, bigotry and kleptocratic behavior of the most irresponsible
president in the modern history of our country. In every way possible, we must stand up to
the racism, sexism, homophobia, xenophobia and religious intolerance of the Trump
administration.
But fighting Trump is not enough.
The truth is that despite relatively low unemployment, tens of millions of Americans
struggle daily to keep their heads above water economically as the middle class continues to
shrink.
While the rich get richer, 40 million live in poverty, millions of workers are forced to
work two or three jobs to pay the bills, 30 million have no health insurance, one in five
cannot afford their prescription drugs, almost half of older workers have nothing saved for
retirement, young people cannot afford college or leave school deeply in debt, affordable
housing is increasingly scarce, and many seniors cut back on basic needs as they live on
inadequate Social Security checks.
Our job, therefore, is not only to oppose Trump but to bring forth a progressive and
popular agenda that speaks to the real needs of working people. We must tell Wall Street, the
insurance companies, the drug companies, the fossil fuel industry, the military-industrial
complex, the National Rifle Association and the other powerful special interests that we will
not continue to allow their greed to destroy this country and our planet.
Politics in a democracy should not be complicated. Government must work for all of the
people, not just the wealthy and the powerful. As a new House and Senate convene next week,
it is imperative that the American people stand up and demand real solutions to the major
economic, social, racial and environmental crises that we face. In the richest country in the
history of the world, here are some (far from all) of the issues that I will be focusing on
this year. What do you think? How can we best work together?
Protect American democracy: Repeal Citizens United, move to public funding of elections
and end voter suppression and gerrymandering. Our goal must be to establish a political
system that has the highest voter turnout in the world and is governed by the democratic
principle of one person - one vote.
Take on the billionaire class: End oligarchy and the growth of massive income and wealth
inequality by demanding that the wealthy start paying their fair share of taxes. We must
rescind Trump's tax breaks for billionaires and close corporate tax loopholes.
Increase Wages: Raise the minimum wage to $15 an hour, establish pay equity for women and
revitalize the trade union movement. In the United States, if you work 40 hours a week, you
should not live in poverty.
Make health care a right: Guarantee health care for everyone through a Medicare-for-all
program. We cannot continue a dysfunctional healthcare system which costs us about twice as
much per capita as any other major country and leaves 30 million uninsured.
Transform our energy system: Combat the global crisis of climate change which is already
causing massive damage to our planet. In the process, we can create millions of good paying
jobs as we transform our energy system away from fossil fuel and into energy efficiency and
sustainable energy.
Rebuild America: Pass a $1 trillion infrastructure plan. In the United States we must not
continue to have roads, bridges, water systems, rail transport, and airports in
disrepair.
Jobs for All: There is an enormous amount of work to be done throughout our country
– from building affordable housing and schools to caring for our children and the
elderly. 75 years ago, FDR talked about the need to guarantee every able-bodied person in
this country a good job as a fundamental right. That was true in 1944. It is true today.
Quality Education: Make public colleges and universities tuition free, lower student debt,
adequately fund public education and move to universal childcare. Not so many years ago, the
United States had the best education system in the world. We much regain that status
again.
Retirement Security: Expand Social Security so that every American can retire with dignity
and everyone with a disability can live with security. Too many of our elderly, disabled and
veterans are living on inadequate incomes. We must do better for those who built this
country.
Women's rights: It is a woman, not the government, who should control her own body. We
must oppose all efforts to overturn Roe v. Wade, protect Planned Parenthood and oppose
restrictive state laws on abortion.
Justice for All: End mass incarceration and pass serious criminal justice reform. We must
no longer spend $80 billion a year locking up more people than any other country. We must
invest in education and jobs, not jails and incarceration.
Comprehensive immigration reform: It is absurd and inhumane that millions of hardworking
people, many of whom have lived in this country for decades, are fearful of deportation. We
must provide legal status to those who are in the DACA program, and a path to citizenship for
the undocumented.
Social Justice: End discrimination based on race, gender, religion, place of birth or
sexual orientation. Trump cannot be allowed to succeed by dividing us up. We must stand
together as one people.
A new foreign policy: Let us create a foreign policy based on peace, democracy and human
rights. At a time when we spend more on the military than the next ten countries combined, we
need to take a serious look at reforming the bloated and wasteful $716 billion annual
Pentagon budget.
In the New Year, let us resolve to fight like we have never fought before for a
government, a society and an economy that works for all of us, not just those on top.
The Ghost of Trump Chaos Future
Sorry, investors, but there is no sanity clause.
By Paul Krugman
Two years ago, after the shock of Donald Trump's election, financial markets briefly
freaked out, then quickly recovered. In effect, they decided that while Trump was manifestly
unqualified for the job, temperamentally and intellectually, it wouldn't matter. He might
talk the populist talk, but he'd walk the plutocratic walk. He might be erratic and
uninformed, but wiser heads would keep him from doing anything too stupid.
In other words, investors convinced themselves that they had a deal: Trump might sound
off, but he wouldn't really get to make policy. And, hey, taxes on corporations and the
wealthy would go down.
But now, just in time for Christmas, people are realizing that there was no such deal --
or at any rate, that there wasn't a sanity clause. (Sorry, couldn't help myself.) Put an
unstable, ignorant, belligerent man in the Oval Office, and he will eventually do crazy
things.
To be clear, voters have been aware for some time that government by a bad man is bad
government. That's why Democrats won a historically spectacular majority of the popular vote
in the midterms. Even the wealthy, who have been the prime beneficiaries of Trump policies,
are unhappy: A CNBC survey finds that millionaires, even Republican millionaires, have turned
sharply against the tweeter in chief.
But market behavior has, until recently, been a different story.
The reality that presidential unfitness matters for investors seems to have started
setting in only about three weeks (and around 4,000 points on the Dow) ago. First came the
realization that Trump's much-hyped deal with China existed only in his imagination. Then
came his televised meltdown in a meeting with Nancy Pelosi and Chuck Schumer, his abrupt
pullout from Syria, his firing of Jim Mattis and his shutdown of the government because
Congress won't cater to his edifice complex and build a pointless wall. And now there's buzz
that he wants to fire Jerome Powell, the chairman of the Federal Reserve.
Oh, and along the way we learned that Trump has been engaging in raw obstruction of
justice, pressuring his acting attorney general (who is himself a piece of work) over the
Mueller investigation as the tally of convictions, confessions and forced resignations
mounts.
But let's play devil's advocate here: Does all this Trump chaos matter for the economy, or
for the stock market (which isn't at all the same thing)? At first sight, it's not all that
obvious.
After all, aside from the prospect of trade war, none of Individual-1's tantrums,
unpresidential as they are, have much direct economic impact. Even the government shutdown
will impose only a modest drag on overall spending.
And even trade war might not do that much harm, as long as it's focused mainly on China,
which is only one piece of U.S. trade. The really big economic risk was that Trump might
break up Nafta, the North American trade agreement: U.S. manufacturing is so deeply
integrated with production in Canada and Mexico that this would have been highly disruptive.
But he settled for changing the agreement's name while leaving its structure basically
intact, and the remaining risks don't seem that large.
So why do investors seem to be losing their what-me-worry attitude? It's not so much what
Trump is doing, as what he might do in the future -- or, perhaps even more important, what he
might not do.
The truth is that most of the time, presidential actions don't matter much for the
economy; short-term economic management is mainly up to the Fed. But when bad things happen,
we do need the White House to step up. In 2008 and 2009, it mattered a lot that officials of
both the outgoing Bush administration and the incoming Obama administration responded
competently and intelligently to the financial crisis.
Unfortunately, there's no reason to expect a comparable degree of competence if something
goes wrong again.
Consider how the Trumpistas have responded to falling stocks. So far these are just a
minor economic bobble. Yet Trump himself, having claimed credit when stocks were rising, has
flown into a rage and lashed out; hence the attacks on Powell. Meanwhile, top officials are
still claiming that last year's tax cut was a triumph in the teeth of the evidence, and
issuing bizarre statements -- via Twitter -- about the health of the banks, which nobody was
questioning.
Now imagine how this administration team might cope with a real economic setback, whatever
its source. Would Trump look for solutions or refuse to accept responsibility and focus
mainly on blaming other people? Would his Treasury secretary and chief economic advisers
coolly analyze the problem and formulate a course of action, or would they respond with a
combination of sycophancy to the boss and denials that anything was wrong? What do you
think?
Let's be clear: There isn't an obvious crisis-level threat looming at the moment. But
growth is slowing, and as the bumper stickers don't quite say, stuff happens. And if and when
it does, the people who would be supposed to deal with it are the gang that can't think
straight. Merry Christmas.
"He might talk the populist talk, but he'd walk the plutocratic walk."
What does PK mean here by populist? Good or bad?
"In other words, investors convinced themselves that they had a deal: Trump might sound
off, but he wouldn't really get to make policy. And, hey, taxes on corporations and the
wealthy would go down.
But now, just in time for Christmas, people are realizing that there was no such deal --
or at any rate, that there wasn't a sanity clause. (Sorry, couldn't help myself.) Put an
unstable, ignorant, belligerent man in the Oval Office, and he will eventually do crazy
things."
Is this true. Are wealthy investor worried about Trump in particular? He just cut their
taxes.
"To be clear, voters have been aware for some time that government by a bad man is bad
government. That's why Democrats won a historically spectacular majority of the popular vote
in the midterms."
Not clear at all. Yes it had a large part to do with it. What was the Dems message? Did
they all talk about Trump?
Unfortunately PK is pulling this out of his behind to fill column space.
"Even the wealthy, who have been the prime beneficiaries of Trump policies, are unhappy: A
CNBC survey finds that millionaires, even Republican millionaires, have turned sharply
against the tweeter in chief.""
Again not clear that the wealthy are unhappy. They got massive tax cuts. There is no
populist movement challenging them.
"Again not clear that the wealthy are unhappy. They got massive tax cuts. There is no
populist movement challenging them."
So the rich guys behind Sears are really really happy?
Why hasn't Trump created millions of Sears customers flush with cash shopping at Sears? My
guess is the prime Sears customer before 1990 voted for and supports Trump. Sears was the
store for rural America, especially when you add in Kmart.
On the other hand, my guess is neither Bezos nor Warren Buffett nor Elon Musk is paying
significantly less in taxes as a result of the Trump tax cuts.
The corporations Bezos owns have no profits so paid no taxes on profits before. Ditto with
Elon Musk.
Buffett structured his coorporation based on the 50% plus tax on profits of the 60s, 70s,
80s which promoted owning assets for the very long term, and the tax law vhanges promoting
asset churn, pump and dump, did not change his theory of "wealth", so hes done nothing to
benefit from the tax cuts, but he sees harm to his businesses flowing from the Trump taxes
and cost cutting taking money out of consumer pockets, hurting his extensive consumer
business holdings long run.
(Insurers as holding companies pay taxes on profits differently than a shareholder
business does, so by owning the entire corporattion with profits flowing to the holding
company and then used to pay claims, no taxes are due. But increasing assets is capital gains
that are not taxed until sold, but Buffett almost never sells assets, except at a loss, which
means no taxes owed.)
Buffett companies pay lots of taxes, but on labor costs and on property, but has never
paid taxes on wealth, and seldom on profits, which was by Keynesian tax policy design.
Profits paid to workers to build more assets is the Keynesian ideal. More capital assets
destroys wealth abd increases labor costs to exceed capital asset prices.
The problem today is too little capitalism, too much rent seeking, too much restriction by
rent seekers on capitalists.
Trump and his administration are rent seekers who want to make capital much scarcer. They
hate China and Germany which built too much capital. And Bezos who pays too much to workers
to build ever more capital, increases the number of workers paid too much.
Wonder what McConnell thinks of Bezos. Is building a big distribution center in Kentucky a
good thing? Or is driving up wages in Kentucky a bad thing? Is higher worker incomes a good
thing, or is the higher living costs that result from higher wages a bad thing? Is stealing
jobs from liberal coastal elite cities a good thing, or does driving up living costs in
Kentucky to catch up with coastal elite suburban living costs a bad thing?
"So the rich guys behind Sears are really really happy?"
The rich get most of the capital income, from rent, dividends, interest, etc. they win no
matter what. They're invested in EVERYTHING and pay minions to try to earn them more than
average.
Heads they win, tails we lose.
The main thing is worker power. Krugman's take is - forgive me - a little naive. Or maybe
it is just meant for the naive bien pensant plebes like you and me.
It's hard to tell with Krugman. At least he and DeLong admit what Piketty has reported
even if they don't dwell on it.
We are ruled by an oligarchy. Most of the income goes to this oligarchy no matter the rent
seeking and living costs and profits and asset values etc. They win no matter what and they
pay people to obfuscate and spread propaganda about how we're a meritocracy where people earn
what they deserve.
"The truth is that most of the time, presidential actions don't matter much for the economy;
short-term economic management is mainly up to the Fed."
Free lunch economics!
The Fed has zero authority to manage the economy.
The economy is workers paying workers, through intermediaries.
The Fed can buy labor IOUs so past and future labor prices do not fluctuate wildly and
thus cause too little or too much paying for labor based market speculation on labor
prices.
Ie, if market speculation is that future labor prices will be significantly lower, workers
will not be paid the higher current price in expectation profit will be made paying the lower
price in the future. The Fed can buy labor futures to keep future prices as high as they are
today. However, labor can only be traded as assets. The Fed can never set labor prices by
paying workers.
Again. The Fed can never set labor prices by paying workers.
So, if businesses and government decides to kill jobs, the Fed is totally powerless.
While Bush and Obama were president, the policy priority was cutting paying workers,
driven by conservatives in control of the GOP.
And since Trump, the conservatives have been even more vigously trying to kill payments to
workers,, but wanting much more consumption spending.
However, no one has found a way to consume without paying workers to at least deliver the
goods made by not paying US workers. And the boomers are cashing in labor IOUs earned before
1990 and 2000 when they paid higher taxes and higher consumer prices.
I accumulated all my labor IOUs before 2000, and I count on the Fed to keep them from
becoming worth less or, worse, worthless.
But all the Fed is doing is creating labor IOUs that Millennials will need to buy with
labor without consumption.
If they don't, the economy will crash like it has in Greece, Venezuela, Germany before the
rise of Hitler, ...
Being about the same age as Trump, I expect to not be around when that happens. Which
means Trump knows he's eagerly pillaging and plundering the future.
Tanstaafl.
Remember, Venezuela was the richest nation in Latin America, and then wealth was taxed for
redistribution, and the wealth has vanished into nothingness, nowhere. Ie, if the rich simply
took the wealth and left, where are the Venezuela multibillionaires living today with all the
stolen trillions in Venezuela wealth?
It's Cold, Dark and Lacks Parking. But Is This Finnish Town the World's Happiest?
By Patrick Kingsley
Dec. 24, 2018
141
Leer en español
KAUNIAINEN, Finland -- Jan Mattlin was having what counts as a bad day in Kauniainen.
He had driven to the town's train station and found nowhere to park. Mildly piqued, he
called the local newspaper to suggest a small article about the lack of parking spots.
To Mr. Mattlin's surprise, the editor put the story on the front page.
"We have very few problems here," recalled Mr. Mattlin, a partner at a private equity
firm. "Maybe they didn't have any other news available."
Such is the charmed life in Kauniainen (pronounced: COW-nee-AY-nen), a small and wealthy
Finnish town that can lay claim to being the happiest place on the planet.
Public Ownership Is Suitable for All Sectors
Matt Bruenig December 24, 2018
Paul Krugman has a piece in the New York Times where he argues in favor of a mixed
economy. The piece is meant to be a limited defense of public ownership and production
against those who categorically argue against government enterprises. But Krugman's argument
ends up being far too limited in my view. Due to the wonders of our financial system, public
ownership could be extended to the vast majority of the economy without presenting any
problems.
Here's Krugman:
But I've been wondering, exactly how discredited is socialism, really? True, nobody now
imagines that what the world needs is the second coming of Gosplan. But have we really
established that markets are the best way to do everything? Should everything be done by the
private sector? I don't think so. In fact, there are some areas, like education, where the
public sector clearly does better in most cases, and others, like health care, in which the
case for private enterprise is very weak. Add such sectors up, and they're quite big.
He goes on to argue that the education, health care, and social assistance sectors, which
employ around one-third of US workers, are often better run by the government. He also
briefly dabbles in the idea that certain natural monopolies like utilities are also better
run publicly. But that's the limit of Krugman's imagination on these things. He concludes
that "by and large, other areas like retail trade or manufacturing don't seem suitable for
public ownership."
Why Not Own It All?
When Krugman says the retail and manufacturing sectors are not suitable for public
ownership, I think he is suffering from a lack of imagination about how such public ownership
could be structured.
Public ownership generally comes in three forms:
1. General government (GG) services like education, health care, and social
assistance.
2. State-owned enterprises (SOEs) like utilities, transit systems, and the post
office.
3. Social wealth funds (SWFs) like the Alaska Permanent Fund that are able to own
basically anything.
Krugman only considers GG and SOEs in his piece. Thus, since he thinks retail and
manufacturing are not suitable as GG or SOEs, he concludes that they should not be done
publicly. But retail, manufacturing, and basically anything else not suitable for GG and SOEs
are suitable for SWFs.
The state can very competently own retail and manufacturing companies by simply buying up
their stock and acting like an institutional investor. For instance, a social wealth fund
created by the federal government could gradually buy up stock in Amazon and Walmart to get
into retail and buy up stock in US Steel and General Motors to get into manufacturing. The
latter is not even a hypothetical because the government did recently buy up almost all of
the GM stock during the financial crisis, though it subsequently sold off its stake.
The genius of modern finance has been to create corporate ownership arrangements that
allow basically anyone, including the government, to own shares of any company in any sector
while being as involved (or uninvolved) as they want to be in steering the company. A federal
social wealth fund, like the one we advocate, should be able to take advantage of modern
shareholding institutions to expand public ownership into every aspect of the US economy.
Neoliberalism glory days are firmly in the past: the social pendulum now
starts moving in the opposite direction and will hit neoliberal square in the head:
deregulation and privatization are no longer fashionable ideas. Nationalization and regulation
of financial industry are.
Neoliberalism will continue to exist in its bloodthirsty zombie state for a while
(especially in the USA, the citadel of neoliberalism with the largest army of bought economists
-- high priests of this cult), but I think 40-50 years is max. With "cheap oil" depletion it
might be much sooner.
The quote
"Hence the policy advice of neoliberalism as a counsel of despair: get the state's nose out
of the economy as much as possible. When the state is neither an instrument of positive
redistribution nor an instrument of growth-boosting investment, its interventions in the
economy are likely to go strongly awry. And to the extent that a reduction in the economic role
of an elite-controlled state can be required as a price for rapid incorporation of an area into
the global economy, such a reduction should be required."
is either idiotism, or neoliberal propaganda, or both.
Like Trotskyism, Neoliberalism is statism par excellence: it comes to power via the "quiet
coup" and then uses the state to enforce and protect markets. Can be called neo-Trotskyism (it
rehashes the idea of Permanent Revolution and many other things) or "Trotskyism for the
rich." Reply
Why can't Krugman, an economist, clearly explain the destruction of the nation by neoliberals
destruction of economic theory, turning benefits into liabilities, and liabilities into
benefit, but only asymetricaly???
Hard core neoliberals cleverly attacked Adam Smith and Keynes so stealthily that even
Krugman rejects Adamm Smith and Keynes, and embraces free lunch economics.
No progressive today would support FDR or his advisors, including Eccles, who was much
smarter than anyone running the Fed since about 1970.
Hard core neoliberals want no money paid to workers, but they demand government ensure
consumers have lots of money to spend, far mote money than they earn. But, Hard core
neoliberals do not want government giving consumers money to spend to generate high profits
for Hard core neoliberals, but want the government to enable cHard core neoliberals get the
free money to rent to consumers, and then government punish consumers for not being able to
pay debt because they are not paid to work, because paying workers costs Hard core
neoliberals too much.
Just read a editorial from the anti government control of economy Heritage demanding a
branch of government, the Fed, control the economy, ie print more money, so businesses don't
have to pay consumers to buy stuff, ie, pay higher wages.
Free lunch economics is a total failure, yet hard core neoliberals argue its working
great, except [real] liberals keep pointing out its clear and obvious failures.
But hard core neoliberals should be thankful Krugman is not a liberal, but a free lunch
progressive in near total agreement with free lunch Hard core neoliberals.
In 1906 the great statistician Francis Galton observed a competition to guess the weight of
an ox at a country fair. Eight hundred people entered. Galton, being the kind of man he was,
ran statistical tests on the numbers. He discovered that the average guess was extremely close
to the weight of the ox. This story was told by James Surowiecki, in his entertaining book The
Wisdom of Crowds. 2
Not many people know the events that followed. A few years later, the scales seemed to
become less and less reliable. Repairs would be expensive, but the fair organiser had a
brilliant idea. Since attendees were so good at guessing the weight of an ox, it was
unnecessary' to repair the scales. The organiser would simply ask everyone to guess the weight,
and take the average of their estimates.
A new problem emerged, however. Once weight-guessing competitions became the rage, some
participants tried to cheat. They even tried to get privileged information from the farmer who
had bred the ox. But there was fear that, if some people had an edge, others would be reluctant
to enter the weight-guessing competition. With few entrants, you could not rely on the wisdom
of crowds. The process of weight discovery would be damaged.
So strict regulatory rules were introduced. The farmer was asked to prepare three monthly
bulletins on the development of his ox. These bulletins were posted on the door of the market
for everyone to read. If the farmer gave his friends any other information about the beast,
that information was also to be posted on the market door. And anyone who entered the
competition who had knowledge about the ox that was not available to the world at large would
be expelled from the market. In this way the integrity of the weight-guessing process would be
maintained.
Professional analysts scrutinised the contents of these regulatory' announcements and
advised their clients on their implications. They' wined and dined farmers; but once the
farmers were required to be careful about the information they' disclosed, these lunches became
less useful. Some smarter analysts realised that understanding the nutrition and health of the
ox wasn't that useful anyway. Since the ox was no longer being weighed -- what mattered was the
guesses of the bystanders -- the key' to success lav not in correctly assessing the weight of
the ox but in correctly' assessing what others would guess. Or what other people would guess
others would guess. And so on.
Some people -- such as old Farmer Buffett -- claimed that the results of this process were
more and more divorced from the realities of ox rearing. But he was ignored. True, Farmer
Buffett's beasts did appear healthy and well fed, and his finances ever more prosperous; but he
was a countryman who didn't really understand how markets work.
International bodies were established to define the rules for assessing the weight of the
ox. There were two competing standards -- generally accepted ox-weighing principles, and
international ox-weighing standards. But both agreed on one fundamental principle, which
followed from the need to eliminate the role of subjective assessment by any individual. The
weight of the ox was officially defined as the average of everyone's guesses.
One difficulty was that sometimes there were few, or even no, guesses of the weight of the
ox. But that problem was soon overcome. Mathematicians from the University of Chicago developed
models from which it was possible to estimate what, if there had actually been many guesses as
to the weight of the ox, the average of these guesses would have been. No knowledge of animal
husbandry was required, only a powerful computer.
By' this time, there was a large industry of professional weight-guessers, organisers of
weight-guessing competitions and advisers helping people to refine their guesses. Some people
suggested that it might be cheaper to repair the scales, but they' were derided: why go back to
relying on the judgement of a single auctioneer when you could benefit from the aggregated
wisdom of so many clever people?
And then the ox died. Amid all this activity', no one had remembered to feed it.
The Last but not LeastTechnology is dominated by
two types of people: those who understand what they do not manage and those who manage what they do not understand ~Archibald Putt.
Ph.D
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A beautiful public performance today by the Paris Opera's striking ballet dancers & orchestra. France's strike vs. austerity is bringing art back into the streets.
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]
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Ethiopian Airlines' Boeing 737 MAX 8 Crash: Three Things to Know
An investigation has been launched after an Ethiopian Airlines Boeing 737 MAX 8 crashed shortly after takeoff on
Sunday, killing all on board. WSJ aerospace reporter Robert Wall discusses the possible focus of the investigation,
and more. Photo: Getty Images
Transportation Secretary Elaine Chao lists seven accomplishments during her administration, none of which deal with
air travel.
PHOTO:
JIM
LO SCALZO/EPA/SHUTTERSTOCK
Ask anyone what
neoliberalism means and they'll tell you it's an economic system that corresponds to a
particular economic philosophy. But any real-world economic system has a corresponding
political system to promote and sustain it. Milton Friedman, who has become known as the father
of neoliberal thinking, claims in his text Capitalism and Freedom that "the role of the
government is t o do something that the market cannot do for itself, namely, to determine,
arbitrate, and enforce the rules of the game."* While neoliberalism's advocates like to claim
that the political system that corresponds to their economic preference is a democratic,
minimal state, in practice, the neoliberal state has demonstrated quite the opposite
tendency.
